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April 17th, 2003, 07:32 AM

April 17th, 2003, 08:36 AM
April 17, 2003
A City on the Ropes

Nineteen months after Sept. 11 there's still a gaping hole in the heart of Lower Manhattan, and New York City over all is still hurting.

Instead of moving forward, the city is going backward.

This is not obvious. When the weather is nice, as it was yesterday, you get a real sense of the city's vibrancy. Just step outside and start walking and the throngs will carry you through New York's myriad currents. You'll have to detour around construction sites, and dodge a suddenly accelerating cab or a belligerent bus or two. But there'll be theaters and museums along the way, and the world's greatest restaurants, and Central Park and the Bronx Zoo, and riverfronts and oceanfronts, and an endless array of proud neighborhoods squeezed shoulder to shoulder in the miraculously constrained chaos that constitutes the world's greatest city.

Still, it's a city in trouble.

So there was Mayor Michael Bloomberg at City Hall on Tuesday somberly explaining a budget plan that will throw thousands of city employees out of work and result in a sharp reduction in services. That's being touted as the best-case scenario, which gives you a sense of how rough a situation the city is in. New York's a tough town, but right now it's like a boxer who has been battered for several rounds and can no longer ward off the punches of his opponent. He has no choice but to absorb the blows and hope he doesn't get knocked out.

The mayor has a backup plan, a "doomsday" budget that will go into effect if he does not get the considerable help he says he needs from the state and the municipal unions. In that plan the city gets knocked out.

The governor of New York is George Pataki, a man who is quite capable, if it would serve his purposes, of looking at his watch and telling you it's high noon when in fact it's midnight. If Mr. Pataki is aware of how dire the budget situation is in New York City, he hasn't let on. All he does is mumble about his opposition to "job-killing tax increases."

As both the city and the state sink ever more deeply into fiscal quicksand, it's become clear to most sentient observers that broad-based tax increases of some kind will be necessary to ward off a real disaster. But Mr. Pataki, perhaps distracted by a desire to land a position with the fanatically antitax Bush administration, is not there yet.

Mayor Bloomberg is taking the crisis seriously. He's already pushed through a record increase in the property tax and is imposing billions of dollars' worth of budget cuts.

"There are no good answers," he said. He's asked Albany for a tax on commuters who work in the city and additional state aid. He is also seeking substantial concessions from the municipal unions.

Mr. Bloomberg acknowledged that the city "is having a tough time even maintaining its services," and he said there is a point at which further cuts are simply intolerable. His doomsday budget is frightening. Ten thousand municipal workers would be axed. Up to 40 firehouses would be closed. Sanitation services would deteriorate and municipal pools would be shut down. After-school programs would be eliminated. The police force would be reduced to dangerously low levels. Libraries would close and services for the desperately needy, including the hungry and the homeless, would be further curtailed. The city would be flirting with the kind of environment that almost led to its ruin in the 1970's.

New York City is the glittering jewel of American municipalities. It was attacked by a foreign enemy on Sept. 11, 2001, and it has suffered since then, as have other cities and states, from the effects of a bad economy and dreadful fiscal policies in Washington.

Eventually some help will come from Albany, but it won't be nearly enough and the deterioration of this splendid city will continue. Mr. Pataki's intransigence in the face of a genuine crisis is symptomatic of the reluctance of conservative officeholders to invest in the crucial services that help individuals, and thus a nation, to thrive.

Next year the Republican Party will hold its national convention in New York City, and it will go out of its way to exploit the powerful emotions evoked by ground zero and the memories of Sept. 11. The mayor of New York City, the governor of New York State and the president of the United States are all Republicans.

With that lineup you'd think this city, after all it's been through, could get a break. *

Copyright 2003 The New York Times Company

April 17th, 2003, 09:27 AM
With all due respect for other places, NYC is the most important city in America. While the alert colors fluctuate nationally, and Montana gets an inordinate amount of Homeland Defense funding to protect wheatfields; we stay at Condition Orange, along with all its expenses.

Bush is still pushing tax cuts.

April 18th, 2003, 10:10 AM
April 18, 2003
Once Just Threats, Cutbacks Sink in Among New Yorkers

For many New Yorkers, the budget blues have come on slowly, like a bad, unkickable cold that finally becomes a miserable sinus infection. A street on Staten Island looks a bit dirtier; an Upper West Side subway station seems to have a few more homeless people.

