Bloomberg News

NYC’s $68.7 Billion Budget Retains Teachers, Bloomberg Says

May 03, 2012

New York Mayor Michael Bloomberg today presented a revised $68.7 billion budget that contains no new taxes and accepts a City Council call to retain more than 2,000 teaching positions that he previously sought to eliminate.

The 2013 spending plan still contains about $170 million in cuts to day care, summer camp and after-school programs affecting about 52,000 children, according to the Children’s Aid Society. City Council Speaker Christine Quinn said she will oppose the reductions. The budget requires council approval by June 30, the end of the city’s fiscal year. Council members also object to Bloomberg’s proposal to save $43 million by closing 20 fire companies, she said.

The mayor, an independent, told reporters that he expected those and other issues to be resolved through negotiations. He said he agreed with Quinn, a Democrat, about the importance of day care and other youth programs. He expressed less agreement about the fire companies, citing data showing the fewest city fire deaths since such statistics have been kept.

“When we can afford it, we can provide more services,” Bloomberg, 70, said at City Hall. He predicted a 2014 deficit of $3 billion, and a $3.7 billion gap in 2015. “We are going to face some significant challenges going into 2014,” he said.

The financial plan reflected $352 million less in tax revenue, primarily from Wall Street, and $143 million more in expenses than the mayor anticipated in his preliminary financial plan released in February. The total size of the budget, which is up from $66 billion last year, remained the same.

CityTime Settlement

Most of the $495 million gap may be closed with $466 million from a March legal settlement with Science Applications International Corp. over alleged fraud in installing CityTime, a payroll-management system, he said.

Charles Brecher, research director for the Citizens Budget Commission, a business-funded fiscal watchdog, said his group was concerned that the budget relied on “one-shot” revenue generators such as the CityTime settlement, a $1 billion sale of taxi medallions and about $2 billion over the next two years from a trust fund to pay future retirees’ health benefits.

Kathryn Wylde, president of the Partnership for New York City, an association of corporate chief executives, praised the spending plan, saying it showed “continued fiscal restraint by the city,” allowing for “expanded investment in our public- school system without raising taxes.”

Tourism, Higher Education

Debt service is among the fastest-growing nonagency expenses, increasing to $7.2 billion in 2016 from $4.8 billion in 2011, according to the budget documents.

Growth in tourism, film and television production, higher- education hiring and technology businesses offset decreases in tax revenue from the financial industry, the mayor’s office said yesterday.

The city has regained all the jobs lost since the 2008 financial crisis, eclipsing its record employment level set in 1969, Bloomberg said. By comparison, the U.S. has recaptured about 40 percent of the jobs lost since then, he said.

Most of the increase has come in industries such as tourism and retail that don’t pay as well as finance, resulting in less growth in total personal income, the mayor said.

In abandoning his February plan to eliminate teachers through attrition, Bloomberg satisfied a demand from Quinn, who yesterday estimated that 1,800 positions would be affected. Today, she put the total at 2,600.

“This keeps school budgets whole and prevents classroom sizes from rising further,” said Quinn, 45, who is considered a candidate for mayor next year. “I am deeply concerned about cuts to childcare programs.”

The mayor, whose term ends in 2013, is the founder and majority owner of Bloomberg News parent Bloomberg LP.

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus