Issue of the Week
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Guide to the City's Budget Gap

11 November 02

Throughout the campaign, Governor George Pataki expressed nothing but optimism about New York's fiscal health.

Candidate Pataki said he would not increase subway and bus fares, he did not want to hike tuition at public colleges, and even though the state has a $8 billion deficit, he promised he would not raise taxes.

"We've been through this before, in 1995 we had a $5-billion deficit," said Pataki. "And we not only did not raise taxes, we began the most sweeping tax-cut program in the history of this state."

After his victory last week, something strange happened -- the governor kept saying the same thing.

But in New York City the rosy outlook of the election season came to an abrupt and official end.

Two days after Election Day, Mayor Michael Bloomberg, who this summer said that new taxes would "drive businesses and people out of the city," proposed raising property taxes as high as 25 percent. The average New York City homeowner would pay roughly $475 more a year, and rents -- even for those who live in rent-controlled or rent-stabilized apartments -- would go up. (Read Gotham Gazettes' Finance Topic Page for more on the mayor's proposal.)

The mayor has also:

  • told all city agencies to make additional cuts,
  • has begun trimming the city workforce,
  • and is considering a seven-dollar toll on four East River bridges.

New York City is facing what City Council Speaker Gifford Miller calls "the worst fiscal crisis in the city's history." Having "found" $4 billion to close this year, the city must find an additional $1 billion, and another $5 billion next year.

With all of the budget rhetoric at City Hall, it is hard to comprehend a number like $5 billion.

To put it in perspective: If the city cut all of its youth programs, closed all its senior citizen centers, and abandoned all of its parks, all of that together would only save about $400 million. The New York City Council says the answer is for Albany to bring back the commuter tax, but that would only bring in about $500 million a year. Even if the mayor raised property taxes 25 percent, that would only fill about half of the city's deficit. Put all three together -- the politically impossible cuts, the nearly as politically impossible restitution of the commuter tax, and the likely hike in the property tax -- and the city would still need to find way more than another billion dollars.

So how will the city get its budget to add up?


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

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