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Issue of the Week
 
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WHAT'S THE BOTTOM LINE?

How much is a $5 billion deficit and what will it take the city to fill it?

Last spring, Mayor Michael Bloomberg presented a contingency plan, a kind of worst-case scenario, for the kinds of budget cuts that might be necessary. He never implemented the cuts, but the threat brought back images of the 1975 fiscal crisis, when the city had to lay off 63,000 employees, shut down firehouses, and close hospitals to keep from going bankrupt.

The mayor's contingency plan included:

  • Cutting the police force by 1,320 positions
  • Eliminating eight fire companies
  • Raising express bus fares from $3 to $4
  • Closing 15 senior citizen centers
  • Reducing garbage collection
  • Eliminating 57 youth programs
  • Cutting the number of parks employees by 10 percent
  • Eliminating emergency food programs
  • Closing 10 dental clinics
  • Cutting homeless shelter budgets by $3.2 million

But all of these would add up to only $500 million in savings!

Even if the city is willing to make these kinds of cuts, it would still have to make up the remaining $4.5 billion with some new tax and revenue proposals, such as:
25 Percent Property Tax $2.5 billion
Commuter Tax $ 500 million
East River Tolls $ 320 million
City Council's Personal Income Tax Plan $ 400 million
Require City Workers to Pay Insurance Premiums $ 500 million
TOTAL $4.2 BILLION

But Albany, which has already said it would not raise the commuter tax or allow East River tolls, would have to approve all of these except the property tax. The City Council would have to agree to the maximum property tax, which it is reluctant to do. And unions would have to agree to pay for a portion of their medical benefits.

In other words, much of this is unlikely. But over the next few months, the city is going to have to find the billions from somewhere.

OTHER RESOURCES

FORTHCOMING FORUMS ON THE BUDGET

November 20
Mass Transit Fare Increase: Fair or Foul?
Big Apple Budget School
Milano Graduate School
72 Fifth Avenue
New York, NY
10:00 a.m. to Noon
Event is free but reservations are required
Call Caren at 212-965-1967 x201 or Rachel 212-965-1967 x206
E-mail [email protected]
Refreshments will be served.

December 4
Closing the Gaps in the New York City Budget
Center for New York City Law and New York Law School
New York Law School. Enter at 47 Worth Street, between Church Street and West Broadway in Manhattan
8:15 a.m.
Event is free but reservations are required
Call 212-431-2115
Fax 212-941-4735
E-mail [email protected]

December 4
The Next Revolution: New York City in the Emerging New Economy
New School University
8:30 a.m. to 12:30 p.m.
Sponsored by New School University and the Federal Reserve Bank of New York
For more information, contact Krista Dente at 212 720-6149

December 7
How Should the City Close a $5 Billion Budget Gap?
Citizens Budget Commission
By invitation only.
Contact [email protected]

December 11, 2002
Fiscal Year 2003 Budget Modification: Sharing the Pain or Protecting the Privileged?
Big Apple Budget School
Milano Graduate School
72 Fifth Avenue
New York, NY
10:00 a.m. to noon
Event is free but reservations required
Call Caren at 212-965-1967 x201 or Rachel at 212-965-1967 x206
E-mail [email protected]

Tell us what you think about the fiscal crisis, and the possible solutions, on our budget gap message board.

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Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation, the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation’s public education programs.  Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.