Bloomberg's Cuts

With an already dim fiscal picture turning darker, Mayor Michael R. Bloomberg on Thursday proposed a budget that would increase spending by 3.7 percent but cut money from every city department, from sanitation to schools.

The proposed $58.5 billion spending plan is a sharp departure from those of recent years, when unexpected surpluses fed by booms in the real estate and financial markets allowed the mayor to unveil ambitious new programs.

The mayor said the overall spending increase was driven by expenses he said were difficult to control, including Medicaid costs, health care and pensions for employees and debt service. To compensate for those costs and falling revenues, he said, the administration was trimming other spending by roughly 4.3 percent.

His plan calls for scaling back subsidies for public libraries, cultural programs, meals for the elderly, tutoring at the City University of New York and summer jobs for youth. The mayor could face a battle as the City Council focuses on those programs, many of which are dear to its members.

“We haven’t seen the effect of the cuts on the agencies,” said Councilman David I. Weprin, chairman of the Finance Committee. “We may be proposing alternative cuts, and we may be arguing for or against certain cuts.”

Mr. Bloomberg included a popular $400 property tax rebate for homeowners in his budget, but he warned that if the economy continued to sink or if the city did not receive enough state and federal aid, the final budget for the fiscal year beginning in July could include higher property taxes and more severe service cuts.

“If we try harder we can all find these kinds of savings without cutting back essential services or even most of the very desirable things that we do,” Mr. Bloomberg told commissioners and reporters at City Hall. “If we can’t get cooperation, if we can’t get help that we’re counting on, if we can’t get the things that we have been promised in the past,” he continued, taking aim at Gov. Eliot Spitzer, who is proposing a reduction in aid to the city, “then I don’t think that is possible.”

Should further cuts become necessary, Mr. Bloomberg said, he would fight hardest to retain the property tax rebate, saying that owners of one-, two- and three-family homes have not really benefited from the extraordinary surges in property values and have had to struggle to meet higher tax burdens.

Along with the proposed budget, Mr. Bloomberg presented a four-year financial plan that anticipates deficits of about $4.2 billion in the 2010 fiscal year, $5.6 billion in 2011 and $5.3 billion in 2012. Mr. Bloomberg’s charts — which featured more bad news than good, he noted with a wry smile — showed that in June the city anticipated that Wall Street would generate $16.8 billion in profits in 2007, but now expects just $2.8 billion.

Nonetheless, Mr. Bloomberg appeared unusually relaxed through the nearly 90-minute presentation, and sought to reassure New Yorkers that while difficult times were ahead, they were not yet dire. He said he thought the economy would continue to decline but had no way to truly know, and urged residents to enjoy themselves.

“If you live prudently and put some money away and work hard, you’re probably going to be O.K.,” he said at one point. “Don’t sit there and hunker down and, you know, try to live in a tent.”

Despite Mr. Bloomberg’s assurances, the proposed budget could lead to noticeable service reductions, especially at the Department of Education, which is set for a $324 million cut in the next fiscal year and is undergoing a $180 million reduction in the current fiscal year. Mr. Bloomberg, who won control of the school system in 2002, has staked much of his legacy on its improvement and has generally increased spending or allowed the department to avoid reductions, even in tight times.

Schools Chancellor Joel I. Klein said that most of the reductions would be passed down to individual schools, with an average of more than $100,000 coming out of each school’s budget, although the final figures could vary widely depending on size and demographics.

Principals will, he said, “have to tighten some programs,” like eliminating intensive tutoring on Saturdays or after-school activities.

“My theory is that they should have some discretion. Different schools may find that they have to cut back on a program or that they may have to make some adjustment with the staff.”

While the central administration will make some trims, like reducing costs when purchasing supplies, the brunt of the cuts would fall on the schools. The department will save $1 million by reducing the number of citywide standardized tests to 8, instead of 10 as originally planned, and cut $10 million by eliminating some teaching positions for English as a second language instruction. Mr. Klein defended the decisions, saying that the Education Department had cut $230 million from the central administration office in recent years.

The city also transferred some spending responsibilities, including paying for computer repairs, to individual schools.

Randi Weingarten, the president of the United Federation of Teachers, criticized Mr. Klein, saying he did not do enough to protect the education budget and had misplaced priorities.

“Instead of looking at all the test-driven materials or looking at the bus contract or looking at other kinds of things where there is fat in the system, the first thing they do is make the schools pay for it,” she said. “The chancellor should be the champion of the schools, not cut into the schools.”

Mr. Bloomberg’s proposal, which seeks to reduce overtime costs at a number of agencies, would also cut funds for 1,000 police officer positions that were authorized in richer times, officials said. The move is not likely to have much practical effect on the size of the force since the headcount at the department, which has been facing a recruiting crisis because of low starting salaries, has remained well below the maximum allowed.

The mayor and his aides portrayed many of the trims as savings realized from greater efficiency or shifting realities, like closing shelters because of a decline in the population of single homeless adults. Pressed on the cuts to the sanitation budget, for example, aides said that garbage truck routes would be consolidated and could not guarantee that residents would see as many pickups.

-In Turnabout, Mayor Seeks Spending Cuts

Related;
Mayor Presses Albany on Tax Relief;

The research director at the Citizens Budget Commission, Charles Brecher, said he suspects Mr. Bloomberg will use the prospect of a property tax increase to pressure lawmakers to restore the expected money.

It's "a long-standing strategy that between January and April, a mayor tries to set up the terrible things that will happen in the financial plan if the Legislature doesn't provide some amount of aid," Mr. Brecher said. "His threat is that he's not going to cut things, but that he is going to have to re-impose this tax."...

When testifying on the governor's budget today before the Assembly Ways and Means Committee and the Senate Finance Committee, Mr. Bloomberg also is expected to focus on Mr. Spitzer's proposal to collect more than $1.1 billion through a series of fees and tax changes, which business leaders have warned could threaten the economy and dissuade businesses from locating in New York....

He has argued in the past that the city carries the state economy on its shoulders and should therefore receive more money from the state. Last week, he revisited this theme yet again, including a chart in his financial plan summary illustrating that the city pays $11.1 billion more in state taxes than it receives in funding.

"New York City needs to be treated fairly by New York State. We need to get back our fair share of New York State tax revenues," the financial plan summary states. "Our budget and financial plan includes the funding commitments that New York State made to the City last year, including the commitments to education capital and revenue sharing."