"Everybody is going to have to tighten their belts," he told agency heads at City Hall. "No organization the size of New York City operates as efficiently as it could - if we try harder, we can all find these kinds of savings."
The billionaire, who founded the financial information company Bloomberg LP, has long warned that multibillion-dollar deficits lurked around the corner, and last fall began ordering city agencies to make cuts.
The plan he outlined on Thursday showed nearly $1.5 billion in savings from those moves this year and next.
Among the cost-saving programs to both reduce expenses and raise revenues is a planned reduction in the overall targeted number of police officers, down 1,000 to a total of 36,800, and a proposal to sell naming rights to corporations at major city-owned sites in parks around town.
The police reduction does not mean that the force will shrink; the city has not been able to meet its previous goal of 37,800 officers in recent years.
The education department - which Bloomberg has largely shielded from major spending cuts in past years - also had to pitch in with $180 million in reductions for the current fiscal year and $324 million in fiscal year 2009. The department has responsibility for the city's 1.1 million-pupil public school system.
Small programs - like funding for a sanitation department effort to empty public waste cans more often on weekends - will also be trimmed.
The mayor portrayed the spending reductions as "efficiencies" rather than the elimination of services or programs entirely.
Overall, controllable spending in the slimmed-down budget proposal went up just 1 percent from this fiscal year, a leaner figure that reflects the tough times. For the current fiscal year, spending went up by nearly 8 percent from the previous period.
In his last budget plan, when the city was flush with cash, Bloomberg included some $700 million for new initiatives like a citywide bike network and bulletproof vests for auxiliary police officers.
He also has been setting aside money each year for a trust to help pay for health care benefits for the city's retirees. The fund, which now has $2.5 billion, will not be funded additionally this year.
Bloomberg noted that windfalls from real estate transactions, Wall Street profits and surging tax revenues that helped create a record surplus for fiscal 2008 have largely disappeared, and the national economy is slowing.
Record losses on Wall Street last year are particularly significant for the city economy, which depends heavily on the financial services industry. Last June, the city had projected $16.8 billion in profits for the 2007 calendar year; on Thursday, Bloomberg said that number now stands at just $2.8 billion.
In 2006, when Wall Street surged in the last quarter of the year, the city's profits from Wall Street were $20.9 billion, twice what they were the previous year.
Despite the grim news in the city, Bloomberg said the city was on stable enough ground to continue a 7 percent property tax cut for a second year.
Keeping the tax cut in the budget plan, he warned, will depend on the economic situation in coming months - a caveat that gives him an additional $1 billion should the economy take a turn for the worse.
He also said New Yorkers shouldn't be disheartened by news of pared-down city services and a sluggish national economy.
"Enjoy life, don't sit there and hunker down and try to live in a tent - there's no reason you shouldn't enjoy yourself," he said. Still, he added, it is important to be cautious and "save for a rainy day."
The budget plan, which will go through negotiations with the City Council, must be adopted before the next fiscal year begins July 1.
