After the election comes the deluge. At least that’s the way it looks as word comes out that Mayor Bloomberg is eyeing a tax hike once the political coast is clear. In Saturday’s New York Post, David Seifman reported that the mayor has approached various legislative officials about raising taxes to help close the city’s $5 billion budget deficit in the 2004 fiscal year. The plan seems to be to wait for Governor Pataki to be reelected and then go to Albany to get bailed out. This was not in itself surprising. The day after the budget was passed we predicted that we would soon begin to hear about the “necessity” of new taxes. Still, it’s hard to think of a worse time for New York City to consider increasing taxes. As the city attempts to get back on its feet and keep businesses in town, tax cuts and reductions in the size of the city’s government are a more likely path to success.

It’s not as if the mayor would have a hard time finding places to cut. New York City employs more than 300,000 people and has 42 city agencies, 12 boards and authorities, and 22 mayoral offices. The city government’s headcount is about 1/7 the size of the federal government’s civilian workforce. One out of every thousand Americans is a New York City government employee. Our J.P. Avlon advanced on this page last week the suggestion that a great place to start cutting would be the newly created Department of Education. While the specter of “cutting from education” might be politically thorny for Mr. Bloomberg, he proved his dedication to improving our schools by wresting control and responsibility for them from Albany. New York’s education department has inherited 24,000 middle managers and administrative and support staff from the old Board of Education. Compare that to the city’s Catholic school system, which, as Mr. Avlon points out, has a central administrative staff of 25.

Mr. Bloomberg deserves credit for so far standing strong against efforts by Democrats on the city council to raise taxes. He fell short on the cigarette tax, charging smokers approximately $10 million a month so far for the privilege of buying smokes in the city, despite what tax avoidance has taken place. He also has raised the city’s levy on cell phones. And parking fines — or taxes, as some like to think of them — will almost double tomorrow. Now the talk is turning to reinstating the commuter tax, using an income tax surcharge, or possibly raising the property tax. The commuter tax is the most arrogant route, since, in picking on the hapless commuters, it is taxation without representation. Mr. Bloomberg is counting on Mr. Pataki’s largesse, as the governor is accountable to the suburban voters hit by the levy. An income tax surcharge is a possibility, but less politically appealing to the mayor since it hits all of his voters. If Mr. Bloomberg doesn’t get the commuter tax from Mr. Pataki — or is faced with a Governor McCall not enthusiastic to take a political hit on taxes on a Republican mayor’s behalf — he’ll be stuck with attacking homeowners or others who have property. For the property tax is a levy the city can raise without Albany’s okay.

Raising the property tax would hurt the city’s real estate market just at the time it is trying to get on its feet. Furthermore, it would penalize homeowners and the middle class, who make up the economic backbone of the city. Certainly, the situation is dire. In this year’s budget, the city borrowed to cover operating costs — the equivalent of taking out a loan to buy groceries — something it hadn’t done since the fiscal crisis of the 1970s. In the meantime, the mayor has moved cautiously when it comes to the steps necessary to getting the city’s house in order, perhaps waiting to cash in his chips until after the gubernatorial election. He has not threatened layoffs, done much in the way of creating efficiency gains, or addressed Medicaid rolls that now exceed 2 million in the city alone. Those rolls are at an all time high, and unlike in most every other state, the city foots 25% of that bill. The city is running out of time to bring in supply-side measures to revive its economy and get out of the way of the deluge.