Jan. 29 (Bloomberg) -- New York Mayor Michael Bloomberg presented a $70.1 billion preliminary budget that contains no new taxes and limits spending as billions of dollars remain tied up in disputes over state aid, taxi revenue and labor contracts.
As many as 1,800 of 75,000 teaching positions may be cut through attrition in the next two school years if the state and federal governments withhold $1.7 billion in aid as a penalty for the city’s failure to agree with its teachers union on an evaluation plan, the mayor said.
The budget also assumes New York will reap $600 million selling 2,000 taxi medallions, down from a November estimate of $790 million. The transaction may be delayed and possibly blocked by taxi industry lawsuits, the mayor said.
“Our growth in our expenses has roughly mirrored our growth in tax revenues, and that’s what you would want to have happen,” the mayor said today as he unveiled his 12th and final preliminary spending plan at City Hall. “The more you make this city livable and desirable, the more money’s going to come in.”
Bloomberg’s cuts to the schools, announced yesterday in a meeting with state lawmakers, are already opposed by City Council members, who must pass a spending plan before the July 1 start of fiscal 2014. Bloomberg, 70, who is serving his third four-year term, is barred by law from running for re-election. His successor will assume office Jan. 1.
“This council has a clear record of preventing layoffs and preventing excessive attrition of front-line education staff, and this year is going to be no different,” said Council Speaker Christine Quinn, 46, a Manhattan Democrat seeking her party’s mayoral nomination, at a City Hall news briefing yesterday.
The preliminary budget includes about $6.5 billion in recurring savings achieved through 12 rounds of spending cuts since 2007, Bloomberg said.
It reduces controllable spending on agency programs by $254 million, or 1.1 percent from the current fiscal year. So-called uncontrollable spending on fixed costs such as pensions, fringe benefits, health care, Medicaid and debt service would rise by $1.8 billion, or 6.8 percent, over fiscal 2013.
Bloomberg pointed to record tourism, more demand for public schools, improvements to parks and cultural institutions as examples of advances under his watch.
“We’ve done a lot,” he said. “You can always do more, but you can only fight so many battles at a time. We’ve gone through Sandy, we’ve gone through Irene, we’ve gone through a mortgage crisis, and yet with all of those things, the city’s budget is still in balance.”
Hurricane Sandy, which struck about 14 months after Tropical Storm Irene, caused more than $4.5 billion in expenses, including $1.4 billion in emergency services and $3.1 billion in property and infrastructure repairs. Those costs won’t affect the budget because of reimbursements from the Federal Emergency Management Agency, Bloomberg said.
The prospect of as much as $1.7 billion in lost state and federal aid out of the city’s $20 billion education program will go beyond the loss of teachers to include elimination of 700,000 hours of after-school programs and the loss of $67 million in school supplies, the mayor said.
“The suffering that we will go through is more than worth it to finally get an evaluation deal that will let us put only the best teachers in front of our kids,” Bloomberg said of the funds the city stands to lose. “There is nothing, nothing, we can do that is more important.”
Missing from the mayor’s spending plan are billions of dollars that the next mayor may need to pay raises to city employees, almost all of whom are working under expired contracts. That may leave Bloomberg’s successor with a deficit of more than $5 billion, including back pay, according to the Independent Budget Office, a nonpartisan publicly funded fiscal monitor.
The budget, which is balanced for 2014 in compliance with state law, forecasts a $2.4 billion deficit for fiscal 2015. The current budget is $70.4 billion.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
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