Mayor Asking for Another $1.5 Billion in Budget Cuts

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The New York Sun

Bracing for steep declines in revenues and an economy hamstrung by upheaval on Wall Street, Mayor Bloomberg is ordering city agencies to come up with another $1.5 billion in budget cuts.

If the City Council approves the plan, no city agency would be spared from the budget ax: Each would have to cut 2.5% from its budget this year and an additional 5% next year.

To comply with the directive, the Department of Education would need to cut more than $580 million and the Police Department more than $286 million over two years.

The city’s budget director, Mark Page, wrote in a letter to agency heads yesterday that the cuts are being sought as “the institutional and market changes in the finance sector are likely to reduce employment and taxable revenue from this sector well into the future.”

To combat dwindling revenues from Wall Street, Mr. Bloomberg seems to be adopting a two-pronged approach, calling for the budget cuts only a day after he said he is considering a midyear 7% property tax increase that would bring the city $1.2 billion a year if enacted.

Without taking into account the proposed cuts, the city has projected a budget gap of $2.3 billion next year, and gaps of $5.2 billion and $5.1 billion in the two following years.

The mayor’s proposed cuts to education, which would come on top of $180 million in cuts to public schools in February, came under fire almost immediately yesterday. Advocates said they hoped that the cuts would come from the Department of Education’s bureaucracy at Tweed Courthouse, and not from classrooms.

The president of the teachers union, Randi Weingarten, urged the city to protect children from the economic downturn and cautioned in a statement against repeating “the mistakes of the Seventies when the city cut education so deeply that it took our school system decades to recover.”

The city’s public advocate, Betsy Gotbaum, noted that there are 14 job openings posted on the department’s Web site, seven of which come with salaries that top $170,000.

“As schools face further budget cuts, the already bloated central administration at Tweed continues to spend money on itself that they could spend in the classroom,” Ms. Gotbaum said.

City agencies will have some leeway in determining where the money would come from. Agency heads were told yesterday that they must turn in a list of proposed cuts by October 8, with the ideas listed in order of preference.

If approved by the council, the cuts would be the latest in a series of budget reductions that Mr. Bloomberg has pushed through over the last year and a half, which have already resulted in reductions of $1.1 billion from last year’s budget, $1.3 billion from this year’s, and $1.2 billion from next year’s.

The new budget cuts would be included in the city’s first-quarter budget document, which the council could vote on as early as October.

Speaker Christine Quinn appeared to support the plan, saying yesterday in a statement that every commissioner at every city agency has an obligation to look for areas where they can do more with less. She added, however, that the city would not go back to the 1970s, when New York was on the verge of bankruptcy and there were drastic cuts in services.

As council members begin mulling the idea of additional budget cuts, they also are weighing the possibility of a midyear property tax increase. Several members of the council, which would need to approve any property tax hike, said they would fight the mayor on a property tax increase and urged him to look for other ways to raise money.

A council member of Queens who is chairman of the Public Safety Committee, Peter Vallone Jr., issued a statement yesterday denouncing the proposed cuts to the Police Department and said that before the reductions are even considered the city needs to press Albany to return a greater share of the tax dollars its residents send upstate and call for a reinstatement of the commuter tax.

Council Member Alan Gerson, who represents Lower Manhattan, said he is drafting a list of alternative revenue-generating schemes. He said he has not endorsed any of them, but said he thinks they should be explored.

One of his ideas is to have the city to reassess property values of buildings that lease space on their façades for advertisements. If a building owner makes money by leasing out space on the exterior for advertisements, then the value of their property should go up, he said, increasing the amount of money paid to the city in property taxes.

Another council member, Lewis Fidler, has called for the city to raise its hotel tax before it touches the property tax rate.

Council Member Vincent Gentile of Queens said he has concerns about the budget cuts, and is questioning the mayor’s motivation for trying to push them through.

“That’s a concern, that we are cutting to the bone, so that on the rebound we look great and the mayor’s legacy is intact as a financial genius,” he said. “I’m not sure we need to go along with that unless it is absolutely necessary.”

The New York Sun

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