It is as if people are already starting to see their city crumble ever so slightly even when statistics defy their perceptions because they finally believe government when it says that it is out of money. The mayor's budget, which he released on Tuesday, portrays a city where firehouses would close, where teachers would lose their classroom assistants and where there would be far fewer places to take children come next summer.

Hearing about the privation on the horizon, many people seem to think it has already arrived, and they are starting to debate in earnest how the city's fiscal problem should be solved.

"There were predictions of these things a year ago," said Lee Goldman, 75, who lives in Brooklyn Heights. "But it seems to have become stronger. I have a sense that there has been a decline in services, especially in safety. From what I hear, the public schools are terrible. I guess I need to listen more."

Wade Golden, who worked as a florist in the World Trade Center and has been unemployed since Sept. 11, may have an exaggerated view of the facts, but a not untypical sense of doom. "You're playing with people's lives right now," Mr. Golden said of Mayor Michael R. Bloomberg's latest budget plans. "By closing down the Fire Department, people are being affected," he said at the Fulton Mall in Brooklyn. "This is their lives."

News of the city's dire fiscal problems has not been secret. Since the day he took office, Mr. Bloomberg has warned about massive budget gaps, impending cuts, shared sacrifices.

But back then, there was a governor running for re-election who skirted the budget story. Then there were whispers on Wall Street and in Washington that a recovery might be just around the corner. And the budget process was always confusing: onerous cuts would be proposed by the mayor, rejected by the City Council and sometimes patched up with "electricity savings" and other mysterious pots of money.

"They have been through this so many times," said Ted Kanabis, who had stopped in for lunch yesterday at the Stein Senior Center on East 24th Street, where he is a client and a part-time worker. "There was talk about cutting the senior centers from five days to four, and that was back in January that there was talk of that and people got upset."

Now, however, there is an amplified debate between Albany and City Hall over how to get the city out of its financial distress. Falling tax revenue means that service cuts are a given. Pink slips have already gone out to scores of city workers, and no one talks anymore about an imminent economic recovery.

The news is no longer about what will be saved, but rather how deep the cuts will be. "This is the first time I can remember in a long time it's been so bad," said Brenda Hill, an outreach worker for a private nonprofit group. "This is scary. So many people are losing their jobs."

Simply put, the debate between Mayor Bloomberg and Gov. George E. Pataki over a proposed $1.4 billion tax on commuters pits a mayor who wants to spare New York City residents some of the cost of city services against a governor who simply abhors taxes.

But the disagreement is much broader. Mr. Bloomberg, a newly minted Republican and former businessman, believes that businesses and people leave a city when its services fall into disrepair, as they did in the 1970's. Mr. Pataki embraces the notion that taxes are what drive companies and residents away.

Dee Das, 19, a salesman at Go Jays, a kiosk that sells cellphones in the Staten Island Mall, sided with Mr. Bloomberg yesterday, though a bit reluctantly.

"This is the slowest month ever," he said. "People are scared of losing their jobs. No one feels secure. Cutting back on police and fire isn't good. People won't feel safe anymore. It's better to raise taxes. Not very high maybe by 2 percent."

John O'Mahoney, 59, a retired police officer, had a slightly different view. "I think Bloomberg is going about this the wrong way," he said as he waited for his grandchildren to finish riding the Easter train at the mall. "He should tax businesses, not the communities. Let them pay their fair share. We just got a big property tax increase. Why should the middle class always pay the brunt of the tax burden in New York City?"

Either way, it is clear that people are starting to believe that oppressive service cuts are on the way.

Carmine Gallo, 51, a special education teacher who lives on Staten Island, said the cuts to city agencies he had heard about in the past were things he could live with. Now, he is not so sure. "We're talking, when you have to go throw your garbage out, or when you want a cop and he doesn't get there for 20 minutes," said Mr. Gallo. "We want our firefighters. We need these policemen on the streets."

Proposed cuts to education which is slated for a 2 percent reduction in the 2004 fiscal year budget seemed to upset many New Yorkers. And many of them seemed to believe the message that is subtly coming out of City Hall, that part of New York City's burden could be eased by the governor.

"I blame Bloomberg up to a point," said Mary Ann Carola, 56, who works at Public School 56 on Staten Island. "But he has to balance the budget. I blame Pataki more. There was federal funding given to the Board of Ed. Why don't they take that money and save jobs and do better for the children?"

