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Mayor Bloomberg to Outline Cuts in Budget Speech

By Jill Colvin | February 2, 2012 6:58am
Mayor Michael Bloomberg will deliver his preliminary budget report at City Hall Thursday.
Mayor Michael Bloomberg will deliver his preliminary budget report at City Hall Thursday.
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Richard Drew/AP

CITY HALL — Facing a multi-billion dollar budget gap, Mayor Michael Bloomberg is expected to announce another round of cuts Thursday when he presents his preliminary financial plan for the coming fiscal year.

Aides to the mayor declined to disclose details ahead of the unusually well-guarded announcement, except to promise a balanced budget with no new taxes for 2013.  

"The budget will remain balanced without any tax increases because we budgeted with foresight — saving resources when we could and holding down spending while maintaining city services at or near record levels,” said Marc LaVorgna, a spokesman for the mayor.

The city was already facing a $2 billion shortfall in November, even after tallying $1 billion in new revenue from the sale of 2,000 new taxi medallions and putting up $1 billion in cash from a health care trust fund, which will be bankrupt by the end of Bloomberg’s third term.

But City Councilman Domenic Recchia, chairman of the council’s Finance Committee, said the city is now facing an additional $1 billion shortfall as the rate of return for the city’s pension investment is dropped from 8 percent to 7 percent — "a more realistic expectation" that is in line with other cities, he said.

The city’s pension costs have increased to $8 billion this year, up from $1.5 billion when Bloomberg took office, the mayor has said.

Behind the scenes, council staffers were bracing for another round of cuts to city services.

"HASA’s [HIV/AIDS Services Administration] going to be a problem, child care’s going to be a problem," said one council source, who said that all of the proposed cuts that were restored over months of heated negotiations last year will likely once again be on the chopping block.

The most recent budget projection, issued in November before the pension adjustment, called for deep cuts to the uniformed services, including the police and fire departments, the Department of Homeless Services and the Department of Health, which was then expected to lose 41 staffers through layoffs and another 79 through attrition in the 2013 fiscal year.

The Department of Transportation was also expected to be cut, with 112 workers lost, including 60 through layoffs, in addition to 200 uniformed sanitation workers and 137 Parks Department workers to be lost through attrition.

The city's Independent Budget Office, however, has said the situation isn't as dire as the mayor's office thinks, thanks to higher tax revenues and lower unemployment numbers.

Unlike last year, when Bloomberg threatened to lay off thousands of teachers, Schools Chancellor Dennis Walcott has said repeatedly he does not expect significant staffing cuts at schools and has looked for other ways to save.

But Recchia said he does expect fire house closures to be back on the table — something the council has repeatedly fought to reverse.

"We have to think about core services," said Recchia, who will receive a formal briefing on the plan, along with fellow council members, ahead of the speech.

City Council Speaker Christine Quinn, a probable mayoral candidate, said Wednesday she had high hopes this budget season wouldn't be as contentious as years past, when the mayor threatened to lay off thousands of teachers and shutter senior centers.

"I’m hoping it’s perfect, chocked full of a lot of money and not a lot of cuts and you know, everything’s great," she said. "But seriously, I hope it’s better than the budgets have been recently.

"I certainly hope we don't see the proposal of teacher layoffs again, which I don't think we will. I'd be very happy if we didn't have to battle firehouse closures," she said.

The mayor's announcement typically kicks off a long budget season marked with numerous rallies and hearings. The council and mayor must agree on a final plan by the end of June.