(Updates with Bloomberg administration comment in fifth, sixth paragraphs.)
June 7 (Bloomberg) -- New York City’s proposed 24 percent decrease in capital spending during the next four years may harm its economy and infrastructure, said Richard Anderson, president of the New York Building Congress.
To pay for maintenance, Mayor Michael Bloomberg should seek new or increased charges for sanitation services, some park use, roads, bridges and parking, and a tax on sugared drinks, said Anderson, who leads an association of 400 developers, construction companies, unions and vendors.
“A system of dedicated user fees, with clearly defined and direct benefits to users, can ensure the stability and strength of the schools, roads and parks that undergird the city’s economy,” Anderson said in a memorandum to his membership posted on the Building Congress website today.
The mayor’s five-year spending plan, including a $65.7 billion budget for fiscal 2012, predicts that debt service will consume nearly 16 percent of tax revenue by 2015, up from about 13 percent this year. The ratio of debt service to tax revenue is one of several measures by which credit rating firms assess municipal credit, Anderson said.
The capital-spending reduction is a 10 percent cut from what the city intended to spend under a previous 10-year plan, said Marc LaVorgna, a mayoral spokesman. A deficit of more than $3 billion in fiscal 2012 made it necessary, he said.
“The mayor has overseen the largest capital-investment program in the city’s history and we are going to continue to have record-level investments because we are continuing to build for the future,” LaVorgna said in an e-mail. “We don’t have a blank check to spend.”
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
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