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New York City’s Adopted Budget Plan for FY 2005 was roundly praised for restoring most of the Mayor’s proposed cuts, and providing a tax rebate for homeowners. But the city may face trouble in subsequent years, warn two government watchdogs. The Financial Control Board’s recent staff report on the city’s FY 2005-08 Financial Plan found that the city’s estimated budget gaps — $3.7 billion in FY 2006, $4.5 billion in FY 2007, and $3.7 billion in FY 2008 — could ultimately be much higher because the city didn’t consider certain factors, such as the expiration of many labor contracts. The board urged the city to increase revenues or cut expenses this year to help balance the budget in the future. Meanwhile, City Project, a policy research group, also issued a report warning that social services advocates will have to battle again next year because this year’s restoration of cuts isn’t accompanied by any revenue generating changes. [07/19/04]

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