New York City has budget agreement

June 26, 2008 6:39:28 PM PDT
New York City Mayor Michael Bloomberg and the City Council reached a budget agreement Thursday.Bloomberg and City Council Speaker Christine Quinn announced the $59 billion budget agreement, which maintains the property tax rate cut rate of 7 percent for a second year. It also continues the $400 property tax rebate program for homeowners for the fifth year.

The budget increases city funding to the Department of Education by $129 million and the New York City Housing Authority (NYCHA) by $18 million over the levels proposed in the mayor's Executive Budget. This will ensure that schools will receive the planned level of funding prior to the reductions in the rate of spending announced earlier this year, and it will help NYCHA maintain its operations of community and senior centers.

"The news about the economy, and its effects on the city's finances, continues to be very sobering, and this budget reflects the uncertain economic outlook we face," Bloomberg said. "In partnership with Speaker Quinn and the City Council, we have agreed to restore funding to the Department of Education and NYCHA, and to maintain the $400 property tax rebate and the seven percent reduction in the property tax rate for one more year."

Reflecting the tough fiscal times the city is already in and the difficult outlook for the future, city-funded spending under this budget agreement is virtually flat for FY 2009 compared to FY 2008. The budget's spending increase of 1.6 percent in city-funds is well below the projected 2.7 percent annual rate of inflation.

"We have made some difficult though smart decisions that will help the city through the financial uncertainty ahead, while maintaining essential city services," Quinn said. "In particular, our children's education remained a priority. Last month, I promised to protect classrooms from being cut. And I'm proud that, together with Mayor Bloomberg and my colleagues in the Council, we were able to deliver on that promise."

The budget includes an increase of $129 million for the city's public schools over the amount proposed in last month's Executive Budget. These new education funds will be used to ensure that individual schools receive the full funding proposed before the FY 2009 reductions in spending announced in January. The money will also be used to focus on middle school reform and an initiative supporting English Language Learners, which are two priorities that are shared by Speaker Quinn and the Mayor.

The NYCHA funding will help preserve community center and senior center programs.

The budget maintains the early payment of $2 billion of debt expenses in FY 2010 and $350 million to pay expenses in FY 2011, as announced in the mayor's executive budget in May, to reduce the forecasted budget gaps in those years.

Thursday's budget deal comes as the City Council is scrutinized for its budget practices and Bloomberg's administration is taking steps to be more transparent in how it hands out special funding for council members' pet projects.

The budget will be passed over the weekend, a week ahead of deadline.

Fiscal year 2009 starts Tuesday.