Budget Likely to Shock
January 27th, 2009
What can we expect from Mayor Michael Bloomberg’s preliminary budget, scheduled for release on Friday?
“A shock budget,” said the City Council’s Finance Director Preston Niblack this morning.
At a breakfast hosted by the New School’s Center for New York City Affairs, the finance director and a number of other panelists, including the Independent Budget Office’s Ronnie Lowenstein, opined on what the administration could do to address the debilitating fiscal crisis gripping the nation and the Big Apple.
Extracting from a fiscal analysis the budget office put out earlier this month, Lowenstein predicted the city would lose 243,000 in fiscal year 2009, which ends in June, and that we will face a $4.3 billion budget gap for next year’s budget (That’s more than 10 percent of city-funded revenues).
The budget process, which Lowenstein predicts will be year-round for the next couple cycles due to the recession, is officially kicked off this Friday by the preliminary budget release. The council’s budget response will follow, then the mayor’s executive budget, culminating in the final budget, which must be approved by midnight July 1.
Niblack said the council is more likely to raise the income tax than the sales tax, which it would find regressive. Both would need approval from Albany, which has its own fiscal woes.
The city has already seen three rounds of budget cuts, and Friday’s proposal will likely repeat the slashing. Out of the five participants in this morning’s panel, four predicted the city would see layoffs this year (Only Mark Winston Griffith of the Drum Major Institute remained optimistic).
Lowenstein reasoned that because of the growth in the city’s labor force during the most recent boom (there are 280,000 jobs, she says), the city can afford to cut some positions.
“I wouldn’t say, ‘The sky is falling,’ when we have rounds of cuts coming up,” Lowenstein said.By Courtney Gross on January 27, 2009, 5:48 pm
In category: Albany,Economy,Gotham City,Governing,nextNY,Public Finance | Comments Off