IBO's Mission To provide non-partisan budgetary, economic, and policy analysis for the residents of New York City and their elected officials and to increase New Yorkers' understanding of and participation in the budget process.

History of IBO - A Seven-Year Wait During the summer of 1989, the New York City Charter Revision Commission proposed changes in the City's governance, to be submitted to voters on Election Day 1989. Among the reforms proposed by the Charter Commission was the creation of an Independent Budget Office (IBO) that would provide Council members, borough presidents, community boards, and the public with expert budget analysis independent of that provided by the Mayor's Office of Management and Budget (OMB) and the Council's Finance Committee. The Charter Revision Commission believed that since knowledge is power, the IBO would put other elected officials on a more equal footing with the mayor and the Council's leaders. In order to ensure that IBO had adequate resources and could not be eliminated through defunding, the proposed Charter guaranteed IBO a budget not less than 10 percent of the budget of OMB. Voters approved the proposed changes to the City Charter in November 1989, paving the way for the establishment of IBO. From 1990 to 1995, however, successive mayoral administrations and the City Council did not approve funding to allow for the actual start of the office. Several elected officials and community organizations sued in court to compel the City to fund and establish IBO. As a result of two lawsuits, in the fall of 1995, the City agreed to create the IBO and approve partial-year funding for the office in fiscal year 1996. On February 20, 1996, Douglas Criscitello began work as IBO's director and first employee. He was chosen through a process specified in the Charter. Candidates were screened by a ten-person Advisory Board (appointed by the Comptroller and Public Advocate) whose broad membership includes private citizens with expertise in economics, finance, and public administration. Final selection of the director was made by an appointment committee consisting of the Public Advocate, the Comptroller, the Speaker of the City Council (representing the Council), and the Bronx Borough President (chosen to represent the five Borough Presidents). In the first few months of operation, IBO had only a few employees and was forced to contend with small and temporary space at 2 Lafayette Street. By July 1996, however, the agency had secured rental space at 110 William Street designed for the full complement of about 35 IBO employees. An open house was held in October 1996 at IBO's new offices to introduce as many members of the interested public as possible to the agency's staff and work plans and to strengthen its relationship with a broad cross-section of potential clients.

What does IBO do? IBO provides professional, non-partisan analysis of New York City's budget and economy. As directed by the City Charter, the Independent Budget Office is mandated to publish three reports concerning New York City's budget. In addition, IBO is also responsible for a wide array of work products ranging from informal responses to official queries about the budget to comprehensive economic and fiscal analysis of major issues confronting the City. The publications listed below encompass IBO's work products from its first year of operation.

Mandated Reports The Independent Budget Office: Enhancing Official and Public Understanding of the Budget May 1996 (40 pages) The first report issued by IBO provides an historical perspective on New York City's budget, a timetable of the New York City budget process, and the sources of revenues and expenditures projected in the 1997 executive budget. New York City's Fiscal Outlook February 1997 (58 pages) This report highlights IBO's independently produced economic and City revenue forecasts and projections of City expenditures given current service levels for the five years (1997-2001) covered by the City's financial plan. IBO is the only entity in City government, other than the Office of the Mayor, that is required to issue a revenue projection. Additional chapters in the report analyze issues concerning the long-term levels of revenue and spending in the City including the structure of City taxes (particularly the real property tax), federal welfare reform, and school enrollment. Fiscal Outlook set out a new concept for New York City municipal budgeting by establishing a current services projection of revenues and expenditures. This policy-neutral baseline provides a meaningful starting point for analysis of the City's fiscal condition as the annual budget process gets underway. Analysis of the Mayor's Budgetary Proposals March 1997 (40 pages) This analysis examines features of the Mayor's Preliminary Budget for 1998 and extended IBO's earlier projections of City revenue and spending. To complement its revenue forecast contained in Fiscal Outlook, IBO estimated the fiscal impact of the proposals contained in the Mayor's tax reduction program. Whereas the expenditure projections of February were based on a "current services" assumption, expenditure projections in this report took into account projected changes in services due to Mayoral initiatives and gap closing measures. The report concludes with an analysis of those spending areas where there are significant differences between IBO and the Mayor's Office of Management and Budget projections-welfare, Medicaid, education, overtime in uniformed services, judgment and claims, labor costs, the Health and Hospitals Corporation, and the Administration for Children's Services. Analysis of the Mayor's 1998 Executive Budget May 1997 (58 pages) This report features re-estimates of City revenue and spending for the financial plan period given the revised budgetary proposals contained in the executive budget and adjustments in the national and local economic outlook. The expense budget is examined on an agency-by-agency basis and the inquiry of major budgetary issues is expanded to include new topics such as the Mayor's assumptions of state legislative actions.

