Gotham Gazette

The Place for New York Policy and politics

Bloomberg's Bluff

It was one day after Mayor Michael Bloomberg delivered a particularly grim budget proposal, and the mayor and Gov. David Paterson were in the same room.

They came together to open a one-stop Haitian relief center in Crown Heights, Brooklyn -- a joint effort by the state and the city.

Standing beside the governor, Bloomberg thanked Paterson for all the work the state had done and lauded the relief the center would bring to Haitian-American New Yorkers.

The two shook hands. Then Bloomberg left.

Any casual observer might think the mayor and the governor were on good terms -- that the mayor hadn’t spent the better part of the previous day criticizing the governor's executive budget proposal released last month.

On Thursday at City Hall, Bloomberg warned New Yorkers that his gloomy preliminary budget proposal could get even gloomier thanks to Paterson's plan for the state -- a proposal Bloomberg argues would cut an additional $1.3 billion from the city's $63.6 billion budget. The state's budget office disputes the city's calculation.

"We've acted responsibility, but for a long time the state has spent money they don't have," said Bloomberg on Thursday. "And it's coming home to roost."

The Bloomberg administration -- for the first time ever -- printed an additional budget plan to try to prove its point. Titled "Contingency Plan for Proposed State Budget Reductions," the alternate proposal would eliminate all public litter baskets and street cleaning. The government would shed 19,000 jobs, including more than 3,100 police officers and more than 8,500 teachers, through layoffs and attrition.

The plan, to some city observers, is practically apocalyptic. But others question whether it's warranted.

For years, the city has contended it does not get its fair share of funding from the state -- sending far more there than it gets back in return. The cards, officials argue, are stacked against the five boroughs.

But in this hand of political poker, is Bloomberg bluffing?

A Worst Case Scenario

Last week, Bloomberg released a $63.6 billion budget proposal -- a 7 percent increase from the $59.4 billion budget approved in June. Controllable spending, which does not include employee health care or pension costs, decreased by 1.8 percent, according to the administration.

The mayor took a hard line with labor, asking teachers to take a lower pay increase than anticipated next year -- 2 percent instead of 4. He said the city's other unions would receive pay increases in fiscal year 2011 -- which spans from July 2010 to June 2011 -- only if they increased their productivity or agreed to pension and health care savings.

The mayor's preliminary budget cuts $1.6 billion from agency spending, and it closes an approximately $4.9 billion deficit. The proposal does not include any across the board tax increases, though it does suggest including airline fuel in the city's sales tax.

But, Bloomberg warned, the city could be dealt an even worse hand.

If the state went forward with the governor's proposal, most of the mayor's original cuts -- tough to swallow for many as is -- could start to choke city services.

Add 42 additional fire companies to the 20 originally slated for closure. On top of the loss of 1,292 police officers (through attrition), would be layoffs of 3,150 officers -- bringing the city's police forces to the same level as 1985, according to the administration.

Teachers, forget salary disputes. If the governor's plan goes into effect, Bloomberg said about 8,500 classrooms would not have an instructor.

Under the mayor's original plan, elementary schools with less than 300 students would be without a school nurse. Under the doomsday scenario, a nurse would be absent in any city school with less than 500 students.

The Department of Sanitation would see a decrease of about $63 million in the next fiscal year under the mayor's preliminary plan. If Paterson's proposal is approved, the cut nearly doubles. Recycling would be reduced to every other week, most areas of the city would see cuts in trash pick up and you would have nowhere to throw out garbage when you're walking down the street.

City uniformed agencies, like police or sanitation, would be cut by almost another 4 percent under the Albany plan. Most other departments see cuts of about 7 percent.

In other words, the mayor's all in.

The City's Hit

The elimination of the city's revenue sharing aid accounts for the largest cut from the state. While other counties across the state saw a 2 to 5 percent reduction, the city's entire $656 million allocation was eliminated, Bloomberg said. The state also slashed the city's education funding by $493 million. The education department's budget is about $23 billion in fiscal year 2011.

The governor's office contends Bloomberg has exaggerated the state budget's effect on the city. Because the city and state use two separate accounting systems, the city is counting its revenue sharing aid for two fiscal years, state officials said. State officials say the city is only being cut one year, or about $328 million. Overall, the state contends the city cut is only $748 million, not $1.3 billion.

