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NYC Mayor’s $63 Billion Budget May Cut 11,000 Jobs

May 6 (Bloomberg) -- New York Mayor Michael Bloomberg presented a $62.9 billion budget for fiscal 2011 that eliminates 11,000 positions, or 3.6 percent of the city’s workforce, in light of a $1.3 billion potential loss of state aid.

Proposing no new taxes for the year that begins July 1, Bloomberg said the city may fire 4,419 of its 80,000 teachers and eliminate about 2,000 more through attrition. The largest U.S. city by population would retain 892 police jobs that had been targeted in January for elimination.

New York City, which relied on Wall Street for 12 percent of its 2007 revenue, remains handicapped by lost jobs in the financial industry, Bloomberg said. The budget process has been complicated by lack of agreement between Governor David Paterson and the Legislature on a spending plan for the state’s fiscal year, which began April 1.

“Our ability to put together a balanced budget is very seriously hampered by state government’s continued inaction in addressing its own budget problems,” the mayor said in a press conference today.

The stalemate in Albany may force school officials to send termination notices to hundreds of teachers as early as June without knowing how many the city may be able to retain, Schools Chancellor Joel Klein said. Those last hired will be the first fired in accord with state law, Klein said.

‘There Will Be Layoffs’

While more money from Albany or the federal government may prevent some job losses, “our best prediction is there will be layoffs,” he said.

State law and the city charter require the City Council to approve, and the mayor to sign, a balanced budget by June 30. While the coming year’s plan is balanced, rising costs of debt-service, pension liabilities and health care will create deficits of $3.8 billion in 2012 and $4.6 billion the following year, Bloomberg said.

The city doesn’t expect revenue to return to its 2008 record of $43.9 billion until 2012, when budget officials predict it will total $45 billion. In the past three years, the mayor said, the city has reduced agency spending eight times.

Although the city “has done a conscientious job of confronting our own very formidable fiscal challenges,” Paterson and the Legislature “failed to anticipate the crisis and failed to take similar steps to tighten its own belt, and we face a terrible price for Albany’s irresponsibility,” the mayor said.

State ‘Scapegoat’

State Budget Director Robert Megna said the mayor was using the state “as a scapegoat to shirk responsibility for their own budget choices.” He said he questioned “whether many of New York City’s proposed cuts will ultimately be necessary.”

The mayor’s budget, Megna said in an e-mailed statement, “uses selective accounting to vastly overstate the local financial impact of the state’s executive budget” and “appears to vastly understate the positive benefit of the additional federal Medicaid funding it expects.”

Megna’s comment was “the most outrageous thing he could say,” Bloomberg said. The city budget used figures based on the governor’s latest statement, he said. Lawmakers in Albany tell city officials to expect different amounts, “and the numbers keep changing from week to week,” the mayor said.

While schools would bear more than half of the proposed personnel cuts, the fire department would lose about 400 of its 11,300 positions, resulting in the elimination of about 20 engine companies.

Fire Union

The Uniformed Fire Officers Association, representing about 2,500 lieutenants, captains, battalion chiefs and other supervisors, “will fight the elimination of even one engine company,” union President Alexander Hagan said. “At stake is the lives and property of every citizen in every neighborhood.”

Under the plan, 50 senior centers and four city pools would close, library hours would be shortened and services to the aged, homeless, abused children and poor would be reduced, Bloomberg said.

Any raises would be conditioned upon unions agreeing to pay more for their health care and approving a separate pension tier for new hires with reduced retirement benefits, the mayor said.

Teachers, principals and managers would be asked to accept a 2 percent increase on their first $70,000 in pay, instead of their previous 4 percent, which Bloomberg said would save a total of almost $1 billion through 2013.

‘Prudent Approach’

Bloomberg’s proposed budget is “a prudent approach to addressing the city’s fragile economic condition and the uncertainties of future state aid reductions,” said Carol Kellerman, president of the Citizens Budget Commission, a non-partisan business-funded fiscal monitoring group. The 11,000-worker reduction “is an unfortunate but appropriate response to the new fiscal realities,” she said.

The mayor should make an effort to minimize teacher layoffs amid rising class sizes and the dismantling of fire companies, City Comptroller John Liu said in an e-mailed statement. Bloomberg is “doing the right thing” in not shrinking the police force further, he said.

The city’s five-year, $46 billion capital plan, including $11.8 billion in school construction, $8.8 billion for environmental protection and $6.1 billion for bridges and highways, will cost $4.9 billion in debt service, a 6.5 percent increase compared with last year, the budget office 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

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

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