According to assistant general manager Shulie Wollman, flip tax income for March and April was $901,500, falling 15% off the budget’s forecasts. With only two months left in the current budget cycle, the coop is likely to fall 23% short of budgeted income, for a $1.3 million deficit.
The shortfall is not because real estate is tanking. Our expected flip tax revenue of $4.4 million would be comparable to income from two years ago, and better than any year prior to 2013. The problem is that the board budgeted for way more income than could be reasonably expected, inflating revenue forecasts in order to mask a looming budget deficit.
This isn’t just obvious in hindsight. We pointed out these inflated forecasts in November when the budget was released, and predicted the current deficit. Board members Lee Berman and Peter Herb voted against the budget specifically because it failed to reflect the coop’s fiscal situation honestly.
Now that the election is over, Gary Altman and other board members have changed their tune, admitting that their pre-election forecasts were way off base, and raising maintenance to compensate. This year’s maintenance increase, however, can’t pay for last year’s deficit, and the board has yet to explain away the red ink in our 2015-16 ledgers.
* The flip tax numbers I’m citing come from Mr. Wollman in the management office, compared with the board’s published budget from the fall. However, Gary Altman’s recent memo announcing maintenance increases says that the coop’s flip tax shortfall is already $1.5 million. I can’t explain the discrepancy in our figures.