Revenue Declines in Rough Economy

From a broad and long-term perspective, New Rochelle’s economy is sound. We have comparatively high wealth and employment levels, we have not experienced widespread destabilizing foreclosures, and our fiscal management has been excellent. For these reasons and others, New Rochelle will weather the current economic storm, and emerge poised for future progress.

Read Finance Commissioner Rattner’s Mid-Year Budget Memo.

In the short-term, however, like almost all other cities, we face very difficult fiscal challenges. According to newly-released mid-year data, our revenues are likely to fall roughly $3 million short of budget projections. Sales taxes have been particularly hard-hit and account for about two-thirds of the projected shortfall. These revenue losses are only partially off-set by savings in local government expenditures achieved through a hiring freeze and other efficiency measures.

As reported in the local media, the City Manager has suggested that contractual salary increases for municipal employees be deferred for two years. This single step would greatly relieve our budgetary pressure, although the City will almost certainly need to consider other options, as well.

The City Administration and Council will begin budget deliberations for 2010 in mid-November, and it is premature to speculate about the precise choices available to us. Nonetheless, it is important that the public be aware of our circumstances now, so that we can confront this challenge together, as a community.

You can read Finance Commissioner Howard Rattner’s mid-year budget memo HERE.