Bloomberg gives grim economic update

January 30, 2009 9:13:30 PM PST
Mayor Michael Bloomberg is warning that New York City tax revenues are headed for a devastating fall. He says economically sensitive taxes - like personal income, sales, business and real estate - are projected to fall by $5 billion in fiscal 2010, which begins in July.

The mayor is proposing $955 million in cuts and says layoffs are likely.

"You can only get so much blood out of a stone" with budget cuts and other measures, Bloomberg said. After that might come layoffs, he said. He is confronting a $4 billion deficit for the next fiscal year, which begins in July.

The mayor's budget plan spreads the pain.

One thousand fewer police, libraries face a seven percent cut and the sales tax would go from 8.3 to 8.6 percent.

The economic crisis is once again to blame, according to the mayor.

"We had prepared for a downturn, but I think it's fair to say nobody prepared for the severity of the downturn that we have been experiencing," Bloomberg explained.

The Department of Education faces the most frightening scenario if Albany doesn't come through with more help. The city needs almost 800-million dollars from the state or up to 15-thousand teachers could be laid off.

"These kids need help. There are a lot of kids that I know need help because I volunteer sometimes. I feel the budget cuts. They can't do that," Patricia Morrello said.

At city hall, lawmakers were alarmed at what the mayor's being forced to consider -massive layoffs at his number one priority - fixing schools.

"I'm most concerned about employment. People losing their jobs. The economy already hurting. When America or New York City catches a cold, the black and Latino communities catch pneumonia," Councilman Charles Barron said.

The mayor's response to those worried about education? Call Albany.

"We will have to find a way to keep our school system going. We are not walking away from our school system," he said. "Would you like to cut the entire police department to pay for it?"

The mayor's budget scenario would also close up to 16 fire companies. Parking meter fees would up with a quarter buying 20 minutes instead of 30. He also wants a new nickel tax on plastic bags and layoffs could be coming to the department of homeless services.

"I'm very much concerned we are going back to the 1970's and then there will be more homeless on the streets," Councilwoman Letitia James said.

Nobody likes the mayor's budget, but fiscal experts are calling it fair.

"It's recognizing we're in very tough times and it's a tough budget, but it's appropriate for the situation we're in," said Charles Brecher of the Citizens Budget Commission.

Bloomberg asked all city agencies last month to submit plans for cutting spending. He'd already announced $500 million in cuts for this fiscal year. Those included a round of layoffs, delays to the next class of firefighters and police officers, plus a property tax increase.

Read a copy of the budget plan (PDF)

Review the presentation slideshow (PDF)