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Bloomberg Says Cuomo Budget Costs City $2.1 Billion

New York Mayor Michael Bloomberg told Albany lawmakers his city would lose about $2.1 billion and have to waste money on state-required spending formulas if legislators failed to change Governor Andrew Cuomo’s proposed budget.

The mayor’s analysis, which differed from that of Cuomo’s budget office, calculated a $1.4 billion cut to education aid, including about $800 million that Cuomo removed from former Governor David Paterson’s November financial plan. State Budget Director Robert Megna said the mayor’s view was “not realistic.”

Bloomberg, 68, also said that Cuomo’s plan singles out the city for a second straight year in denying it revenue-sharing funds, or unrestricted grants to municipalities. Paterson took the money from the city for this budget year and then allocated about $300 million in his proposal for the state’s next fiscal year, which starts April 1.

“It was a disgraceful gimmick last year when we were cut 100 percent, and our citizens are not going to let it become the ‘new normal’ in the state’s relationship with New York City,” the mayor said in testimony today in the state capital of Albany.

The city, for which the budget year begins July 1, would also have to absorb $361 million in social-service cuts, Bloomberg said.

City’s Deficit

The mayor, who endorsed Cuomo for governor last year, projected a $2.4 billion deficit in his budget of about $67 billion, not counting the state actions. Bloomberg intends to present his budget Feb. 17. He has announced plans to eliminate more than 10,000 of the city’s 300,000 workers, including about 6,000 through attrition.

Cuomo, a 53-year-old Democrat elected in November, this month released a $132.9 billion budget that cuts local school aid by 7.3 percent, or $1.5 billion, and Medicaid spending by about $3 billion.

Megna also served Paterson and drafted the November financial plan upon which Bloomberg said he relied. He rejected the mayor’s testimony, saying he should only calculate next year’s proposed aid amount in comparison with this year.

‘Not Realistic’

“Given the fiscal situation facing the city, state and nation, it was obviously not realistic to assume an increase,” Megna said. The city’s lack of state revenue-sharing aid shouldn’t be considered a loss because “there is no year-to- year reduction regarding this money,” he said.

Education aid to New York City is cut $579 million on a year-to-year basis, Megna said. While the city’s reduction in school aid would equal 2.7 percent of its education budget, the Cuomo budget cut education aid 2.9 percent statewide, he added. “We believe teacher layoffs should not be necessary,” he said.

Bloomberg said that although he accepts the state’s need to reduce spending to bridge a $10 billion gap, the governor and Legislature could reduce the impact of cuts on the city by letting him bargain with unions over new workers’ pension benefits.

“The time has also come to return to the city the ability to negotiate pensions as part of collective bargaining, just as we do with wages and benefits,” the mayor said. “The public says ‘spend less.’ But Albany forces us to ‘spend more.’”

State law will force the city to increase special-education spending 13 percent next year, including about $100 million in tuition to private schools for 4,000 students, he said.

“We can provide services to those students at a fraction of that cost,” Bloomberg said. “Otherwise, we’re going to be laying off teachers in our public schools” to make the tuition payments, he said.

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

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

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

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