Illustration of How “Surplus Roll” and Retiree Health Benefits Trust Used to Balance Budget. Click to advance. The City is using a $ 2.8 billion surplus from FY2013 to balance the FY2014 budget, along with $1 billion from the trust fund.
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Illustration of How “Surplus Roll” and Retiree Health Benefits Trust Used to Balance Budget
Click to advance
The City is using a $2.8 billion surplus from FY2013 to balance the FY2014 budget, along with $1 billion from the trust fund.
$1 billion was deposited into the trust from the 2006 surplus….
…a trust fund was created to accumulate resources to deal with the City’s huge OPEB liability.
In 2006, the surplus was so large…
…and the rest was used to balance the 2007 budget.
The City does not have a rainy day fund, and must balance its budget at the end of every fiscal year. As a result, when it has a budget surplus, it “rolls” the money into next year, typically by prepaying expenses. For example, in 2005, it had a surplus of $3.5 billion, which it rolled into 2006…
…to balance the 2006 budget.
…was used to balance the 2008 budget.
Of the 2007 surplus another $1.5 billion….
…was deposited into the trust fund, and the remainder…
…but the money did gain interest and grow to $3.2 billion.
Beginning 2010, the City began to withdraw money from the trust fund for general budget relief, using it to balance the budget along with the smaller surpluses.
No additional deposits were made to the trust…
The trust fund is now depleted.