Mrs. Goldman, the Brooklynite, said she was just starting to piece together what is happening from bits and pieces on television and the radio. "I think the governor should be interested in New York City, but from what I hear on television, he seems not to be."

But if people had much to say about how they might suffer as a result of the cuts, they had few ideas on how to patch the holes in the budget.

"I know that we will give up on garbage; that has been given up before," said Beth Linskey, who splits her time between the Upper West Side and Columbia County, N.Y., where she produces jams for sale.

What should go? She could not say. "We certainly have had less park maintenance before, and we survived. And it's wonderful that we've had such gorgeous parks. And maybe we shouldn't really give up the swimming pools that are open all the time, because that keeps crime down during the summer by giving kids a lot to do, so those are areas that you shouldn't cut right away."

"I mean, that's a tough one."

Copyright 2003 The New York Times Company

May 17th, 2003, 08:49 AM
May 17, 2003

The Art in Budget Cutting

The depth of the city's fiscal crisis, with its $3.8 billion hole, means nothing is untouchable, no cuts unthinkable. Mayor Michael Bloomberg has tried to do the right thing by protecting the fundamentals: education, health, safety and sanitation. But even these are vulnerable. Among the thousands laid off over the next few months will be hundreds of teachers' aides and dozens of fire marshals. Nearly half of the city-supported children's health clinics will close. There will be fewer police officers enforcing quality-of-life laws. Trash collections in the outer boroughs will become less frequent, just in time for the hottest days of the year.

This is a three-hankie budget, with something to make almost everyone cry. In such a bleak picture, there is little justification for keeping firehouses open just because they have been community fixtures. And, sad to say, the city does not really need to keep open small zoos in Brooklyn and Queens, much as some residents love them.

But the mayor may want to take a second look at proposed cuts in some useful and cost-efficient social programs, like funds to help keep low-income families together instead of sending children into foster care, which costs a lot more. The proposed cuts in the budgets of the parks, libraries and cultural institutions that help make New York the place it is may also merit review. The cuts would eliminate many workers who keep up park grounds and restrooms, threatening a return to the bad old days when green spaces were dirty and dangerous. The 34 members of the Cultural Institutions Group, which includes some of the city's largest and most visited sites like the Metropolitan Museum of Art, the New York Botanical Garden and the Brooklyn Academy of Music will lose $25 million in operating funds. That translates into layoffs, canceled programs and lost revenue.

Mr. Bloomberg suggests that cultural institutions compensate by passing the hat. To his great credit, the mayor puts his own money where his mouth is he is a major private contributor to the arts. But fund-raisers say that finding well-heeled contributors and foundations to fill the void is becoming harder and harder. Even with an ambitious fund-raising drive, the New York Public Library, which is mostly privately financed, foresees reduced hours and book purchases if it loses a projected $7.3 million in city aid on top of the $16 million cut last year.

Because these institutions draw not only New Yorkers but also millions of tourists, the cuts could have enormous impact on neighborhoods where they are the chief employers. The amount of city support is a tiny slice of the municipal budget, and the size of the projected cuts for cultural institutions is proportionately much larger than the cuts for other programs. The mayor and the City Council, as they continue working on the final spending package, need to trim very carefully in this area and ask themselves when the money saved is outweighed by potential economic losses.

Copyright 2003 The New York Times Company

June 5th, 2003, 09:40 AM
June 5, 2003

Mayor Restoring Deepest Cuts in City's Services


Mayor Michael R. Bloomberg backed away yesterday from $90.2 million in service cuts, abandoning plans to reduce trash pickups outside Manhattan, curtail library hours and slash a summer jobs program.

Although the mayor was vague about where he would get the money to pay for all the services he plans to maintain, he said he would find the money and would be able to avert the threatened cuts, which included reducing service on the Staten Island Ferry.

His unusual decision to relent on threatened cutbacks even before he started serious negotiations with the City Council was a break with the city's customary pattern of budget negotiations. Typically, the mayor proposes cuts, the City Council fights them, the mayor meets the Council partway, and the two sides hammer out a deal shortly before the budget takes effect July 1.

This time, the mayor went it alone. Although the Council had been vigorously fighting to save some of the threatened services, Council Speaker Gifford Miller was conspicuously absent yesterday when the mayor announced his change of heart at an unscheduled, hastily assembled City Hall news conference.

