1. 1 The Most Important Economic And Fiscal Decisions Facing The Next Mayor A Citizens Budget Commission Conference December 6, 2013

2. New York City Budget Briefing 2 The Most Important Economic and Fiscal Decisions Facing the Next Mayor A Citizens Budget Commission Conference December 6, 2013

3. Composition of NYC Revenues Fiscal Year 2014 3 $76.5 Billion

4. 4 $76.5 Billion Composition of NYC Expenditures Fiscal Year 2014

5. Economic and Revenue Growth is Projected to be Slower than in Pre-Recession Years Average Annual Growth Economic Indicators2002-20082008-20142014-2017 Personal Income6.1%2.4%4.3% Wage Rate5.1%0.4%2.7% Revenue Indicators2002-20082008-20142014-2018 Tax Revenues (Net of Changes)9.4%1.6%3.9% Tax Revenues (Budget)9.8%2.8%4.0% 5

6. Expenditure Growth Driven by Debt Service and Fringe Benefits DEBT SERVICE Largest annual growth: 8.3% $1.6 billion increase FRINGE BENEFITS (w/o pensions) Steady annual growth of 5.8% $1.6 billion increase Rising health premiums TOTAL BUDGET: 1.5% annual growth 6

7. Growing Debt Service Driven By Capital Spending

8. Debt Burden Is High According to Metrics Used by Rating Agencies Debt Outstanding, FY2013Debt Service, FY2013 8 Note: Does not include debt of the New York City Municipal Water Finance Authority.

9. High Health Insurance Spending Due to Generous Premium-Sharing Policies 9 Employee Health Insurance – Over 90% enrolled in 2 plans: GHI & HIP – City pays 100% of the premium cost for GHI & HIP for employees, spouses and families Retiree Health Insurance – 10 years to vest; begins upon retirement w/o regard to age – City pays 100% of the premium cost for retirees and dependents – City reimburses the full cost of Medicare Part B for retirees over age 65 and their spouses CBC report finds NYC premium-sharing policies are generous relative to other US cities, New York State, the federal government and private sector

10. FY2015 Budget is Balanced with Transitory Resources 10

11. Future Budget Gaps Appear Manageable; Greatest Risk from Expired Labor Contracts 11

12. HHC and NYCHA Will Also Impact City Budget Health and Hospitals Corp. HHC projects large gaps in FY2014 and beyond Cost containment measures have yet to be identified Counting on additional $500 million in Medicaid and Medicare starting in FY2014 NYC Housing Authority Gap-closing initiatives face community opposition Estimated operating deficit of $192 million in FY14 City allocated $71 million to keep senior and community centers open NYCHA must fill remaining $121 million gap 12 Source: Office of the State Comptroller