Fiscal Briefs The Clean Water/Clean Air Bond Act of 1996: Fiscal Impact on New York City October 1996 (8 pages) This brief studies the Clean Water/Clean Air Bond Act, its potential benefits to New York City, and its fiscal impact on New York State. The Act, which was subsequently approved statewide by voters in November 1996, authorizes the state to sell $1.75 billion in long-term general obligation bonds in order to make long-term improvements to its environmental infrastructure and natural resources. Uses of bond funding include projects to improve water quality, water supply systems, air quality, solid waste management, and initiatives to remediate municipally-owned land contaminated with hazardous substances. School Tax Relief and Education Aid Proposals: Impacts on New York City April 1997 (12 pages) This analysis reviews three state proposals to reduce local property taxes used for education funding and to increase state aid for education. The proposals had been offered by the Governor, the Senate, and the Assembly. IBO's study shows that the property tax relief proposed by both the Governor and the Senate would significantly short-change the City, yielding City residents less than 9 percent of the statewide benefits. The study also finds that it is unlikely that any of the proposals would eliminate the current disparity between the City's share of state education aid and its share of statewide enrollment. Would Clothing Sales Tax Cuts Pay for Themselves? June 1997 (12 pages) This brief examines the direct and indirect fiscal impacts of the Mayor's proposal to eliminate the sales tax on clothing items selling for less than $500. The study concludes that while there may be other reasons to reduce the burden of the sales tax, the proposed tax cut would not pay for itself. At best, there would be only a modest increase in economic output and employment attributable to such a tax cut. The indirect fiscal benefits to the City of such increased activity would be insufficient to make up for the foregone direct sales tax revenue. Reductions in the City's Hotel Occupancy Tax Rate: The Impact on Revenues July 1997 (12 pages) This brief is an economic study of recent reductions of the hotel occupancy tax and the resulting effects on tax revenues and economic activity. The study finds that as much as 51 percent of the revenue loss from the tax cut could be offset by revenues from increased economic activity resulting from the tax cut.

Other Reports The Fiscal Impact of the New Federal Welfare Law on New York City October 1996 (40 pages plus 9-page summary) This study analyzes the main provisions of the new federal welfare law, focusing on their likely impact on the City's budget. Given the uncertainties of future welfare caseloads, the analysis looks at possible costs and savings to the City under a variety of economic and policy scenarios. IBO Analysis of Board of Education Funding Trends January 1997 (4 pages) This analysis examines funding trends at the Board of Education. IBO found that, in constant dollar terms, total spending through 1996 had fluctuated for a number of years. On a per pupil spending basis, the trend was more definitively downward. For 1997, total and per pupil spending was budgeted to surpass recent levels. Private and Public Funding for New York City Parks, 1987-1996 May 1997 (3 pages) This study looks at private and City spending on New York City parks from 1987 to 1996. The IBO found that City spending has fallen over that time period, more than offsetting the substantial increase in private spending over the same time period. In addition, the study reports that funding reductions have been greater in the City's smaller parks than in many of its major parks (Central Park, Prospect Park, etc.), where private spending has been concentrated. All IBO publications are available by contacting IBO at (212) 442-0632 or at this web site.

