More Taxes and Layoffs to Come
November 5th, 2008
Two months before his regularly scheduled budget modification, Mayor Michael Bloomberg gave an update on the city’s fiscal situation this afternoon.
The gist: things aren’t looking so great.
Our deficit for fiscal year 2010 is so large the city will not issue a $400 property tax rebate it pledged to send to households when the budget was approved in June. The mayor also said the city would rescind the 7 percent property tax break in January. (To see how the budget process works, play our game: The Budget Maze.)
“We’re not going to walk away from our obligations,” said Bloomberg. “We’re just not going to return to the dark days of the ’70s.”
Bloomberg said the city needed a balance of increasing revenues through taxes and cutting services.
Those two plans, according to one councilmember, are disgraceful. Councilmember Simcha Felder, who was hanging out in City Hall’s rotunda as the mayor’s press briefing broke this afternoon, said rescinding property tax relief for New York City residents goes against the mayor’s promise. Just last week, Felder said, residents were calling 311 asking where their checks were. He said they received responses that they were in the mail.
Hmmmm. Apparently not.
Because of a fall off in revenues, attributed to the financial crisis swamping Wall Street, the city faces a $4 billion budget gap from now until the end of fiscal year 2010, which would be in July of that year. The mayor’s latest plan, which includes layoffs, higher taxes and service reductions, closes that hole to $1.3 billion. Bloomberg still projects $5 billion budget gaps for both fiscal year 2011 and 2012.
The mayor also suggested tax measures the city could consider for next year’s budget, which include a sales tax increase, rolling back the clothing tax exemption and increasing the personal income tax.
In addition to the tax increases, the city will layoff 200 employees at the New York City Housing Authority, cut a police class (effectively reducing the peak uniform headcount by 1,000) and eliminate 338 positions at the Department of Education — none of those positions would be in the classroom, the mayor said.
The mayor said the city’s workforce will be cut by 3,000 positions, and about 80 percent of that will be through attrition.
The city could also close an STD clinic in East Harlem, implement a 5 cent tax on plastic bags, reduce hours for fire engine companies in commercial areas at night and on weekends and eliminate a dental health program at 44 Department of Health and Mental Hygiene sites.
These budget modifications will be going to the City Council in the coming weeks. When asked whether the administration could implement them without City Council approval, Bloomberg alluded to the fact that he might be able to. He added that it’s best to reach a consensus.
When asked how the proposals might go over, the mayor quipped that it would be a “lively discussion.”By Courtney Gross on November 5, 2008, 2:29 pm
In category: Economy, Gotham City, Public Finance | 3 Comments »