Wednesday, December 24, 2014
The City's Economic Recovery Continues With Projected Surpluses.
In my last post I wrote about how the "City pattern" that the UFT and the City agreed to was "ugly". From the members it was short on money, screwed various groups (people who resigned and ATRs etc) and too much of the retroactive raises were deferred out to 2020). For the education reformers and conservative think tanks and their media allies it was a "giveaway" that will eventually bankrupt the City. Now we find that the just released Independent Budget Office (IBO) report has revised their projections to show existing and future surpluses rather than deficits for this and the next three fiscal years.
According to the just released IBO report the City has a $744 million dollar surplus this fiscal year and projected surpluses of $634 million dollars for the 2017 and 2018 fiscal years when previously the City had claimed a one billion dollar deficit. While next year's budget still shows a $184 million dollar deficit, the very conservative projections the IBO uses and the continued economic recovery will not only wipe out the deficit but will result in large surpluses for next year and the years ahead, barring a worldwide economic collapse. Furthermore, the economic improvements associated with lower oil prices has not been factored in and if the global economy does pick up as expected, this will result in even greater surpluses in the next few years. Finally, this does not account for the pension windfall that the City will receive as the New York City pension funds will exceed the 7% return for this year and add billions to its coffers. In the last two years the NYC pension funds returned 12.3% and 17.4% respectively, meaning they received billions of extra money to use for their budget requirements or put into a "rainy day fund" that are usually not included in the IBO projections..
Did our union sell out cheap? Yes they did but that's water under the bridge and its time to look forward and convince the De Blasio administration to truly improve the schools by reducing class sizes, eliminate the unfair "fair student funding" that forces principals to hire the "cheapest and not the best teachers" for their students. and making sure properly certified teachers are leading students in their subject area.