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Call it "Gloomy." Call it a "Bad-News Budget." After initial word that 23,000 city jobs would be cut and the sales tax might go up, Mayor Bloomberg detailed how he plans to close the $4 billion budget gap the city faces next fiscal year. As the NY Times reports, there are four steps: "Reducing expenses by roughly $1 billion; receiving $1 billion from the federal government through more generous Medicaid reimbursements; securing $1 billion from unions and the state through pension reforms, health care contributions and other sources; and raising $894 million from an increase in the sales tax to 8.625 percent from 8.375 percent."
Here are some highlights:
- City tax revenue will "fall by 28 percent, or nearly $7 billion, in FY 2010 when compared to FY 2008 levels."
- The city expects almost 300,000 jobs (in all fields) to be lost by mid-2010.
- Cutting 1,000 jobs in the NYPD, eliminating twelve FDNY companies, increasing parking meter rates, cutting 549 ACS jobs.
- Having city employees kick in 10% for health care.
The Mayor parried suggestions that the wealthy be taxed more by saying, "My assumption is that the state will dramatically increase the personal income tax only because of the magnitude of what I think their problem is." The State Legislature and City Council will have to make decisions about the mayor's plan. Labor unions are already criticizing the mayor's suggestions for less generous pensions, though some labor heads acknowledged this was a starting point. Overall, Mayor Bloomberg said:
"Since November, when we updated the City's financial plan, economic conditions have continued to worsen, with tax revenues continuing to sharply decline. The tough decisions we made over the last year prevented the current deficit from being unmanageable and we now have a plan to close that deficit. We will do our part by cutting nearly another $1 billion in agency spending and the wise choices we made when the economy was booming have helped, allowing us to pay down billions of dollars in expenses for future years.You can read the budget publications here."But we can't close this deficit alone - we'll need help from partners in Albany and Washington and from our municipal unions, who must be part of the solution. If our partners won't do their part, and we will be forced to make even harder choices than we are making today. In the current economic climate, we have no choice but to act, while fiercely protecting the quality of life that keeps New York a city where people want to live and businesses want to locate and expand. More difficult times may lie ahead but time and again, our unity, spirit, and willingness to stay focused on improving this city for the next generation have brought us through every storm, of every kind."
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Well I guess the good news is real estate prices never, ever drop in the city.
# Having city employees kick in 10% for health care.
:(
Come on, Bloomie. How much are you worth again? Kick in a few billion for the city out of your own pockets and I assure you you can have that third term you so desperately want. Heck, as long as you keep paying, we'll even give you a fourth and a fifth...
It was just a few months ago Bloomberg ordered that all city agencies provide paperwork and translators for umpteen different languages. Another one of those expensive liberal feel-good measures. How about just doing official business in English and let the immigrants integrate finally?
Bloomberg made the city's revenue stream more reliant on the fortunes of Wall Street than other mayors. Bloomberg is supposed to be a "financial expert," yet the clear warning signs of a financial collapse appeared in The Economist back in 2004. A financial expert who doesn't read The Economist is not a financial expert. Remember, Bloomberg's riches came from a product, not from playing the market. Someone like Buffett is more of a market expert, and he's been saying to prepare for the worst for much longer than Bloomberg. Bloomberg should've known better, and should've properly planned for this back in his first term. And now NYC is going to suffer for it.