Bloomberg Seeks $2B of NYC Budget Cuts
New York Mayor Michael Bloomberg’s administration asked agency heads to cut spending by $2 billion over the next 18 months and freeze hiring on concern that a slowing economy may reduce city revenue.
Commissioners were told to present plans by Oct. 18 to cut their budgets 2 percent to save $500 million through the June 30 end of the fiscal year, and by 6 percent through fiscal 2013 for another $1.5 billion, according to a statement from the mayor’s office. Budget Director Mark Page also called for a hiring freeze except in departments for health and safety, it said.
“We’re looking at extreme economic uncertainty, and state and federal governments that are likely to further cut funds they return to the city,” Caswell Holloway, deputy mayor for operations, said in the statement.
New York’s $66 billion financial plan for fiscal 2012 enacted in June predicted $5 billion deficits in each of the next two fiscal years.
Today’s directive is the 11th time since 2007 that the mayor ordered city agencies to reduce spending in anticipation of economic slowdowns and lower Wall Street profits. The efforts have trimmed more than $5 billion of yearly costs.
“We’ve preserved services essential to maintaining safety and quality of life to this point through prudent planning and a willingness to make the hard decisions, and we’ll do that again this year,” Holloway said.
Part of Budget Talks
John Liu, the city comptroller who’s said he may seek the Democratic mayoral nomination in 2013, said spending cuts have become part of the mayor’s budget negotiations over the years.
“It’s not even a different play from the play book,” Liu told reporters at City Hall. “This is part of the mayor’s process and our office will look at these numbers very carefully once we see what he’s actually proposing.”
Standard & Poor’s affirmed New York City’s AA general- obligation credit rating, its third-highest, on Sept. 23. It said the administration has “historically moved swiftly to address projected budget gaps.”
A general-obligation security maturing in December 2021 traded recently at a yield of 2.92 percent, according to data compiled by Bloomberg. That’s 65 basis points higher than an index of top-rated 10-year municipal yields and up from an average 58 basis points this year. A basis point is 0.01 percentage point.
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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