Mayor Bloomberg Vows No New York City Tax Increase as He Confronts Deficit

New York Mayor Michael Bloomberg called for avoiding tax increases and raising some workers’ retirement age as he laid out steps to plug a deficit that may be about 7 percent of a projected $67.5 billion budget.

In his 10th annual State of the City address, the mayor called on the state Legislature to give the city control over pension benefits. He promised to improve on efforts that he said produced a 35 percent drop in crime since 2002, about 51,000 private-industry jobs last year, record tourist visits, and rising school-test scores and graduation rates.

The mayor, 68, enters the second year of his third term facing a $2.4 billion deficit, not counting at least $2 billion in state aid, which the city expects to lose, for education and health care.

“A new defining challenge confronts us: forcing government to live within its means,” Bloomberg said in his speech, which lasted about 45 minutes. “The city’s economic future is hanging in the balance.”

He asked the Legislature to allow the city to negotiate pension benefits with unions and create a tier that would raise the retirement age to 65, from 62, for future non-uniformed employees. The city could save $200 million if it stopped annual “holiday bonuses” to uniformed workers, he said.

‘Billions in Benefits’

Pat Lynch, president of the Patrolmen’s Benevolent Association, said police officers paid for the benefit with more than $1 billion in past surplus pension earnings and $75 million upfront.

“Having realized billions in benefits, the city now wants to renege,” he said in a statement. “We intend to hold them to it.”

Bloomberg has a 37 percent job-approval rating, his lowest ever, according to a Jan. 6 Marist College poll. His prior low was 40 percent in April 2004, according to Lee Miringoff, director of the Marist College Institute for Public Opinion in Poughkeepsie, New York. The survey reflected more than just anger about unplowed streets after a late-December blizzard, Miringoff said.

Most New Yorkers didn’t approve of the appointment of Cathie Black, former chairman of Hearst magazines, as schools chancellor, Miringoff said. Criminal charges against six information-technology contractors accused of stealing $80 million from the city also hurt, he said.

‘Keep the Focus’

“He’s got to re-establish a sense of what the direction is,” Miringoff said in an interview. “When you’re in the third term it’s more difficult to keep the focus.”

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

While it still faces risks, “for the first time in decades New York City entered a national recession later than the rest of the country, and now we have come out of it faster and stronger than the rest of the country,” Bloomberg said.

The city’s jobless rate was 9.1 percent in November on a seasonally adjusted basis, compared with 9.8 percent nationwide.

The mayor said the city had surpassed Boston in venture- capital funding for technology, placing it ahead of every locale except California’s Silicon Valley.

New York’s “number one priority” will be advocating legal changes to pensions, including laws giving it power to negotiate benefits with workers, the mayor said. Pensions will cost $7 billion this year, up from $1.5 billion in 2001, he said. He also called on the state to let the city control its civil service, tax collections and procurement costs.

Pension Plans

New York could save $8 million a year by consolidating its five pension funds into one system, he said. A new tier raising the retirement age for non-uniformed employees to 65 from 62 would save “billions,”, he said.

“I will not sign a contract with salary increases unless they are accompanied by reforms in benefit packages,” he said.

“The city’s budget crisis is not the fault of municipal workers and their benefits,” said Lillian Roberts, executive director of District Council 37 of the American Federation of State, County and Municipal Employees. “The fault lies with the massive fraud and recklessness of Wall Street and the loss of municipal revenue as the financial sector nearly collapsed.”

City workers’ pensions average $17,000 annually, she said.

Business Support

“The business community supports this agenda and will join the mayor in efforts to ensure that Albany does not balance the state budget on the backs of the city’s taxpayers,” said Kathryn Wylde, president of the Partnership for New York City, a group of corporate executives.

When the budget requires the city to cut teachers, the Legislature should allow it to retain them based on classroom performance, not seniority, Bloomberg said.

“State law says that the last ones to be hired -- no matter how good they are -- must be the first ones to go,” Bloomberg said. “We’ve got to change the law.”

The mayor spoke inside Staten Island’s 81-year-old St. George Theatre, which had been vacant for 30 years before community residents raised funds to renovate it.

The venue’s transformation from “a decrepit old movie house into this spectacular new theater -- spurring new jobs and economic opportunities” symbolizes what he’d like to see for New York, the mayor said.

To contact the reporter on this story: Henry Goldman in New York City Hall at hgoldman@loomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.