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CITY COUNCIL BUDGET RESPONSE

The New York City Council proposed a city budget that would spend $350 million more than the fiscal plan Mayor Michael Bloomberg outlined in January. It would also offer more tax breaks to businesses, renters, and low-income New Yorkers.

The council's response to the mayor's $45 billion budget is a usual part of the budget process. However, this year, it was more elaborate and detailed than in the past. For the last two years, the mayor and the City Council have been faced with enormous $5 billion deficits. This year, there is a projected $1.4 billion surplus, and Mayor Bloomberg and City Council Speaker Gifford Miller are battling over how to spend it.

The mayor and the council will continue negotiations in upcoming months and both sides must agree on a budget before the next fiscal year in July.

Money for Schools, Youth, and Firehouses
The council argues that the city is in a better financial situation than the mayor admits and that more money should go to senior centers, libraries, summer youth jobs, and college scholarships and to help low-income New Yorkers.

The main component in the council's spending plan is a $37.5 million effort to reduce class size. The plan aims to reduce class size from 25 to 20 students in 567 kindergarten through third grade classrooms. The council's plan for smaller classrooms is a direct response to Mayor Bloomberg's policy of holding back third-graders who do not meet education standards.

"Fixing our schools is first about making a real commitment to early intervention to give kids the tools they need to succeed from the start," Miller said.

In addition, the council proposes spending an additional:
-$145 million to guarantee private bus service.
-$30 million to restore six and seven day library service.
-$12 million for senior citizen centers.
-$11 million for summer youth job programs.
-$10 million to create more day care slots.
-$8 million to reopen six firehouses that the mayor closed last year.
-$6 million for special education teacher development.
-$5.5 million in AIDS/HIV programs.
-$2 million for a pre-kindergarten pilot program.
-$2 million for district attorneys.

Spreading the Tax Cuts Around
In 2002, when the city faced a deficit, the mayor and the City Council agreed to raise the property tax 18.5 percent to help balance the budget. Now the two sides are battling over how to give back.

Mayor Bloomberg's tax cut plan would give a $400 annual tax rebate to owners of houses, condos, and co-ops regardless of the value of the property. Business owners and landlords of large buildings, however, would not be eligible.

Miller proposes cutting property taxes by two percent for all residents, businesses and property owners. A single-family homeowner with a $400,000 house would get about $50, an owner of a condo of the same value would get about $125 and the average retail store would receive a $520 rebate.

Miller argues that Bloomberg's rebate would only apply to 20 percent of the property owners in the city. By cutting property taxes for landlords, the speaker contends, even those who rent their apartments could see their rent decrease by about $45 a year.

The council also wants to eliminate the entire 18.5 percent property tax increase for 140,000 senior citizens on fixed incomes. And the council wants to create a version of the earned income tax credit for low-income New Yorkers. Under the plan, a family of four making $25,000 a year would get $150 back from the city.

Bloomberg has called Miller's plan a tax break for "big corporations and big landlords." Miller has called Bloomberg's plan "a gimmick straight out of the Bush playbook."

Bars, Trees, and Parking Tickets
In addition to reducing property taxes, the council also proposed several programs to reduce fines and lower costs for New Yorkers.

The council wants to give $11 million in tax breaks to bars and restaurants that may have seen a decline in business after the smoking ban was instituted.

Another program would give $50 for homeowners who may have to pay for pruning trees near sidewalks. It would cost the city $5 million.

And the council wants to reduce parking tickets from $115 to $90.

Trying the Commuter Tax - Again
As in the past, the City Council called on the State Legislature in Albany to institute a commuter tax, which was repealed in 1999.

The council's commuter tax would impose a 1.1 percent income tax on the 800,000 people who live outside of the city, but commute in for work. The council estimates the tax would generate $1 billion in revenue, which it would use for building new schools and affordable housing.

Last year, Mayor Bloomberg called for a larger commuter tax, but lawmakers in Albany opposed it. The mayor did not include a commuter tax in this year's budget.

A Rainy Day Fund
The council also wants the State Legislature to approve a $100 million "rainy day" fund, which would allow the city to put away money for a time of extreme fiscal crisis. Currently state law prevents such an action.

This proposal - and all of the tax cuts - would require state approval.