AGENCY TESTIMONY
Fiscal outlook, economic projections, and tax revenue forecasts
1:37:36
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129 sec
The IBO presents its fiscal outlook, economic projections, and tax revenue forecasts for New York City. They project continued but slower growth and discuss potential constraints on the city's economy.
- IBO estimates city tax revenue will grow by an annual average of 3%, reaching $85.2 billion in 2028
- The economic forecast suggests a 'soft landing' where inflation approaches the Federal Reserve's target without causing a recession
- IBO projects the city will add over 91,000 jobs in 2024, with growth moderating in future years
- Key sectors driving job growth include leisure and hospitality, professional services, health care, and human services
- The city's economy may become constrained by the size of the labor force
- IBO's findings suggest potential budget savings that could enable a balanced budget without compromising critical city services
Louisa Chafee
1:37:36
IVO strongly recommends the council consider pressing the administration to produce more accurate fiscal estimates, especially for long standing and well understood programs and costs.
1:37:50
Let's talk about the fiscal outlook in the economy.
1:37:53
As expected sorry.
1:37:59
As expected, the administration's tax forecast for 2024 and 25 have increased substantially over the course of the past three financial plans to meet the levels that IBO has consistently projected all year.
1:38:13
IBO estimates that the city tax revenue will grow by an annual average of 3%, growing from $73,600,000,000 in 24 to $85,200,000,000 in 2028.
1:38:26
This growth is expected to be driven by property, personal income, and business income taxes.
1:38:32
IBO's tax revenue forecast is based on an economic forecast marked by continued but slower growth.
1:38:39
IBO's May 2024 forecast projects that the economy is still on the path for soft landing where inflation approaches the Federal Reserve's target level without causing a recession, although on a more delayed time frame than previously expected.
1:38:55
However, despite a generally positive macroeconomic outlook, the city's economy is at risk of becoming constrained by the size of the labor force.
1:39:04
IBO forecasts the city will add over 91,000 jobs in 24 before gradually moderating in future years as the labor market tightens.
1:39:14
Job gains in the leisure and hospitality, professional services, health care, and human service sectors will continue to spur the local economy.
1:39:23
So in sum, IBO's findings indicate that there are areas where budget savings may enable the council to achieve a balanced budget without fundamentally compromising critical city services.
1:39:36
We're happy to answer any questions and provide further details as needed, And thank you for the opportunity to testify today.
Justin Brannan
1:39:44
Thank you very much.
