Lie has once again been put to Mayor Bloomberg’s oft-repeated claim that he has cut spending in the city, a claim he repeated yesterday. “The controllable part of the city’s budget is down dramatically,” he said in the face of a study by the Manhattan Institute’s fiscal policy expert, E.J. McMahon, showing that the controllable part of the budget has risen by $47 million this fiscal year over last. The trick is that the mayor is counting his “cuts” against planned spending increases; by that count, the city is spending about $3 billion less than had been anticipated when the mayor took office. While such “cutting” may be admirable in its way, the fact is that the city is spending more in the controllable part of the budget this year than it was last year. This is certainly not the kind of standard that will lead us out of a fiscal crisis where we are facing down a $2 billion budget gap next year alone.

More dramatic than the increase in spending that the mayor and the City Council have direct control over, however, is the increase in the total city-funded spending that has occurred on Mr. Bloomberg’s watch. The city-funded portion of the budget has increased by $2.2 billion, or 7.3%, since the mayor took office. This, while the inflation rate for the period was less than 5%. The growth here can be attributed almost entirely to two items: the rising costs of pension fund contributions and debt service. Both of these are set to explode in the coming years. According to the mayor’s April executive budget, pension costs will grow to $3.4 billion in fiscal year 2005 from $2.7 billion in 2004; debt service is estimated to be going up about a quarter billion dollars between 2004 and 2005. It is on account of these costs that the mayor is projecting a budget gap of $2 billion for 2005 that he expects to grow to $3.3 billion by 2007 — all despite the fact that the city has enacted more than $3 billion in tax and fee increases since the start of 2002, according to Mr. McMahon.

But by labeling one part of the budget “controllable,” the mayor has gone a long way toward convincing the public that the rest of it is, by definition, uncontrollable. The mayor knows that’s not so, though. Yesterday, he pressed a plan to create a fifth tier to the city’s pension system, that would apply to new workers, that would be based on a defined contribution, not a defined benefit. With such a tier the city would not have to compensate workers for losses their pension funds suffer in the stock market. Such thinking is a good start, even though it will require asking Albany for approval. But so far the Bloomberg administration has spent most of its time when talking to Albany begging for more aid or higher taxes on city residents.

In the meantime, however, the mayor needs to start giving more serious consideration to the types of ideas this paper and others about town have been floating. Suggestions have included: privatizing garbage collection, selling public housing and other city-owned land, demanding a 40-hour workweek from municipal employees, bidding out bus service, reducing public campaign financing, streamlining procurement, and merging and eliminating departments. Simply saying that one segment of spending has been cut — especially when it has risen, albeit modestly — won’t move us any closer to closing the gap.