NYC mayor orders more budget cuts

December 10, 2008 4:26:04 PM PST
Mayor Michael Bloomberg delayed the next class of firefighters on Wednesday as he ordered every city agency to slash spending by another 7 percent for next year. Bloomberg informed the Fire Department that the upcoming class of about 100 firefighters would not enter the academy this winter as "things have unfortunately gotten worse and not better," deputy mayor Ed Skyler said.

The delayed firefighter class is just the latest victim as Bloomberg scales back city services and promises tax hikes amid a nationwide recession.

In a letter sent late Tuesday to all city agency heads, Bloomberg's budget director, Mark Page, warned that tax collections in November were even lower than forecast, "continuing an alarming trend."

Agencies are required to submit spending reductions to the mayor's budget office by Dec. 22. The plans must identify specific cuts to reach a 7 percent reduction, or $1.4 billion citywide, in fiscal year 2010, which begins in July.

That could mean even more layoffs than the hundreds announced in November, Skyler warned.

"I can't speculate as to what they will propose, but clearly we are in a dire situation as far as what cuts have happened, and the next round of cuts will certainly have a deep impact on the city's workforce," he said.

Skyler characterized the city's current economic woes as being "drastically worse" than the slump that followed the 2001 terrorist attack on the World Trade Center.

At that time, some sectors of the local economy, like real estate and tourism, stayed strong while others sagged.

"A lot of the revenue generators that sort of cushioned the blow six years ago aren't in effect right now," he said. "This is a crisis that is hitting every sector of our economy."

The belt-tightening order this week comes not long after the mayor ordered a 2.5 percent reduction this fiscal year and 5 percent in 2010.

"We are going to have an enormous problem," Bloomberg told reporters Tuesday. "Even with all of the cuts that we have proposed, even with all of the revenue increases that we've proposed, we probably have a few billion dollars deficit."

A $1.3 billion gap is still forecast for fiscal 2010, Page noted in his letter. Multibillion-dollar deficits loom in the next few years.

Bloomberg, an independent who is running for re-election next year, already is in the midst of contentious negotiations with the City Council over his last round of cuts announced in November.

He presented a budget update that proposed cutting hundreds of jobs, canceling the next class of police cadets, raising various fees and fines, closing health clinics and reducing nighttime staffing at some firehouses. He also is seeking to eliminate two pieces of property tax relief, including a program that sends $400 rebate checks to homeowners.

The rebate program, if revoked, would put $256 million back into the budget. It remains a sticking point in the negotiations with the City Council and is the subject of a pending lawsuit.

Council members, including Speaker Christine Quinn, have come up with their own proposals. A bill to raise the city's hotel tax - a move Bloomberg has opposed - was introduced on Tuesday. The tax would go up by 0.875 percent, generating an estimated $80 million by the end of fiscal 2010.

For a room rate of $300, the increase would amount to $2.62 per night.

Bloomberg said he'd had "heated" discussions with Quinn.

"She's trying to do what she thinks is right," he said. "We're trying to do what we think is right."

Bloomberg also has said he is not ruling out raising income taxes. Those could go up by as much as 15 percent, meaning an annual increase of $233 for a resident earning between $50,000 and $70,000 a year.