Public OutreachThe primary role of IBO's public outreach efforts is to provide public information on budget and policy issues facing New York City. Our objective is to open up the City's budget process and to make it more accessible and understandable to both elected officials and the public. In our first year, public outreach has taken on many forms including: liaison work with elected officials, community boards, civic and neighborhood associations, the media, and other organizations; creation of IBO's web site; a newsfax (Inside the Budget); a "Tax Receipt" service; a "Budget Hotline"; and presentations to various community groups. The following summarizes IBO's major public education activities over this past year.

Inside the Budget How can anyone keep track of the myriad issues facing the City budget? More importantly, who has time to read all the reports, papers, studies and news stories on City budget issues? The IBO has created a bi-weekly newsfax, Inside the Budget to provide our readers with brief articles (usually 300-400 words) on various issues about the City's budget. The newsfax highlights important fiscal issues facing the City, summarizes IBO publications, lists reports released by other agencies and/or organizations, and announces schedules for preliminary and executive budget hearings. It also provides coverage of the preliminary budget hearings to enable people to keep up with the developments at agency hearings.

No Taxation Without Explanation Where do your tax dollars go? In order to answer this question, our "Tax Receipt" service provides an itemized listing of how much an individual taxpayer pays-in actual dollars and cents-for specific federal, New York State, and New York City services (eighty in all). The service provides an easy, effective way of getting this information into the hands of taxpayers and provides an opportunity for taxpayers to access this information 24 hours a day, seven days a week.

Information Anytime In February 1997, IBO launched its web site (www.ibo.nyc.ny.us). The site contains a directory providing the names and telephone numbers of all IBO staff. When New Yorkers have a question on a City budget matter, they can either visit our web site or call the relevant IBO staff member directly for an answer. Along with our directory and Tax Receipt service, the web site also contains: All IBO publications to date All editions of the newsfax, Inside the Budget Site links that connect visitors to local elected officials and organizations that deal with New York City budget issues Brief biographies on all IBO staff Job opportunities at IBO A section to send us comments

Budget Hotline By April 26th every year, the Mayor releases an executive budget. This represents the final opportunity for elected officials and the public to debate the proposed City budget for the upcoming fiscal year. In many cases, it is difficult to find out information on particular programs. Our "Budget Hotline" gives callers an opportunity to obtain budget information needed on service delivery and funding levels for various City programs and agencies. Through the Hotline, callers have the opportunity to talk to IBO staff who can help them decipher the voluminous budget documents issued each year.

Elected Officials and the Public During the year, IBO responded to 30 formal requests for detailed analysis and reports from City Council members and other public officials, not-for-profit organizations, individuals, and community boards. Scores of informal inquiries were handled via telephone conversation, meetings, or written responses. In addition, public testimony was presented to legislative bodies in New York City and Albany as noted below. New York State Assembly Standing Committees on Ways and Means, Social Services, and Children and Families, "Implementation of the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 in New York State," January 23, 1997. New York State Senate Standing Committee on Finance and New York State Assembly Standing Committee on Ways and Means, "New York State Economic and Revenue Consensus Forecasting Conference," March 5, 1997. New York City Council Committee on Finance, "The Mayor's Preliminary Budget for 1998 and Financial Plan through 2001," March 19, 1997. New York City Council Committee on Finance, "The Fiscal Year 1998 Executive Budget," May 30, 1997. New York City Council Task Force on Technology in Government, "Preparing the City's Computer Systems for the Year 2000," June 6, 1997.

Media Coverage The opening of the Independent Budget Office after several years of litigation and the agency's initial work during its first year of existence received significant coverage in the media. IBO was the subject of, or mentioned in over one hundred stories in the print and electronic media. In addition, IBO staff frequently responded to technical inquiries from journalists covering City budget and policy issues. The media plays an important role in helping IBO fulfill its mandate to enhance official and public understanding of the budget. IBO's work was covered in the five major daily newspapers (New York Times, New York Post, Daily News, Newsday, Staten Island Advance); major weekly publications (Crain's New York Business, New York Observer, Village Voice); financial newspapers (Bond Buyer, Fixed Income Daily); wire services (Reuters, Associated Press, Dow Jones News Service); and, several weekly ethnic and neighborhood papers. IBO staff were interviewed many times for television and radio news broadcasts. We also sat for more in-depth interviews on Cityscape on WFUV, New York Close-Up on New York 1 News, New York Beat on WNYC, and Money Works on WBIS-TV. Some IBO work also received specialized coverage. Our study on clothing sales tax cuts was covered in depth in Women's Wear Daily, and IBO's analysis of school tax relief proposals was covered in the Legislative Gazette in Albany. Another major piece appeared in the New York City Partnership's journal Home Economics. It featured IBO's perspectives on the School Tax Relief (STaR) proposal in contrast to the Governor's views. Finally, IBO's interactive Tax Receipt service received national attention in Governing and Kiplinger's Personal Finance magazines.

