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Council Gives Final OK on Budget


Christine Quinn
Photo (cc) 2010 William Alatriste
City Council Speaker Christine Quinn explains the budget before yesterday's vote.

Libraries won't shutter, public pools will remain open for swelter-saving dips all summer long, and fire companies are off the chopping block.

By a vote of 48 to 1, the City Council approved a $63.1 billion budget Tuesday that was less doom and gloom than what many New Yorkers initially anticipated. Instead of shuttering 50 senior centers, council officials say their plan will likely keep half open.

At least seven of 16 daycare centers slated for closure under the Administration for Children's Services will remain open all year. The public advocate's office -- shredded by multiple rounds of budget cuts in previous years -- will get another $600,000.

"This is a responsible, recession based budget," said Council Speaker Christine Quinn. "We had a couple of goals. We wanted to pass a budget that didn’t raise taxes, that didn't expand borrowing, that protected core services."

All that was accomplished, Quinn said.

Nonetheless, some advocates say the neediest New Yorkers will bear the burden of these cuts. The effects of that, they claim, will reverberate for years.

Another Round of Cuts

Just outside City Hall on Tuesday Heather Palenschat, a contract manager at the Community Service Society, delivered bad news.

An assistance program connecting vulnerable or immigrant New Yorkers to health care didn't make it into the budget. The 10-year-old $2 million program was eliminated.

"We don't understand why we were cut," said Palenschat. "It was super, super shortsighted."

The health care assistance program wasn't the only one that didn't survive. Advocates said after school programs were cut in half. Day care programs for seniors have been crippled. Adult literacy programs were also hit.

"The little haircuts that are often talked about are real cuts and critical services for communities," said Susan Stamler, the director of policy and advocacy for United Neighborhood Houses. "This is not a good budget, and I think we need to look long and hard at how we find the additional revenue needed to build and support services for our communities."

In the end, Quinn said, the council couldn't preserve everything. But she said the programs it did save are core services, like $37.4 million to go toward keeping 202 caseworkers at the Administration for Children's Services. Quinn said those caseworkers were added after the death of Nixzmary Brown in 2006.

The council steered $61.5 million to libraries, which will prevent the closure of branches but bring service down from six days a week to five. The council also provided money for mental health services at 12 homeless facilities and $36 million to keep 20 fire companies open.

The mayor initially threatened the city's fiscal plan could eliminate up to 11,000 city workers. Yesterday, Quinn said the council did not have an estimate for how much the city's work force would shrink. Officials said it would be far less than originally anticipated.

Just the Numbers

All in all, the council added about $397 million to the mayor's executive budget proposal. The fiscal year 2011 budget, which takes effect Thursday, rolls over $3.6 billion in surplus from fiscal year 2010.

Of the council funding additions, about $165 million went to the council's discretionary funding -- the money it sends to area nonprofits, which has been the subject of several scandals. While that particular pot decreased by approximately 20 percent in fiscal year 2011 compared to fiscal year 2010, the overall amount of money the council added to fiscal year 2011's budget increased by 9.2 percent compared to the previous year.

For more on who got what in the council's discretionary funds, go here.

While the budget does not raise taxes, the council did approve several increases in fees, including an increase in the elevator inspection fee, a monthly probation fee for those who have been convicted of driving under the influence and another set of fees for those seeking custody of children in family court.

During the vote on the council chamber yesterday, members cheered on colleagues and celebrated the end of the budget season. For some, that struck a nerve.

"While you're clapping and celebrating some New Yorkers are going to be crying," said Councilmember Charles Barron, the lone vote opposing the budget. "This was not a budget of necessity, this was a budget of choice," he added, arguing the council should have taken money from the city's health care trust fund to cover the cuts.

Council members who voted in favor of the budget opposed taking money from the fund, contending the city could need it for even grimmer times.

"Am I totally satisfied with this budget?" asked Councilmember Robert Jackson, the chairman of the Education Committee. "No. Could we possibly have done more? Yes."

But ultimately, he concluded: "Could we have done worse than we have done? Absolutely yes."

Bloomberg and Council Shake on Budget


Handshake
Photo (cc) 2008 thinkpanama

With six days to spare, the City Council and the Bloomberg administration agreed on a $63 billion budget late last night, saving both fire companies and public pools from closure.

Facing some of the steepest cuts in services since 2002, both Mayor Michael Bloomberg and Council Speaker Christine Quinn declared victory in City Hall's rotunda just before 11 p.m. Thursday, marking the occasion with the customary handshake and a kiss on the cheek. Both the mayor and the speaker emphasized the city's "on time" budget, taking a silent jab at the state, whose budget is nearly three months late.

The budget does not include any tax increases.

Calling the agreement "good news," Bloomberg said some of the measures in the fiscal plan would make government "better and more efficient." The comments were in striking contrast to his budget presentations earlier this year, which predicted doom and gloom for the city and layoffs in the thousands.

Nonetheless, the mayor acknowledged last night that the budget was full of tough choices.

"There just isn’t enough money to do everything we've done before and everything we'd like to do now," the mayor said. "But we worked hard to balance and preserve the core services we all rely on."

As part of the agreement, the council successfully negotiated to stave off the closure of 20 fire companies, and it restored funding for more than 200 positions at the Administration for Children's Services. About 3,000 slots in prevention programs and 72 child care classrooms at the children's services agency were also taken off the chopping block.

While the administration and the speaker said things could be much worse, the city's fiscal year 2011 budget is still not picturesque. The budget cuts $1 billion in spending. Both the speaker and the mayor acknowledged layoffs were necessary to deal with a $1.3 billion cut from the state and lower tax revenue in the city. Last night, officials did not have an estimate for how many people would lose their jobs.

