OMB Director Solomon: FY27 budget technical details and reserves
Solomon covers the balanced FY26-27 budget, the $7.1 billion FY28 gap in line with historical averages, replenished reserves at $2 billion for Rainy Day and $5.2 billion for Retiree Health Benefit Trust, and a revenue forecast revised up $75 million in FY26.
Now I'd like to share technical details about the fiscal year 2027 executive budget.
Fiscal years 26 and 27 remain balanced.
The fiscal year 2028 gap is at $7.1 billion, which is in line with historical averages.
The gaps in fiscal years 2029 and 2030 of $9.1 billion and $9.8 billion, respectively, are lower than during the Great Recession years, the percentage of gaps over revenue.
We will continue to identify structural solutions and make long-term systemic changes to improve the city's long-term fiscal outlook and reduce out-year gaps.
Our administration is committed to rebuilding and maintaining high levels of reserves to ensure that we can weather an economic table.
We replenished the Rainy Day Fund to $2 billion and the Retiree Health Benefit Trust Fund to $5.2 billion.
As a percentage of revenues, our reserves are approximately 8%, higher than the pre-COVID 10-year average of 7.3%.
Turning now to our revenue forecast, we recognize headwinds, including the ongoing war in the Middle East and a subdued labor market, but also economic
strengths, including continued market momentum, financial and artificial intelligence investment, and elevated commercial leasing activity that is driving down vacancies.
The result is that before accounting for changes in savings and tax programs, the tax revenue forecast in the executive budget
has been revised up by $75 million in fiscal year 2026 and is unchanged in fiscal year 2027 as compared with the preliminary budget.
And we incorporated the council's proposal to reduce the unincorporated business tax credit, which will generate $68 million annually also as of fiscal year 2027.