Mayor Michael Bloomberg unveiled his $59.1 billion budget proposal last week that leaves city spending at nearly the same level it was last year and continues $400 property tax rebates as well as a 7 percent property tax cut to homeowners.
"Through a combination of agency savings and short-term revenue receipts, we will once again return tax dollars to New Yorkers who today face their own budget problems created by the subprime mortgage meltdown and the ensuing credit crunch," Bloomberg said in a statement.
The tax relief will be made feasible, Bloomberg said, because he is proposing keeping spending virtually unchanged from last year the mayor is suggesting a 0.1 percent increase and higher-than-projected revenues are coming into the city.
Instead of using the higher revenues to increase spending in the budget this year, Bloomberg said, his plan keeps those funds to help close projected budget deficits in 2010 and 2011.
Bloomberg cited a number of economic indicators that show rough times ahead for the city.
In his budget presentation released May 1, the mayor said firms on the New York Stock Exchange reported a $16 billion loss in the fourth quarter of 2007 the largest ever red ink figure. He said the financial industry is expected to cut 25,000 jobs in the next two years.
The city relies heavily on Wall Street profits and salaries to boost its budget.
Bloomberg said forecasts show about 90,000 jobs will be cut between the second quarter of 2008 and the second quarter of 2009.
The proposal comes a month after the state passed a $121.7 billion budget that increased spending by about 5 percent and boosted education funding by $644 million over last year.
Gov. David Paterson said last week that the state is projecting a $5 billion deficit in the next fiscal year.
"While this year's budget is balanced, we face some very significant challenges ahead to get our fiscal house in order," Paterson said. "With a $5 billion deficit looming next year, we must immediately begin taking steps to rein in government spending."
The mayor's plan is subject to negotiations with the City Council, which can make changes to the proposal.
Reach reporter Howard Koplowitz by e-mail at firstname.lastname@example.org or by phone at 718-229-0300, Ext. 173.
©2008 Community News Group
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