Somber Note on Budget Struck by Mayor
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A day after Mayor Bloomberg cast himself as a fiscally responsible leader and decried Washington’s “reckless” spending habits, he is calling for cuts to all city agencies.
The cuts in his $58.5 billion budget proposal would reduce the Department of Education’s budget by about $180 million this year and $324 million next year, and the plan calls for the police department to cut its budget by $33.8 million this year and $95.6 million next year. The cuts and new sources of revenue would yield $1.42 billion in savings. Overall, the budget proposal would increase spending by nearly 4%.
Mr. Bloomberg’s budget presentation at City Hall was a stark change from last year, when the city announced a record $3.9 billion surplus. Yesterday, facing a grim and uncertain economy, Mr. Bloomberg struck a more somber note.
“The next year will present challenges, but we have weathered these challenges before,” he said.
In a sign that the economic turmoil of the last week already is having an impact on his plans, Mr. Bloomberg sounded less optimistic than he had one week earlier during his State of the City address, when he spoke about a proposed extension to a 7% property tax cut.
The tax cut is in his budget, but he has said it depends on the health of the economy and assistance from the state and federal governments, and yesterday he added the cooperation of municipal workers to the list. He noted, however, that he couldn’t predict what would happen between now and the end of June, when the City Council votes on the budget.
“It is our anticipation to work as hard as we can to make sure we can extend the one-year property tax reduction to two years, but it is contingent on a lot of things that are really beyond our control,” he said. He later added: “I cannot look you in the eye and guarantee you.”
Mr. Bloomberg has been traveling across the country to speak out on the economy and the environment, and to call on the presidential candidates to be clear about how they will tackle tough problems, in what many political observers consider an effort to lay the groundwork for a presidential campaign.
If he ran, Mr. Bloomberg would be expected to trot out his record in the city as evidence he is an astute manager who can make tough calls, such as agency budget cuts, in the face of an economic downturn.
The city is projecting Wall Street profits will total $2.8 billion in 2007, significantly lower than the $16.8 billion in profits officials had forecast in June.
A senior fellow at the Manhattan Institute, Nicole Gelinas, who analyzed the budget, said she didn’t think it was the best example of fiscal responsibility.
“In a sense, we are still kind of running on fumes from the Wall Street boom. The only reason the budget is balanced is because we had a tremendous surplus from last year,” she said.
Mr. Bloomberg’s proposed budget is about $2 billion less than this year’s $60.4 billion budget, yet it would increase spending by 3.7% because the city rolled over about $3.8 billion in surplus funds to pay for next year’s expenses.
Governor Spitzer, in his budget speech earlier this week, called for the state to increase spending by 5%, a plan that met fierce criticism from state legislative leaders, businesses, and fiscal groups, among others.
The speaker of the City Council, Christine Quinn, said in a statement that Mr. Bloomberg’s plan “was both sobering and fiscally responsible.” Comptroller William Thompson Jr. called it “a testament to prudent fiscal planning.”
The chairman of the council’s Finance Committee, David Weprin, said he is “cautiously optimistic” the city will go through an economic storm relatively unscathed and without any major disruption in services, so long as tax revenues remain stable, Wall Street avoids any “more problems,” and the city steers clear of a recession.
Education advocates are pushing back against the cuts, with the president of the United Federation of Teachers, Randi Weingarten, saying the city should protect core educational services in schools.
The research director at the Citizens Budget Commission, Charles Brecher, said he didn’t think the cuts went far enough.
“The big message I would say is: ‘Don’t grow spending the way you are doing it in 2009, leaving us a hole in 2010,'” Mr. Brecher said yesterday. He said Mr. Bloomberg’s budget proposal is “less prudent” than those of past years, because he used much of the record surplus in the city’s coffers to plug next year’s budget gap.
The city faces a budget gap of $4.2 billion in fiscal year 2010, $5.6 billion in fiscal year 2011, and $5.3 billion in fiscal year 2012.
When asked if he would consider raising taxes on liquor and other products, as Mr. Spitzer proposed in his budget, Mr. Bloomberg said he didn’t think those smaller taxes raised enough money to make it worth weathering the public resistance, “and what’s more,” he added, “I think it sends the wrong message.”
“This administration is trying to hold the line and reduce taxes. At the same time it is trying to improve the quality of services and do more for more people,” he said.
Mr. Bloomberg’s budget does call for a 50-cent increase in the city’s cigarette tax.
To save money, city agencies are proposing a host of cuts and revenue generators, including a plan by the Parks Department to sell naming rights to buildings, such as recreation centers, to corporations.
The Police Department is reducing the number of police officers it budgets for by 1,000, because it hasn’t met its recruiting goals in recent years, and the Fire Department is expecting to pull in an extra $14.7 million in revenues next year by responding to more calls for Emergency Medical Services due to a decrease in private ambulance companies.
The Department of Sanitation is proposing to save by reducing cleaning and collection services, cutting 16 positions from its extra basket collection program, and ending its leaf collection program.