By rolling back some of his toughest proposals on his own, Mr. Bloomberg may neutralize some of the criticism that mayors undergo each budget-cutting season. By doing it before the Council restores the services at the negotiating table, he may be able to steal some of the glory that council members usually claim each year as protectors of endangered city services.

The changes have come at a time when the mayor's poll numbers were plummeting while he was raising taxes and cutting services. City Comptroller William C. Thompson Jr. accused him last week of favoring Manhattan with his budget policies, particularly the sanitation cutbacks. A spate of television ads paid for by unions resisting his calls for concessions have portrayed him as an uncaring, out-of-touch billionaire.

Mr. Bloomberg said yesterday that since the city had certain commitments for federal aid and stood to benefit from a $2.7 billion state aid and tax package, he felt he could restore some services. For instance, Albany gave him permission to raise the city sales tax, and yesterday, less than an hour after he announced the $90 million in restorations, he signed a bill raising that tax by one-eighth of one percentage point, which should net $120 million a year.

The city is well within striking distance of proposing a balanced budget for the fiscal year that begins July 1. It plans to whittle away at the projected $3.8 billion gap with $2.7 billion in new state-approved taxes and aid, $600 million in planned cuts, $200 million in back rent from the Port Authority of New York and New Jersey, and $200 million in help from the federal government.

Mr. Bloomberg was vague about how he would pay for the $90 million in restored cuts, though. He said that he did not think the city would get more money than it was counting on, and that he did not believe alternative cuts would be needed.

"Since some of the risk and the uncertainties in the budget have now been removed, while still you're not sure where it's going to come from, over the next 12 months there will be some things that surprise us positively, some things that surprise us negatively," the mayor said. "I think at this point, however, prudence says we can go and run a bit more of a risk and provide services."

A little later he added that city agencies would have to be more efficient.

The mayor said that because some of the programs he was restoring qualified for state and federal matching funds, the $90.2 million he was spending would bring in $74.4 million in additional state and federal money. That will give the city a total of $164.6 million to spend on services.

Just 24 hours after he had stood at the same lectern and said his decision to scale back his plans to reduce staffing on certain fire crews would not cost the city any money, he said yesterday that he was putting $8 million in the budget to pay for the change.

Even as he was restoring the spending for the next fiscal year, the mayor said the city was expecting a $2 billion deficit in the 2005 fiscal year and $3 billion the following year.

Diana Fortuna, the president of the Citizens Budget Commission, a business-backed watchdog group, said: "It's hard to see how these restorations aren't temporary, given the outlook for 2005. If they found a way to scrape together enough money to do these restorations now, the fact remains that there are more serious challenges ahead."

The mayor's changes stunned the Council. Mr. Miller, the council speaker, who may run against Mr. Bloomberg in 2005, said he did not care who got the credit.

"You know, frankly, I don't really care as long as the programs and services that New Yorkers depend upon are protected in the budget," he said. "I think that quite clearly the mayor is doing this in response to the concerns that were raised by the Council, and by many other people."

While Mr. Miller continued to call on the mayor to back away from his threat to close zoos in Brooklyn and Queens, he was left with relatively few other high-profile cuts to fight. He spoke of fighting to keep health clinics open, to keep paying foster-care agencies the same rates, and to preserve City University scholarships.

Councilman David I. Weprin, a Queens Democrat who is chairman of the Council Finance Committee, said, "My guess is that the mayor saw his poll numbers and figured that since these cuts were going to be restored anyway, he might as well restore them now and save himself from getting beaten up for two more weeks in the press."

Lobbyists were also surprised by the developments. "It changes the whole dynamic," said Bobbie Sackman, the director of public policy at the Council of Senior Centers and Services, a group that lobbies for more money for programs serving the elderly. "The dynamic had been that the mayor releases the executive budget, and then you look to the City Council for the restorations. The City Council has historically been the heroes over the years."

Copyright 2003 The New York Times Company

June 24th, 2003, 10:45 PM
June 25, 2003

Budget Pact Said to Be Near at City Hall


Mayor Michael R. Bloomberg and the City Council neared a budget agreement yesterday in which the mayor agreed to cut fewer city services and the Council to scale back some demands.

