It looks like Mayor Bloomberg is being a bit more forthcoming with regard to the budget crisis. In a radio interview earlier this month, he warned that “If you don’t balance the budget, you get a control panel that comes in … Last time it happened was in 1975. They fired 20% of the police, 20% of the Fire Department, 20% of the teachers, closed three hospitals. We can’t let that happen again.” In all, the city laid off about 70,000 employees back then, but that may be less than will be needed today to keep the Financial Control Board at bay, particularly given the city’s dependency on a slumping Wall Street. The hiring freeze the mayor announced this week is but a first step.

Unfortunately, instead of the serious cuts the city must have to survive when the market tanks, most of the talk has been about which taxes should be raised. Liberals have protested that we cut taxes too much during the Giuliani years, and that we need to restore, for example, the commuter tax, which many see as free money. But the tax cuts of the Giuliani years did little more than undo the damage done by the tax hikes under Mayor Dinkins.

The idea that any cuts to spending would hit bone is outlandish. Consider the Department of Welfare, which has as many employees as it did in 1980, despite a halving of the state’s welfare rolls. The Department of Museums budget of $230 million is larger than that of the National Endowment for the Arts. The city’s overall budget is the nation’s third largest, trailing only those of New York State and the State of California. Our workforce, as the mayor has noted, is one-seventh the size of the federal government.

As for the so-called sacred cows of city government — police, fire, sanitation, and pedagogues — in the early 1970s, they accounted for about half of the city’s budget compared to 21% today, which speaks to the expansion of government since the last fiscal crisis. The police force presently operates under a contract which allows many officers to work only 200 days a year. If this were changed, the city would be able to cut the size of the force without cutting police service. Demand for fire service — i.e. the number of fires — went down dramatically during the Giuliani years, largely thanks to Howard Safir’s efforts as fire commissioner to reduce the number of preventable fires. Mr. Bloomberg needs to take advantage of this reduction by closing underutilized firehouses. Anyone who thinks there are not savings to be won from the $12 billion behemoth that is the Department of Education must work for Sheldon Silver.

The mayor might contractually oblige city employees to pay co-payments on their healthcare, which would bring them into line with the private sector and save the city $500 million a year. The state’s Medicaid program is larger than those of California and Texas combined, and unlike in those (and most other) states, in New York State municipalities are on the hook for a quarter of the program’s cost, burdening the city almost $4 billion annually. Yet hospitals, City Council members, and George Pataki in his quest for votes, push to expand the program on the premise that for every dollar the city pays, the state and federal government pay a bit under three. Time spent debating which taxes to hike would be better spent discussing what jobs and services to remove.