NYC spending may spike sharply in a few years: report

NEW YORK (Reuters) - New York City's spending could increase sharply over the next few years, opening much bigger budget gaps than the mayor has forecast, the city's comptroller said in a report on Monday.

While Comptroller William Thompson said New York City was "well positioned" to cope with declines in the economy and the housing market, he identified four major risks that could require hundreds of millions of dollars more in spending.

Among those risks, he said that although Mayor Michael Bloomberg expects to save $200 million a year by overhauling health insurance, starting next year, he has yet to present a plan.

In addition, overtime costs likely will top Bloomberg's projections by $100 million this year and pension costs will spiral from $83 million next year to $225 million in 2012, he said.

Changes in accounting standards will block the city from selling debt to pay for projects that no longer can be treated as capital expenditures, adding an extra $500 million a year of spending, he said.

(Editing by Leslie Adler)