Results tagged “budgetdeficit”

As he suggested—and as everyone expected—Governor Paterson's deficit reduction plan was indeed grim: He proposed cutting a total of $5 billion from the budget over two years, $3 billion for this fiscal year and $2 billion from next. Paterson pleaded for the State Legislature to work with him, "During a time of uncommon difficulty, we need to work together for the common good and enact a consensus plan that helps us avoid the severe consequences faced by other states that failed to swiftly address their budget problems. This will mean hard and painful choices, but that is exactly the type of leadership New Yorkers deserve from their public officials."

Yesterday, Mayor Bloomberg and the City Council agreed on a $59.4 billion budget for the 2010 fiscal year. Besides agreeing on a 0.5% sales tax increase, the city will trim 2,000 (or 1,000) jobs, allow 16 firehouses to remain open, keep libraries open 6 days a week, and "spare 100 animals from being shipped out of the Bronx Zoo." The NY Times reports that Mayor Bloomberg and City Council Speaker hoped that the economy would perk up so next year's budget won't be as severe, but the Mayor added, "If our economy continues to stall, this may not be the last word on this year’s budget."

The MTA, which already has a $1.2 billion budget deficit (hence the doomsday fare hikes and service cuts), now says it's been hit with another $621 million shortfall. Why? Because of "the continuing decline in the real estate and dedicated taxes that support the MTA, all of which are economically sensitive." Oh, and also the "increasing unemployment and higher fares led the MTA to predict a 7.2% drop in usage of its facilities in 2009." All told, the re-forecast for 2008 says real estate taxes are down $336 million, fare/toll revenue is down $221 million and state dedicated taxes are down $113 million (there was a $49 million budget surplus). The MTA will have to find a way to make up this new shortfall as well, but MTA Chairman Dale Hemmerdinger said, "This is terrible news for the MTA, our customers and the regional economy, and the MTA Board will do everything in our power to protect the transit network. Without assistance from Albany, however, it will be extremely painful for everyone who relies on MTA services."

The bad news from the MTA doesn't stop: This time, MTA officials say that lower tax revenues—an "alarming sharp decline" as the NY Times puts it—may mean the MTA has to consider cutting service and raising fares .

Mayor Bloomberg will be giving his budget address later today and it won't be fun: Because of the economic climate, he's proposing to increase sales tax to 8.75% (and putting tax back on clothing under $110; the sales tax is currently 8.375%) in order to raise $900 million. Bloomberg is also proposing to cut 23,000 city jobs, cuts to capital projects and requiring employees to pay for some health care, according to the Daily News. These measures would fill the $4 billion gap and come on top of previously announced cuts.

      

Last night, hundreds people crowded a ballroom at the Hilton for the MTA's first public hearing on the proposed fare hikes and service cuts. Leona Adams, an 86-year-old, spoke out against raising Access-a-Ride fares 250% (or higher): "The medical field has extended our lives to whatever age we are...yet if we are not able to continue our active lives that Access-A-Ride allows, then we will become burdens to our family, the city, the state and the nation."

Governor Paterson introduced a budget, full of tax hikes and fees for things like regular soda, beer, movie tickets and online music downloads in addition to big cuts to education spending, to combat a $15.4 billion budget deficit this year and next. Many critics have argued that these taxes—aiming to raise $4 billion—are hitting regular people, and now Governor Paterson tells the NY Times the rich may be taxed.

Governor Paterson continued his series of bad news about state economy by predicting the deficit to grow to $47 billion by 2012, thanks to the falling financial markets and NY State's own overspending. And for next year alone, it will grow to $12.5 billion--the current deficit is $1.2 billion--and that number is basically double what his administration previously projected. Paterson hasn't made any decisions about how the state will deal with these escalating costs, but he did say yesterday, "When you're in that amount of trouble, everything is on the table, not because you want it to be, but because it's the only way to manage. It is a crisis, and a crisis means that everyone has to be accountable and everyone has to sacrifice."

A pilot program to keep subway stations cleaner on the No. 7 and L lines was a success, but transit officials are balking at the cost of implementing it citywide, which would be approximately $100 million. The test run increased the number of cleaners at all stations on two subway lines, providing round the clock service; an MTA analysis found that those stations had heavy litter just 10% of the time, down from 33% before the pilot program. But NYC Transit would have to hire an additional 1,575 cleaners and spend nearly $230,000 per hub to meet those standards, the Daily News reports. And $100 million is no small potatoes in a time when the MTA is facing a nearly $1 billion budget deficit and considering service cuts. [Photo cred.]

Get ready for primal screams across the region, if the MTA decides to cut subway, bus, and rail service as it faces its nearly $1 billion-deficit next year. The Daily News reports that MTA CFO Gary Dellaverson said the agency "recently told its divisions to detail ways to cut spending by about 4.5% in the event the economy deteriorates beyond the MTA's latest budget projections - or if city and state funding isn't increased to levels sought by the MTA."

Governor David Paterson's unusual televised Tuesday afternoon speech detailing the state budget's deficit and imploring lawmakers to head back to work* has been followed up with some specifics today. He says a 7% cut to state agency spending would save $630 million. Paterson also suggests an "immediate hard hiring freeze," and wants the Legislature to help find $1.2 billion in savings.

If you actually believed the recent fare hike would go toward service improvements on city subways and buses, the MTA has a bridge to sell you. Due to a slowdown in real estate tax revenues, the agency said yesterday that it would have to postpone any planned service improvements promised to come with the fare hike. Despite already projecting a decrease in tax revenue, the MTA fell $21 million short of its projections for the year, with the MTA's CFO Gary J. Dellaverson saying, "We took these tax projections down quite dramatically from last year, and they are quite dramatically underperforming."