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New York’s booming real estate market gives city $3.9 billion surplus |
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Written by Administrator
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Saturday, 27 January 2007 |
Mayor Michael R. Bloomberg of New York City projected yesterday that the city would have a $3.9 billion surplus which will be carried over into its $57.1 billion budget next fiscal year.
In a news conference at the City Hall, the mayor said this surplus could allow him to cut taxes and set aside money for future expenses. Adding to the good news was yesterday’s forecast of $2 billion tax revenues for the current fiscal year which was higher than was predicted 2 months ago.
The positive predictions was a reversal of the rumored downturn in local economy and that of Mayor Bloomberg’s first 2 years in office where he raised taxes and cut spending to combat the city’s fiscal crisis since the 70’s.
Also during the conference, the mayor acknowledged the large surpluses as the result of a boom in property transfer taxes and mortgage recording taxes which account for $2.9 billion in taxes this year, as against the $902 million in the fiscal year Mr. Bloomberg took office.
Mr. Bloomberg announced a one-year cut in property taxes amounting to $750 million, another tax cuts for $250 million. He also said that out of next year’s budget, $1.4 billion will be set aside to reduce future deficits and $500 million toward a trust fund for the health benefits of city retirees. The trust fund was created last year and already has a $2 billion into the fund.
New York’s population is about 8.2 million. Wages have increased every year since 2002. Wall Street bonuses was $25.1 billion last year, hence the increased tax receipts. Its tourism is booming as seen in low vacancy rates in hotel rooms. Commercial rents went up due to more demand for commercial and office buildings.
Nevertheless, the mayor sees a declining home sales until 2009 and weakening job growth this year, while Wall Street next year.
The mayor cautioned about the long term threat to the city’s fiscal health which is the increasing cost of pensions, health care for city employees and retirees, the Medicaid insurance program for the poor and interest on municipal debt.
. “The fact remains that we still spend more than we take in,” the mayor said. “We have to some day grow our way out of that problem.”
The mayor was urged by fiscal conservatives to rein in the budget on public-sector unions. The United Federation of Teachers and District Council 37 of the American Federation State, Country and Municipal Employees have reached contract agreements with the mayor, contracts of which are rising 7 percent this fiscal year, to $18.9 billion from $17.7 billion.
As an annual requisite, the mayor presented a preliminary 10=year capital plan during the conference. The $77.3 billion plan covers the 2008 to 2017 fiscal years. Building or school renovation accounts for more than one-third, or $28.4 billion. The plan includes $52 million for retaining fragile walls around the city, $44 million for overhaul of the New York Aquarium at Coney Island and $40 million for electronic voting machines.
"The people of New York City have every reason to be happy,” the mayor said, before quickly adding, “The ways to be happy long term, however, is to not go out and spend everything you have on one night of food and a few drinks.”
Ma. Roma C. Agsalud |
