Chair Lee questions Comptroller on conservative revenue growth assumptions

And then I think your tax forecast assumes that revenue growth will fall from a 5.5% growth rate this year for FY26 to just 2.2% in FY28, which is around the rate of inflation, if not below.

So what leads you to believe that tax revenue growth will slow down so much, and are you projecting a recession?

We are not projecting a recession.

Okay.

I think we are assuming a more typical year in tax growth.

Again, we are not assuming a repeat of the record profits on Wall Street in the past year.

Again, that could be achieved, but if the AI bubble bursts, there'll be an impact.

If the impact of the war and oil prices and higher interest rates are felt in the city, it could also lead to a slowdown.

And I think most economists do put the chance of a recession in 2027 at about 35%.

Some that I trust would probably say closer to 40%.

So for all those reasons, we were a little more cautious.

But I will ask our deputy comptroller if he'd like to weigh in on the growth versus inflation question.

Well, I don't know what the council estimates in terms of inflation going forward.

We see that historically after years of steep growth, then tax revenues tend to moderate, right?

Overall, our growth rate is 3.3% over the entire forecast horizon.

So, you know, there can be fluctuations year to year, but essentially we are on a slightly less optimistic growth trajectory as the council, which is 4.3%.

And, yeah, so as to the gap, I mean, it was $3.7 billion, the property tax, and then there is $1.7 billion from the re-amortization, so that total is about $5.5 billion, which is about how our 2028

gap sort of swings.

So most of it is explained by those two.

Okay.

And just, sorry, your last question.