In the mayor's executive budget, approximately 1,600 city workers were slated for layoffs outside of the Department of Education. Bloomberg said last night the Department of Education would lose some teachers this year, but only through attrition.

Cuts Here, Saving There

Though some of the controversial cuts were reversed in last night's agreement, many New Yorkers will still feel pain.

Libraries faced $75 million in cuts in the mayor's executive budget, which threatened to close branches across the five boroughs. Quinn said last night that all branches would remain open, but services would be reduced from six days to five. The announcement was met with applause by the dozens of fellow council members behind her.

The mayor's executive budget threatened to close 50 senior centers and 16 day care centers. Under the budget agreement, some of those facilities will remain open, said council officials, but others will have to shut. As of last night, officials did not have details on what centers would stay open.

The mayor said the senior centers that would close are facilities "that nobody goes to."

Not everyone agreed.

"We appreciate that there is an agreement to keep some of the senior centers open," said Bobbie Sackman, the director of public policy at the Council of Senior Centers and Services. "Even the smallest senior centers, the ones that were losing attendees, somebody is going to miss that senior center."

In the budget agreement, the city also rolled back a proposal to eliminate 248 HIV and AIDS case workers at the Human Resources Administration.

Quinn also said the council's controversial discretionary funding -- money doled out to local nonprofits member by member -- would be "significantly less" than in prior years.

The council is expected to vote on the budget next week, and more details of what has been slashed will be revealed then.

Although Bloomberg was optimistic that the city would emerge confidently from the Great Recession, obstacles are still on the horizon. Should the city not receive federal funding for Medicaid, it could be back to the drawing board this fall, the mayor warned.

And, he added, there is always fiscal year 2012 -- where the city already faces a $3.7 billion gap.

Taxing Wall Street Would Ease Budget Cuts


Wall Street
Photo (cc) 2009 jpellgen

This year's budget for New York City is among the most challenging we have seen in recent years, including nearly $2 billion in painful cuts to schools, day care, senior centers, libraries, firehouses, food programs, jobs program and other essential services.

Even as working New Yorkers are bracing themselves for these cuts, Mayor Michael Bloomberg and his administration have refused to consider taking a more balanced approach by enacting new revenue-generating options that would reduce cuts by asking Wall Street and the wealthiest city residents to put in their fair share. The current economic crisis has only made already longstanding inequities in our city much worse. In taking revenue options completely off the table, the administration is failing to demonstrate the leadership that the majority of New Yorkers needs in order to bring more fairness to the current budget and to secure a stable future for all residents of our city.

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With an even bleaker outlook for next year, the city simply cannot wait any longer to ask the wealthiest for their fair share. This coming year, thousands of low and moderate-income families could find themselves hit by budget cuts on multiple levels and across generations -- in just one low-income area in Brooklyn, two child-care centers, a senior center, a health clinic and a public pool are all on the chopping block. Meanwhile, the safety and quality of life of our communities as a whole could be compromised by the closure of fire companies, the reduction of public health services and decreased maintenance in our parks.

How many more cuts can our families and neighborhoods endure?

What New Yorkers Say

This spring, almost 2,000 New Yorkers responded to our online survey about the city's budget and to consider revenue generating options. An overwhelming 89.4 percent said that the city should protect vital services by asking more from those who can afford to pay. Instead of solely slashing services, survey respondents preferred closing a tax loophole for hedge-fund managers and asking for just a bit more from our wealthiest citizens (Read more about the survey results here).

In spite of the financial crisis, Wall Street just had a record year, with $61 billion in profits, largely due to a taxpayer-funded bailout. Yet private equity and hedge fund managers enjoy a loophole that makes the vast majority of their income exempt from the New York City unincorporated business tax (which any other partnership or sole proprietor business is subject to). Closing the city’s "carried interest" loophole would generate $100 million to $200 million for New York City, desperately needed funding that could help restore some of our drastic cuts.

This issue has gotten the attention of Congress. The House of Representatives has passed a bill that would begin to close the federal loophole, and the Senate may be looking to do the same. Sen. Charles Schumer -- a strong supporter of Wall Street and its role in the city and state’s economy -- has come out in favor of the House's proposed change and has rejected claims that it will create adverse effects for our city’s financial sector.

Survey respondents also favor restructuring the city's personal income tax to make it fairer, and ask for a modest increase on our wealthiest residents. Right now, when all state and local taxes are considered, the wealthiest 1 percent of New Yorkers actually has a lower tax rate than the middle class, the working class or the poor.

We propose adding two additional tax brackets for high-income earners -- one for joint-filers earning income over $250,000 (to be taxed at 1.2 percent) and another for those earning income over $500,000 (to be taxed at 1.8 percent). For a household earning $500,000, this would mean just $1,000 more per year. By putting these reforms in place, the city can generate over $1 billion in new revenues, while reducing the tax burden on families earning under $40,000 (who are already exempt from federal taxes).

The working families of this city have already been asked to make enormous sacrifices in recent years, in part as a result of a regressive sales tax, property tax and water rate increases. Now they will continue to make more sacrifices as they see the erosion of the services that so many of them depend on.

It is time to ask hedge fund managers, Wall Street executives and the wealthiest New Yorkers to share in the sacrifices that we are all making in these difficult times and to put in their fair share.

Unfortunately, Bloomberg has refused to have any discussion of revenue generating options. The mayor's "dead on arrival" response to approaches supported by most New Yorkers is disappointing and short-sighted.

We can achieve a balanced approach here. There will have to be some difficult decisions and even many painful cuts. But if we adopt a fair-share approach that balances cuts with modest revenue increases from those who can most afford it, we can make sure our neighborhoods and our city remains strong and vibrant through these tough times and move together toward better times ahead.

City Council members Brad Lander of Brooklyn and Melissa Mark-Viverito of Manhattan chair the council's progressive caucus.



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