NYC Business-Tax Gain Won’t Stop Budget Cuts, Mayor Boomberg’s Aides Say

May 6, 2011

New York City business-tax revenue gains won't prevent service cuts in the 2012 budget forced by reduced federal and state funds, aides to Mayor Michael Bloomberg said.

Company-tax income will reach $5.75 billion in the fiscal year beginning July 1, exceeding the $5.41 billion during the 2008 financial crisis, the administration officials said in an e-mail with details of the budget the mayor will present to the City Council today.

"The cuts are driven by the costs to provide the same service increasing, while state and federal support have not kept pace with needs," said the e-mail, provided by the aides yesterday on condition their names be withheld. "Those blaming Wall Street for cuts aren't focusing on the actual problem."

Today's executive budget must be balanced and approved by the council by the start of the fiscal year. The mayor proposed a $65.6 billion preliminary plan in February that cut 6,166 of the city's 75,000 teaching positions, including 4,666 by dismissals, and reduced spending for senior centers, libraries, and police and fire personnel.

The mayor will blame lower state and federal aid for cuts in city personnel and programs, the officials said. If the budget contained the same percentage of state and federal contributions as in 2002, New York would have received $6.1 billion more than it will in 2012, according to the e-mail.

"Albany and Washington continue to face serious challenges, and their cuts are real and will have a serious impact on our budget," Deputy Mayor Howard Wolfson said in a statement provided by the aides.

Restoring Cuts

Council members have worked to modify some of the cuts proposed in the preliminary budget. Councilman Dominic Recchia, a Brooklyn Democrat who heads the Finance Committee, said in a May 3 interview the city could retain more teachers if it ended some contracts with outside education consultants and negotiated savings with unions.

Council members have also objected to reductions in the police department. The mayor's preliminary budget would bring the uniformed force down to 34,413 by June 30, 2012, the lowest since 1992, from a peak of about 40,000 in 2002, Recchia said.

Police Commissioner Raymond Kelly said in an interview yesterday that he expects the department to total about 1,000 more than that next year, with a class of at least 1,200 rookies enrolling in the police academy in July.

"Nothing is set in stone and circumstances could change," Kelly said. "But our expectation, taking into account the rate of attrition, is to have a force of about 35,400."

Class Funds Restored

The mayor agreed to restore funds for a class of about 1,400 recruits who will begin at the police academy in July, Jamie McShane, a spokesman for council Speaker Christine Quinn, said by e-mail. He said Quinn and Recchia persuaded the administration that the additional officers were needed.

"We are grateful that the city council recognizes that government's first responsibility is to protect its citizens," Patrick J. Lynch, president of the Patrolmen's Benevolent Association, a police union, said in a statement. "We simply cannot fight traditional crime, maintain order and guard against terrorist acts without adequate staffing."

The mayor also proposed to eliminate 16,000 child-care slots in his February budget. Today, he'll ensure spaces are available for every child currently enrolled, at a cost of about $40 million, the e-mail said. The cuts had been contemplated because of lost federal funding and increased costs, the officials said.

"I'm hoping he restores everything," Recchia said. "There are many ways we can work this out."

The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

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To contact the editor responsible for this story: Mark Tannenbaum at