City Budget Deal Slashes Tax on Clothing Purchases

Mayor Bloomberg and the speaker of the City Council, Gifford Miller, reached a compromise budget deal last night that eliminates the city sales tax for low-cost clothing purchases, provides homeowners with another $400 property-tax rebate, and preserves spending for meat-and-potatoes programs.After months of wrangling and political sparring, the two men agreed to maintain last year’s spending levels for libraries, day care, parks, and other social-service programs, and use the city’s surplus to finance a batch of new programs.Shortly after 10 p.m., Mr. Bloomberg and Mr. Miller, who is vying for the Democratic Party nomination to run for mayor, announced the agreement and posed for a well-choreographed hand shake in the rotunda of City Hall.“The speaker and I may be vying for the same office – that is politics – but when it comes to government, I have said every time I’ve been asked, Gifford Miller has been a great speaker of the City Council, and together each year, after all of the pushing and shoving, we always come together, have a handshake, and both of us try to do what is right for this city,” Mr. Bloomberg said at the late-evening announcement.In addition to new spending for after school programs and job training, the budget for the coming fiscal year, which starts Friday, also sets aside funds to increase police officers’ salaries, which as of yesterday was required, and for comparable raises that the administration expects to negotiate with other uniformed workers.It also includes a new cap on the amount city homeowners and renters pay when their property values go up.The details of how the cap was structured are complex, but it will limit the share of property-tax assessment increases for residential property to 2% from the current 5% and shift the burden to commercial property – which will be unpopular in the business community.As expected, the $50.2 billion budget also lifts the city’s 4% sales tax on clothing and footwear costing less than $110 and approves a $400 property-tax rebate for homeowners. Shoppers will still have to pay the 4.365% state sales tax, but the city portion will be eliminated on September 1.For most of yesterday, council members hopped between meetings to decide how to shave their original financing wish lists, and lobbyists lingered around City Hall waiting for anyone with a say in the budget to walk by.Despite the surplus of more than $3 billion for the year, negotiating the budget was tricky because the two leaders at City Hall are political archrivals and are only months away from an election.“Every year we’ve had our differences about what we thought were the right priorities and every year we find a way to work them through,” Mr. Miller said. “Every line in this budget we affect New Yorkers’ lives every day.”The administration restored funds for many programs the council was lobbying for, which could leave Mr. Miller with less political ammunition against the mayor in the next few months. Mr. Miller, who has repeatedly cast the mayor as out of touch, will, however, undoubtedly make the case that he fought the administration to prevent deep cuts.How the 51 council members evaluate Mr. Miller’s ability to deliver a strong budget will probably become clear in the coming days, once the deal is finalized and the speaker, who is prevented by term limits from seeking re-election, no longer has leverage in the council.It was unclear last night whether the members who endorsed the speaker’s political campaign and stood with him in other political battles, including a recent showdown with the mayor about how to overhaul the city’s system for getting rid of garbage, fared any better in getting money for their districts.Other than the sales tax and the cap on increased property-tax bills, both of which needed approval from Albany but have been ratified by the Legislature, the final budget negotiations tinker at the edges.Recent wrangling between the Bloomberg administration and the council centered on the small fraction of the $50 billion that would be added for individual programs that individual council members want the city to finance.Last night, the two sides apparently agreed to add $230 million – more than the administration wanted but less than the council wanted. That includes $20 million for a job-training program the council proposed, and additional money for domestic-violence education, new after-school activities, and other initiatives.Experts said the budget fails to address future deficits. A spokesman for the Independent Budget Office, Douglas Turetsky, said yesterday, as he has before, that the budget does not address a $4.5 billion budget gap that looms for the 2007 fiscal year.Last night, Rep. Anthony Weiner of Queens, one of the other Democrats vying to replace Mr. Bloomberg, called the budget “irresponsible” for that reason and said it was the result of a “failure of leadership.”“The problem with this budget isn’t that it’s a Republican budget or a Democratic budget, but that it’s an irresponsible budget,” Mr. Weiner said in a statement. “We have an obligation to pay our debts, even in election years. This budget doesn’t do that.”The council’s finance director, Larian Angelo, said: “All that’s good and all that’s bad in the budget has to be attributed to both sides, because both sides agreed.”The council is expected to rubberstamp the final budget today or tomorrow, well before the July 1 deadline.

City Budget Deal Slashes Tax on Clothing Purchases

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