Bloomberg Reaches Deal With NYC Council on $68.5 Billion Budget

Bloomberg Reaches Deal With NYC Council on $68.5 Billion Budget
Michael Bloomberg, mayor of New York City, right, and Christine Quinn, City Council speaker, shake hands at a City Hall news briefing. Photographer: Henry Goldman/Bloomberg

An agreement between New York Mayor Michael Bloomberg and the City Council on a $68.5 billion budget will provide day-care and after-school programs for 107,000 children, and saves Fire Department units from closure.

The budget agreement for the most populous U.S. city doesn’t raise taxes and came just five days before the June 30 deadline that marks the end of the 2012 fiscal year. In the plan, Bloomberg, 70, and the council restored $150 million the mayor cut from child-care and after-school programs and millions more to operate 20 fire-engine and ladder companies.

“We just made it a priority,” Bloomberg said yesterday when asked during a City Hall news briefing where he found the money to restore the threatened programs. Council Speaker Christine Quinn, 45, had called the cuts unacceptable, saying they would remove more than 36,000 youngsters from programs.

Bloomberg, an independent, and Quinn, a Manhattan Democrat, joined by members of their negotiating teams, gathered in City Hall to announce their seventh straight on-time budget since 2006. That year, Quinn became leader of the 51-member council. For Bloomberg, passage of the deal will mark the 11th consecutive time he has met a state-imposed budget deadline.

“With this budget all of us in City Hall have made clear that the children of New York City are our No. 1 priority,” Quinn said. “We’re saying that child care can and must be the beginning of a lifetime of learning.”

Library Funding

The budget deal also restored $90 million that had been cut from libraries, bringing total funding up to about $300 million, and permitting some to remain open six days a week, the mayor said. Cultural institutions will get an additional $50 million, to $150 million, which the mayor described as “slightly above” current levels.

The agreement also saved 650 education workers from dismissal, including 400 teacher-aides. Money to save the jobs came from an agreement with District Council 37 of the American Federation of State, County and Municipal Employees to accept less pay and work a half-hour less each day; the city Education Department provided about $8 million in savings; and the City Council used $3 million in discretionary funds, said Justin Goodman, a council spokesman. He said $59 million was restored to Fire Department funding.

Bloomberg is barred by the city’s term-limits law from seeking re-election in 2013. Quinn is one of at least five Democrats who have expressed interest in running for mayor in a primary election next year. Registered Democrats outnumber Republicans by more than 5-to-1 in the city.

Improving Revenue

The budget reflects improved revenue from economically sensitive taxes on income, sales, real estate and business.

“While revenues from the financial sector have declined, tax revenues have been bolstered by strong growth in the tech, film and television, tourism and higher education sectors, areas where the administration has focused its economic-development initiatives,” Bloomberg said.

The mayor balanced the 2013 budget with about $1.5 billion in cost savings from agency spending cuts in 2012 and 2013, and $4 billion in nonrecurring sources of revenue, including $635 million he expects from the sale of 2,000 additional taxi medallions, or licenses to operate cabs. The sale has been delayed by legal challenges from medallion owners.

Other one-time sources of funds include $1.6 billion of surpluses from prior years, and $1 billion from a Retiree Health Benefits Trust set up several years earlier to pay for future employees’ health-care needs.

Debt Ratings

New money and savings measures since the mayor first proposed his budget in May include $240 million from reduced debt-service payments by taking advantage of low interest rates on municipal bonds in the current and next fiscal years. The city’s general-obligation debt is graded AA by Fitch Ratings and Standard & Poor’s, and Aa2 by Moody’s Investors Service, the third highest level for all three.

The spending plan estimates that in fiscal 2014, the city will need to close a $2.5 billion deficit, or about 3 percent of a projected $72.4 billion budget.

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

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