Chair Lee questions Comptroller on conservative budgeting and upside risk
Lee asks why the Comptroller's outlook is more conservative than OMB's and about upside risk. Levine notes they're within 1% of OMB's projection, explains benefits of caution, and states the city is under more fiscal strain than any time in his 12 years in government despite a currently strong economy.
OMB has had a tradition of conservative budgeting, and based on your analysis, it appears that your office has a more conservative outlook on the city's budget.
Why is that, and how much upside risk is there that the budget gaps will not be as big as you say?
Well, you're talking about very large numbers, and so we are within less than 1% of OMB's projection.
As I said, we are about $500 million below on an 88%
billion dollar base and we have reasons to be cautious.
Either of us could be right.
There are benefits to being cautious though, right?
Because if the cautious estimate is wrong, then you end up with a little more cash at the end of the year that you can put to vital programs or put into the reserves.
If the more aggressive estimate is wrong,
Then at the end of the year, you're in a hole, and then you have to make very tough decisions.
So this is a balancing act, and we're doing our best to get it right.
Look, I'll just say that we're, as long as I've been in government, we've had a very strong economy.
I've been in government 12 years.
With the exception of COVID, where we had so much federal money come in that from a city budget perspective, we didn't really endure the pain.
And I think this year is different.
The economy today is strong.
I do believe that.
But we're under more fiscal strain than we have been at any time in my 12 years in government.
And I personally see more economic uncertainty on the horizon than at any time in recent memory.
So for all those reasons, we're landing on the slightly more cautious side.
No, I totally get it.
And I will say I've got to give a special shout-out to our finance team and our economists because I know that IBO, the mayor's office, your office, as well as the council, we have different sort of projections that we usually have.
But I'm proud.
To say that they've been pretty good, so it's great.
But hopefully we'll see what happens, obviously.
But please take a look at the report and let us know.
We'd love to have more conversations with you about that.
Okay, so I'm going to, I have more questions, but I'm passing it off to my colleagues so they can go.