NYC to Cut $1.6 Billion to Close Deficit After Blocked Taxi Sale
New York Mayor Michael Bloomberg has modified the city’s $69 billion budget with $1.6 billion in spending cuts over the next 18 months to close a current $635 million deficit created when a court stopped the city from selling additional taxi medallions.
About $600 million of the spending reductions, dated Nov. 9 by the Office of Management and the Budget and announced today by the mayor’s office, plus $68 million in higher-than- previously-forecast revenue, will make up for the lost taxi medallion sales and balance the current budget. For 2014, $1 billion in trimmed spending plus $425 million in taxi-sales revenue will shrink the deficit to about $1.15 billion from the $2.5 billion forecast when the plan passed in June. The city’s fiscal year runs from July 1 to June 30 each year.
Bloomberg assumes that an appeals judge will reverse an August lower court ruling blocking the sales. Supreme Court Justice Arthur F. Engoron declared the medallion sale unconstitutional, saying the mayor should have received approval from the City Council, not the state Legislature.
The budget for fiscal year 2014 anticipates $790 million in taxi medallion revenue, $365 million already included in the budget passed last June and $425 million moved from fiscal year 2013 into fiscal year 2014. It also anticipates $68 million more in tax revenue in the current fiscal year than had been forecast last June.
Efforts to recover from Hurricane Sandy won’t be affected by the agency spending cuts the mayor has ordered, his office said in an e-mail. The number of police officers and firefighters will remain the same, and the city intends to increase the Sanitation Department by at least 100 workers within the next year, the mayor’s office said.
The city had planned to sell 2,000 medallions, adding to its fleet of about 13,000 cabs, and reap at least $1 billion in fiscal years 2013 and 2014 until Engoron blocked the sale with a court order. It now says it expects $790 million from such sales, in the event it wins its appeal of Engoron’s decision.
The medallion plan was part of a restructuring of taxi service that would have also added a new taxi service for residents of boroughs outside Manhattan.
State law requires the city to submit a balanced budget. The mayor will submit a preliminary plan for the 2014 fiscal year that begins July 1, 2013, by early February.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
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