Umbrella by the door

New York City is as dynamic as cities come, but we cannot assume we are insulated from a vast universe of potential financial challenges. Shocks like the impact of increasingly extreme climate and the economic effects of a creeping recession are somewhat foreseeable. Others, like the COVID pandemic, are less so. Supply chain disturbances, war in Ukraine, an ongoing tech stock crash and collapse of the cryptocurrency market and lingering questions over the extent of a return to offices paint an uncertain picture of the city’s financial fortunes.

What is certain is that one of the preeminent responsibilities of our leaders is to be prepared to weather these shocks without depriving New Yorkers of city services, and that non-property tax revenues expected to exceed projections by $3 billion make it possible now to set aside funds for just that.

Comptroller Brad Lander’s call for an additional $1.8 billion to be committed to the city’s Revenue Stabilization Fund — also known as the Rainy Day Fund — above the $700 million already included in Mayor Adams’ executive budget for fiscal year 2022 is certainly a significant ask, but the tax receipts make it eminently doable.

More important than the number is the formula used to arrive at it, which would tether deposits to growth in tax receipts. It is a basic tenet of individual financial responsibility to squirrel away some smart sum when times are reasonably good.

The current structure of the rainy day fund sets out no requirements or even guidelines for how much the city should set aside every year or how much it should aim to have in the fund, nor restrict the purposes for which funds can be taken out. The City Council should have the foresight to build in standards stringent enough to ensure that the kitty can only be tapped in emergencies while loose enough to give the city the ability to move nimbly when these do come.