At yesterday’s meeting of the Financial Control Board, where the reminder of the state’s ability to take over the city’s finances hangs over the conversation, Mayor Bloomberg moved — just a month after the budget passed — to take baby steps toward fiscal responsibility, instituting what he billed as nearly across-the-board 7.5% cuts to city agencies. He estimated this move would slice $1 billion from the next fiscal year’s projected $5 billion gap. The savings were deemed a safeguard in the event that some of the budget’s riskier assumptions can’t be relied upon. Many of these assumptions are beyond the city’s control, and have been separately estimated by State Comptroller H. Carl McCall, City Comptroller William Thompson, and the Financial Control Board on which they both sit, to be more than $1 billion.

On top of this positive, if limited, effort to cut into the city’s spending, which came a day after the mayor suggested a subway and bus fare hike was imminent, Mr. Bloomberg all but announced that taxes would go up next year, saying, “You cannot just look at expense cuts.” Considering that the city’s ability to borrow will be seriously curtailed next year, and that the city has $42 billion in outstanding debt, as compared with $25 billion for the state of California, a plan this limited suggests Mr. Bloomberg is far more likely to raise taxes than to do much to lower expenses. Diana Fortuna, president of the Citizens Budget Commission, estimated that this year’s budget as passed will reduce headcount by only about 2,000 jobs, and that the real productivity savings in next year’s budget add up to a little less than $100 million — or less than 2% of what is needed.

At the table with the mayor, Mr. Thompson, Mr. McCall, and Governor Pataki — as City Council Speaker Gifford Miller’s invited guest — was United Federation of Teachers President Randi Weingarten. Ms. Weingarten read a statement on Mr. Miller’s behalf, calling for a restoration of the commuter tax and arguing against any reduction in the budget for public schools, cultural institutions, or social services. It seems that it takes more than a looming deficit and a reminder of the city’s very limited and conditional control over its own finances to get municipal unions and their elected representatives on the Council to join in even the most limited conversation about fiscal discipline. That will require reduced municipal employment — especially in social services, where an increase in the city’s quality of life and a reduction of the welfare rolls (that is, a smaller client base to serve) seem to have had no effect on employment levels. “The 7.5% is fine,” Ms. Fortuna said, “But it should be more, it doesn’t get you all the way. I’d like to see them really trying in earnest — and maybe they are, behind closed doors, trying to save major money.… but they’ve got a long way to go.”