Public Presentations As part of our Charter mandate to inform the public about municipal finances, IBO staff made presentations to the following groups during its first year.

American Jewish Congress • Association of Black Charities • Bank Street College • Bronx Borough Board • Bronx Community Board 10 • Bronx Mental Retardation and Developmental Disabilities Residential Committee • Brooklyn Borough Board • Center for Women in Government, State University of New York at Albany • City Project • City University Graduate Center • Columbia University, School of International and Public Affairs • Flushing YMCA • Human Services Council • LaGuardia Community College • Manhattan Borough Board • Manhattan Community Board 6 • Manhattan Solid Waste Advisory Board • Mitchell-Lama Council • New York City Partnership and Chamber of Commerce • New York State Network for Economic Research of The Nelson Rockefeller Institute of Government, State University of New York at Albany • Northern Manhattan Collaborates • Northern Manhattan Improvement Association • Northwest Bronx Community and Clergy Coalition • Organization of Waterfront Neighborhoods • Parks Council • Public Works Forum • Queens Borough Board • Queens Community Board 4 • Queens Community Board 9 • Staten Island Borough Board • Vassar College • Washington Irving High School • Women's City Club • Woodrow Wilson School of Public Policy, Princeton University • Young Public Policy Committee, UJA-Federation of Jewish Philanthropies

Reactions to IBO's Work While reaction to our work has been overwhelmingly positive, our efforts have occasionally been met with mixed reviews.
	On our October 1996 report entitled The Fiscal Impact of the New Federal Welfare Law on New York City: "...city and state officials have spent months analyzing [the new welfare law]. Now they have the insights of the new agency, which has just reached this conclusion: 'The Act's impact on the New York City budget will ultimately depend on the decisions of state and city officials, the performance of the local economy and the behavior of thousands of individuals is response to the new system.' ...In other words, they don't have a clue." Daily News, editorial, November 1, 1996. "The conscientious work of the budget office proves the value of expert, nonpartisan analysis for policy makers reviewing complex options." The New York Times, editorial, November 4, 1996.	On our June 1997 report entitled Would Clothing Sales Tax Reductions Pay for Themselves?: "Giuliani called the report 'dead wrong' and dismissed the budget agency as 'a useless office' that issues 'second-rate' economic reports." Daily News, June 27, 1997. "The [study] is a thoroughly professional analysis of the topic. The methods are the right ones; little is done that is based on subjective judgment; and all of the relevant considerations are taken into account. ...it is an excellent example of good economic reasoning and quantification, and deserves to be received as the most reliable study we are likely to see." Professor Dick Netzer, New York University.	On IBO generally: "There is no reason for an Independent Budget Office. And, they put out silly reports like this because offices that have no reason for their existence put out silly reports to get attention." Mayor Giuliani on WABC's "Live from City Hall" June 27, 1997. "The IBO has been doing a fine job in monitoring the budget process, crunching its own numbers to arrive at revenue estimates and informing the public." Citizens Union, Searchlight on the City Council, June 1997.

