Chair Lee questions Comptroller on FY28 gap variance and forecasting differences

And then before I hand it off, I know the speaker wanted to be here but could not come back, and so I just wanted to ask a few questions on her behalf.

Of course.

Okay, so the FY28 gap in your budget analysis of the preliminary budget would be $13.9 billion, assuming that the property tax increase did not happen, which thankfully it didn't.

So now the updated executive analysis shows a gap of $8.8 billion in FY28.

That's a $5 billion change, a large change even if you account for the pension amortization savings of about $1.6 billion in that year.

So how did your outlook change, the delta change so much?

And then with such large variances in the forecast, how can we be sure that it doesn't change so drastically?

And what measures are you taking to sort of look at that?

Okay, very good question.

Very important question.

You know, Madam Chair, forecasting turns out to be a little challenging because it's hard to predict the future.

Yes.

But we had no choice but to do our best.

And we came out with a forecast of about, I think, just under $88 billion.

Excuse me, just over $88 billion in...

Give me the exact number, please.

What's our total tax revenue forecast for next year?

88.

vis-a-vis

27, yeah, 27, sorry.

Right, so we have $87.8 billion as revenue for the coming year.

That is a little lower than the mayor's projection, so we're just a tad bit more cautious.

Now, there are other fiscal monitors that also have given assessments, including the Independent Budget Office, which is about another half billion below us.

There is the state comptroller, which I think was right about where the mayor was.

And then there is the financial control board, which is about where we were.

So we're clustered within about a billion of each other.

The mayor in the group is the most optimistic.

Council came out with this forecast today, which I'm excited to review.

I think you all are about a billion and a half above the mayor's projection.

Any of us could be right.

I hope the highest possible projection is right.

It really depends on what you think will happen on Wall Street.

That is kind of the core assumption.

I mentioned that Wall Street had its best year on record, the most profitable year on record, the biggest bonus season on record.

And what we assumed is that next year Wall Street has a good year, but a little bit off the top.

That's how we played it.

It's possible that we break the record again, and I hope we do.

But as you heard in my testimony, I see some reasons to be cautious out there.

I will also add that while we really commend the mayor for ending this era of drastic under-budgeting of major expense lines that we knew we were going to incur,

we still have a difference of opinion on a few budget lines.

They're nowhere near as drastic as prior years.

But if you consider both, we're slightly less optimistic on the revenue and that we have some slightly higher numbers on the expenses.

We go up from, I think the mayor had it at about $7.1 billion for the fiscal year 28 out year gap.

We have it at about $8.8 billion.

That explains why we are just a little more concerned about the scale of the gap.

Got it.

Okay.