Officials at the governor's budget office argue the city has more resources than other areas of the state. For instance, the city's revenue sharing aid is a small portion of the city's budget in comparison to other large cities across the state -- Yonkers, Syracuse and Rochester rely far more on this type of funding, state officials say.

In the eyes of Albany, the city can live without it.

"We believe that the local fiscal impact figures that New York City is citing regarding Gov. Paterson's 2010-11 Executive Budget are inflated through the use of selective accounting," said Robert Megna, the state budget director, in a statement last week. "The Division of the Budget has produced a balanced and comprehensive analysis of the true impact of the executive budget on New York City and all other municipalities."

Down to the Bone

Since the beginning of 2007, according to the Bloomberg administration, the city has made seven rounds of agency cuts.

At some point, city officials say, decreases go beyond getting rid of the extra box of paper clips. They start to hurt.

"We keep getting closer and closer to the bone," said Bloomberg last week.

Gone are the savings from restructuring or adjusting overtime costs. In the mayor's doomsday budget the cuts would not only hurt, but be politically sensitive.

The mayor's office did not take aim at outside contractors. He said it would be police officers and teachers who would lose their jobs.

And some say, he did that for a reason.

"Is some of it theater? Probably," said Doug Turetsky of the Independent Budget Office. "You pick some of the most dramatic alternatives, so you're showing people this is going to happen. So they put pressure on their state legislators."

Even if the state went ahead with all the cuts, officials from Albany and New York City said they wouldn't expect the mayor to make the dramatic, sure to be unpopular slashes he outlined.

But if Bloomberg successfully lobbies the state, the city shouldn't expect to be held harmless from Albany either. This year there is no federal stimulus, said Carol Kellermann of the Citizens Budget Commission. Everyone will have to make sacrifices.

"I don't think the cuts will be as high as they are, but I'm sure the mayor thinks he really needs to sound the alarm to make sure they are lower," said Kellermann. "I don’t see how they can restore everything to New York City. There have to be some cuts."

Some advocates say their areas, particularly social services, have already been cut too much. And under the contingency plan these programs lose even more funding. Housing for those with HIV and AIDS would be cut by 11 percent, 500 soup kitchens would lose funding and 1,750 seniors would no longer have meals delivered to their homes.

"The cuts proposed in the mayor's preliminary budget are bad enough. If New York City doesn't receive its fair share of state aid, our human services sector -- especially child care, youth programs, and senior services -- will be decimated," said Susan Stamler, the director of policy and advocacy at the United Neighborhood Houses. "If the contingency plan goes through, it will present a nightmare scenario for New York City -- especially for human services and the communities they serve. New York City should not be unfairly excluded from state aid that every other municipality in New York receives."

A Fight Brews in Albany

The mayor has one ace up his sleeve: The legislature's New York City delegation.

"He certainly has an ally in me," said Sen. Carl Kruger, the chairman of the State Senate Finance Committee. "Does he have an ally in the State Senate? We have to temper the needs of the city with the needs across the state."

Giving the mayor another couple of good cards is the fact that it's election season. Every state legislator in the city is up for re-election this fall. If cuts run deep, the budget will likely be on voters' minds when they head to the polls.

Nonetheless, some state legislators are approaching both the city and state budget issue cautiously.

Austin Shafran, a spokesperson for the State Senate Democratic majority, said the Democrats endorse the mayor's priorities.

"We agree with the mayor that we have to do everything possible to adequately fund vital service areas, such as education, health care and public safety and maintain our commitment to creating jobs," said Shafran.

But Shafran declined to say outright that they would fight to reverse the city's cut.

On the Assembly side, a spokesperson for Assembly Speaker Sheldon Silver said only that his office was reviewing every budget -- both city and state. Other Assembly members are ready to fight for New York City, but they also realize both the city and state are in uncertain times.

"We are in unusual economic times. The state has a very serious shortfall in revenues, and we are have very, very difficult decisions to make," said Assemblymember N. Nick Perry of Brooklyn last week. "As a legislator from New York, I certainly am going to do everything I can to make sure to the greatest extent that we can we restore the proposed cuts that hurt New York City."

City and state officials agree that by the time it's enacted neither proposal will look as it does now. The state budget will have to be approved by April. After, the mayor will release his final budget proposal. He will then have to contend with the City Council's priorities.

All of that will mean the cards still have some shuffling to do.

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