Access to Information The City Charter authorizes IBO to "secure such information, data, estimates, and statistics from the agencies of the city as the director determines to be necessary for the performance of the functions and duties of the office, and such agencies shall provide such information, to the extent that it is available, in a timely fashion." This provision is the most powerful authority provided to IBO. Shortly after IBO was established, however, a memorandum was sent to City agency heads requiring them to direct all IBO inquiries to the Mayor's Office of Management and Budget (OMB) "to develop a coordinated response to these requests." Rather than ignoring the memorandum-which would have required IBO to find particularly courageous agency staff willing to speak with us-we decided to work within the constraints imposed by the memo and to channel our requests for information through OMB.
	IBO has been and continues to be willing to work within the constraints imposed by the memo only to the extent it facilitates our ability to perform our Charter-mandated duties. Over the next year, we plan to expand the scope of our work to include programmatic budget analysis, linking budget and related non-financial data, so that we can show the public how well the City spends its money. Such an approach will require City agencies to provide much more information to IBO than was furnished over the past year. Given the fact that getting data from agencies has sometimes been an arduous and lengthy process, we have a long way to go before we feel comfortable that the administration's existing "coordinated response" process supports IBO in discharging its Charter-mandated responsibilities.

Finances
IBO Operating Budget for Fiscal Year 1997
Authorized Funding	$2,536,466
Uses of Funding
Salaries	1,705,230
Office Furniture and Equipment	190,990
Rent	157,170
Computer Automation and Supplies	66,761
Office Supplies	15,350
Advertising	3,375
Travel (local and inter-city)	7,607
Printing	16,942
Professional Services	73,420
Temporary Services	6,231
Postage	12,548
Telecommunications	26,902
Utilities	4,593
Books and Subscriptions	39,586
Equipment Rentals	12,986
All Other	15,449
Total Spending	$2,355,140
Ending Surplus*	$181,326
* Adjustments are made after the end of the fiscal year that reduce the surplus by a modest amount.

IBO Staff during Fiscal Year 1997
Office of the Director Budget Projections General Counsel Intergovernmental Affairs IBO Administration Public Outreach	Douglas Criscitello Herbert Block Elizabeth Boghossian Paul Greaves Richard Greene Kevin Koshar Terri Matthews Timothy Mulligan Frank Posillico Indera Segobind Amy Bachrach* David Roberts*
Budget Analysis Division Health and Social Services Expenditure Analysis Housing, Education, and Infrastructure Expenditure Analysis Uniformed Services Expenditure Analysis	C. Spencer Nelms Jr. Ian Brown Jonathan Cortell Eric Dixon Jenell Horton Deanice Jenkins Patrick M. Killackey Elizabeth Lynam Paul Lopatto Ritta McLaughlin Bernard O'Brien Martha Prinz Sofia Quintero Joyce Sun Deborah Ahrens* Sarah Monroe* Nancy Penksa*
Economic Analysis Division Forecasts of the City economy and tax revenues Impacts of changes in tax policy	Ronnie Lowenstein David Belkin Michael P. Jacobs Luan Lubuele Stephen Mark Beth Moodie George V. Sweeting
* Former staff members

Advisory Board, Consultants, and Interns during Fiscal Year 1997
Advisory Board	Frank Mauro, Chair Jack Krauskopf, Vice Chair John Burton* John Eatwell Dall Forsyth* Ronald Gault* David Gordon* Stanley Hill Ray Horton Sidney Lirtzman Carol O'Cleireacain Margarita Rosa * term expired
Graduate Student Interns	Sarah Coyle Jessica Greene Jeff Meli Will Morrow Ryan Poscablo Charles Swartz Georgia Wallen
Consultants	Howard Chernick Frank Fioramonti David Johnson
High School Interns	Anthony Jackson Christine Martinez Juan Marchany

Special Thanks IBO Annual Report Committee Herbert Block Paul Greaves Kevin Koshar Ritta McLaughlin Ryan Poscablo IBO would like to thank and acknowledge the Public Advocate's Office, Office of Payroll Administration, the Department of Citywide Administrative Services and the Comptroller's Office for their support and assistance during our first year. Annual Report Design: Don Battershall, Susan Shaw

Independent Budget Office
110 William Street, 14th Floor
New York, New York 10038
Phone # (212) 442-0632
Fax # (212) 442-0350

Email Address: ibo@ibo.nyc.ny.us

Douglas A. Criscitello, Director