Budget Forcasting

1

Government Overview Summary

Government Overview Summary

A Comprehensive Annual Financial Report (CAFR) is a set of financial statements for a state, municipality, or other governmental entity that comply with the Governmental Accounting Standards Board (2020). The CAFR is required to be audited, utilizing recognized government standards. The complete CAFR consists of an introductory, a financial, and a statistical section. The introductory section provides a breakdown of important information and acts as a guide for the auditor. Next, the financial section provides basic fiscal statements, including additional information provided to the auditor and the auditors’ assessment. Finally, the statistical section discloses any fiscal and/or statistical information, including current trends designed to educate the reader.

New York City Population

New York City, while often referred to as simple as New York, is considered the most densely populated area within the United States. Approximately 20 million people currently live in New York City’s metropolitan area and approximately 23 million in the surrounding area. By definition, New York City is considered a megacity with vast influence seemingly perpetuated throughout the world. New York City is the cultural, financial, and media capital of the world, significantly influencing commerce, entertainment, research, technology, education, politics, tourism, art, fashion, and sports (Ganti, 2020).

Major Industries

New York is often considered the economic capital of the world because it has the most influential market in the country since companies all around the nation and the world have established their headquarters or major center’s of operations in the city. New York is home to many large office complexes and facilities employing millions of workers with most of them being employees by companies working under the top 5 industries the city has.

Finance is the largest industry in New York, undoubtedly making New York the finance capital of the world. Their finance industry generates over one trillion dollars in value every year, most of which comes from NASDAQ stock market, New York Exchange, and the banking industries. Three of the most valuable banks in the United States, Bank of New York Mellon, Bank of America Merrill Lynch, and Bank of United States, are based in New York (Vestal, 2018).

Trade is the second largest industry in New York. Numerous foreign companies such as Germany’s Deutsche Bank, Japan’s Mizuho Bank, and China’s Bank of China, all have offices in the city and stakes measuring in the hundreds of billions (Vestal, 2018). Everyone interested in international business finds their way to New York searching for the opportunity to be employed by one of their high-end trade companies.

Health care is another major industry in New York and almost a third of all hospitals in New York are located in New York City with over half a million city residents being employed in the healthcare industry. There are over 60,000 physicians and approximately 130 Nobel Laureates in the medical institutions putting New York second to Boston in medical institutions receiving a very generous amount of funding from the National Institutes of Health (Vestal, 2018).

Unsurprisingly, New York’s real estate consists of some of the most expensive square-foot pricing in the world with a large portion of the real estate market being dedicated to high-end price brackets (Vestal, 2018). Their property valuation reaches over one trillion dollars making real estate one of the top industries in New York.

Mass media takes fifth place on the list of top industries in New York. Some of the best television, radio, and online publications such as HBO, Bloomberg LP, and NBC are all based in the city. New York City is considered to be a media capital as 7% of TV watching households are located there, making it a source of talent and a business (Vestal, 2018).

Budget Calendar

Like any other state, the council of the city of New York has budget calendars for each fiscal year. Researching New York’s FY20 Executive Expense, Revenue, and Capital Budget report, it contains revenues, capital budget, financial plan, personal income tax, other taxes, expenditures, Citywide savings program, Fiscal 2020-2029 Executive Ten-Year Capital Strategy, Fiscal 2020 Executive Capital Budget and Commitment Plan, and Financing and Debt Services. The report briefly mentions that the Council evaluated New York’s resource levels, funding gaps, and operational deficiencies and efficiencies and saw risks in their financial plan and had budget shortfalls. It resulted in addressing small fractions of the proposals from the administration and it concluded to finance its proposals through a combination of additional revenues and budget reductions that would cover the cost of both budget gaps and council priorities while maintaining a balanced budget. The budget plan resulted in an increase in PIT revenue, miscellaneous revenues, and citywide savings revenue which impacted around $340 million in new resources identified for FY20. It states, “The $1.9 billion in increases are offset by $712 millions in citywide savings program expense actions, and a $250 million take down of the General Reserve, bringing the City to $958 million in net new expenses” (McKinney, 2019). There were more revenues identified in FY19 which resulted in carrying over $347 million into FY20, balancing both years. With the help of the citywide savings program and the Ten-Year Capital Strategy will help to maintain a balanced budget and ways to propose their funding for the next year.

In looking at the Governmental Accounting Standards Board, it is clear that there is a set criteria that businesses must follow on the different levels of municipality. The Comprehensive Annual Financial Report's sections are to be audited to ensure that they meet the standards of the Governmental Accounting Standards Board from the introductory, statistical, and financial portions. There is also the exploration of New York City and how it is known to be one of the largest trading cities in the world with its multitude of financial entities. This example shows the areas that have been examined by the government and how there can be solutions to improve the profitability of the city by altering the budget plan to ensure further success and to cover any losses within the fiscal year.

References

Stringer, S. (n.d.). Retrieved October 15, 2020, from https://comptroller.nyc.gov/reports/comprehensive-annual-financial-reports/

Finance FAQ. (2020). Retrieved October 17, 2020, from https://www.boynton-beach.org/budget-and-finance/finance-faq

Ganti, A. (2020, August 29). Metropolitan Statistical Area (MSA) Definition. Retrieved October 15, 2020, from https://www.investopedia.com/terms/m/msa.asp

Vestal, M. (2018). WHAT ARE THE TOP INDUSTRIES IN NEW YORK CITY?. https://www.saravalindustries.com/top-industries-in-new-york-city/

Latonia R. McKinney. (2019). The Council of the City of New York. Report of the Finance Division on the Fiscal 2020 Executive Budget. FY20-Expense-Revenue-and-Capital-report.pdf. Retrieved October 19, 2020 at https://council.nyc.gov/budget/wp-content/uploads/sites/54/2019/06/FY20-Expense-Revenue-and-Capital-Report.pdf.