New York City Freezes Hiring as It Seeks $2 Billion of Savings to Cut Gap
New York Mayor Michael Bloomberg ordered agencies to freeze hiring until they receive his approval for spending cuts totaling $2 billion during the next 21 months.
The directive comes as the mayor anticipates a $3.3 billion budget gap for the 2012 fiscal year that begins July 1. He told officials to seek savings of about $800 million in the remaining nine months of this fiscal year and $1.2 billion in 2012.
Although the city’s unemployment rate has declined seven months in a row and job growth has outpaced the U.S. and state, tax revenue is more than $4 billion below prerecession levels, forcing the cutbacks, Bloomberg said.
“Since almost 60 percent of city spending goes toward labor costs, including pension and health-care contributions, the city must immediately take steps to rein in spending,” he said in a letter today to agency heads.
Bloomberg said in the letter that he wants public-safety agencies and schools to cut spending 2.7 percent and all other agencies to trim 5.4 percent. The following year, the targets rise to 4 percent and 8 percent, respectively.
‘Bare Bones’
Positions immediately affecting public health and safety, and those that generate revenue, such as ticket writers and violation issuers, are unaffected by the freeze.
The hiring pause will last, the mayor said at a Manhattan news conference, “until we solve our budget problems, and that ain’t going to be short-term.”
Lillian Roberts, who represents 125,000 city workers as executive director of District Council 37 of the American Federation of State, County and Municipal Employees, said most agencies already contend with “bare-bones staffing.” The mayor “needs to put a freeze on outside contracts that prop up private consultants,” she said.
Budget Director Mark Page sent a separate letter today asking agency heads to submit cost-saving plans for the current and next fiscal years by Oct. 8. “Once the savings program is in place, we will review the necessity of maintaining the hiring freeze on an agency-by-agency basis,” Page wrote.
Closing Gaps
This is the ninth time in the past three-and-half years City Hall has requested plans to close budget gaps, according to Bloomberg.
On June 29, New York’s City Council approved a $63.1 billion budget for fiscal 2011, balanced mostly by carrying over a $3.6 billion surplus from fiscal 2010.
In July, Bloomberg announced plans to save as much as $500 million using shared computer networks, consolidated vehicle fleets, reduced office space and better collection of fines and taxes.
In June, Bloomberg projected deficits would rise to $4 billion in 2013 and $4.8 billion in 2014. He said then that the city would have to cut its payroll, possibly by hundreds. The city’s headcount was 302,436 in May, the most recent tally available, said mayoral spokesman Marc Lavorgna.
“It’s hard to see us continue with a workforce this size,” the mayor said.
New York City’s jobless rate stayed at 9.4 percent in August after seven consecutive monthly decreases, the state Department of Labor said on Sept. 16.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
-- Editors: Stephen Merelman, Stacie Servetah
To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.
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