Betraying both the promises of his own campaign and the vows he was making before the election just ended, Mayor Bloomberg has managed to present the people of New York with a crisis budget that increases both taxes and spending. With both businesses and individuals wondering whether they want to stay in town in the wake of September 11, he is proposing not only an enormous increase in property taxes but a staggering escalation of the tax on those who are still willing to schlepp into the city to work here. He is refusing to confront a bloated municipal workforce to which he has been giving generous raises. And he is doing this at a time when the state and federal budgets are in the midst of their own crises, so that Albany will have less room to maneuver than in the past. Talk about your perfect storm.

Our sense is that people are starting to wonder whether the kind of competence that enabled Mr. Bloomberg to build his fortune in the private sector can be translated to public leadership. “This is a man,” Fred Siegel told us, “who came in and in his inaugural speech acknowledged the fiscal pickle the city was in and the untenable size of its workforce but then waited almost 11 months to freeze hiring.” Here is a man who talked gamely of his opposition to taxes almost right up until Election Day last week and then, the next week, drops on the public a plan that calls for tax escalation that, by any recent measure, is radical. Even now, with the city employing — as our J.P. Avlon points out in the adjacent columns — an astounding 3.7% of its population, the mayor wants to dodge cutbacks in the municipal workforce.

When people look back on this period, they are going to shake their heads in amazement. In his first year in office, Mr. Bloomberg papered over a $5 billion hole in the present fiscal year largely through one-shot borrowing to pay for operating expenses. He spent much of his political capital railing about cigarettes in small restaurants and bars. The city is now facing a $1.1 billion hole in this year’s budget and a projected $6.4 billion hole for the coming year. The combination of commuter taxes and real estate tax increases that the mayor is now asking for are what Mr. Siegel calls “an invitation to job flight” because they will make “both telecommuting and setting up branch offices in the suburbs all the more attractive.”

To make all of this politically palatable to the state legislature and the City Council, Mr. Bloomberg calls for reducing the city’s income tax from 3.65% to 2.7%, with an additional reduction to 2.25% after four years. But the phasing of these reductions combined with their crabbed nature actually amount to incentives to delay earning. The city is already hemorrhaging private sector jobs — 5,900 in October alone, according to the comptroller’s office. Yet the mayor’s plan seems contingent on some $2 billion “free money” from the commuter tax, as well as $600 million from unspecified efficiency gains from the city’s municipal unions, who promised $500 million in such gains this year, and delivered on hardly half of that. Nonetheless, the mayor plans to reduce the size of city employment rolls by only 8,000 jobs by 2004, and is continuing his all carrot, no stick approach to negotiations. By not talking about layoffs, he reduces the possibility of winning concessions from unions. He’s never used the Financial Control Board, which would have the power to abrogate contracts, as a stick.

“There’s no evidence that the city has a labor strategy or has been talking seriously with the unions about how to save money,” observes the president of the Citizens Budget Committee, Diana Fortuna. Of the mayor’s proposals, less than 25% of the gap would be closed with spending cuts. The rest is heavily contingent on state and federal aid that may not be forthcoming, as well as on Albany’s permission to reinstate and raise the commuter tax. Benjamin Smith quotes the mayor on page one of today’s New York Sun as saying: “It would be great if I could look everybody in the eye and say, ‘You can have the chicken in every pot, and nobody has to pay for it … That’s not the real world … everybody has to pay.” It wouldn’t be surprising if there were far fewer of those taxpayers and fewer of the businesses that support them in New York by the time Mr. Bloomberg leaves office.