The deal, which would end weeks of bickering, posturing and maneuvering, could be sealed with a handshake as early as today or tomorrow, officials on both sides of City Hall said. And while details of the $44.5 billion spending plan were jealously guarded last night, officials involved in the negotiations said it would avert roughly $100 million in spending cuts, in addition to cuts the mayor has already abandoned.

The tentative agreement calls for saving some if not all of the 12 child health care clinics that were scheduled to be closed, a scholarship program created by the Council for students who go to the City University of New York, and a program that provides weekend meals for elderly New Yorkers, city officials said.

Zoos in Brooklyn and Queens that the administration had threatened to close will likely be saved, officials said. It was unclear if the city would continue to subsidize them at the old level, or if the zoos would be asked to rely more on private donations.

But while both sides expressed relief that a deal was within grasp, there was little celebrating: although an agreement should balance the budget of the fiscal year that begins on Tuesday, officials were projecting a $1.8 billion gap for the following year.

Officials began reporting light at the end of the tunnel after Mayor Bloomberg and the Council speaker, Gifford Miller, met yesterday afternoon for the first time in days. When the meeting ended, Mr. Miller assembled a caucus of Democratic council members and told them that significant progress had been made in the negotiations, according to several council members who attended the meeting.

Mr. Bloomberg later told reporters that the agreement "will be a compromise, like the real world requires."

"We will do as many things as we can and we will not be able to do everything that we would like to," he said.

While the deal could still fall apart or change, both sides expressed relief that they were close to an agreement. As part of the agreement, officials said, the Council will be asked to pass several laws, including a tort reform law the administration has long sought.

The city is closing its budget gap with a combination of cuts, taxes, state aid and federal aid. After meeting to discuss the negotiations, the Council passed an income tax surcharge that was part of the roughly $2.7 billion aid and tax package that the State Legislature approved for the city earlier this year over Gov. George E. Pataki's veto.

The surcharge which should net the city $644 million next year will raise taxes on single New Yorkers with taxable incomes of $100,000 after deductions and on married couples who file jointly with taxable incomes of more than $150,000. The surcharge raises the top rate on those taxpayers to 4.25 percent from 3.648 percent. People earning more than $500,000 will see the rate jump to 4.45 percent.

The surcharge is retroactive to Jan. 1.

Budget negotiations this year played out quite differently from past years. The usual script goes like this: the mayor proposes cuts, the Council objects, and then the mayor restores some but not all of the cuts in a final deal.

This year, though, Mr. Bloomberg unilaterally decided to abandon $90 million of the $600 million in cuts he had proposed, abandoning plans to reduce trash pickups outside Manhattan, cut library hours and reduce service on the Staten Island Ferry.

While the Council was pleased that the mayor had relented on many cuts that they had loudly and forcefully opposed, they were concerned that he had stolen some of their thunder by scrapping the plans on his own. All 51 Council members face re-election in November, and many had been hoping to campaign on a record of saving services.

So Mr. Miller began a publicity blitz, touring the city to dramatize services that were still threatened by the mayor: playing dominoes at centers for the elderly, watching the sea lion feeding at the Prospect Park Zoo, visiting a prenatal clinic in Harlem.

Mr. Miller's budget-cut tour rankled Bloomberg administration officials. For several weeks both sides appeared to spend more time aiming barbs at each other than negotiating seriously. But this week, as the clock ran down toward the budget deadline, the two sides came together with renewed purpose.

Copyright 2003 The New York Times Company

June 25th, 2003, 09:11 PM
June 25, 2003

Mayor and City Council Speaker Agree to Budget Deal


NEW YORK -- Mayor Michael Bloomberg and City Council Speaker Gifford Miller agreed on a $44.5 billion budget Wednesday, ending weeks of squabbling and months of fiscal uncertainty as the city scuffled its way through its worst budget crisis since the 1970s.
The budget deal, sealed by the traditional handshake between the two men in the City Hall rotunda, gives the City Council much of what it had sought -- a package of about $115 million in funding restorations.

The restorations include funds for: Teachers to buy classroom supplies; weekend meals for seniors; libraries to stay open five days a week; 12 child health care clinics that had been pegged for closure; scholarships for college students; and zoos in Brooklyn and Queens that would have lost city funding.

The council did not succeed however, in saving six fire companies from closure. The firehouses had become the focus of intense preservation efforts by neighborhood groups, which culminated earlier this week when several Brooklyn residents shoved $1 and $20 bills under the windshield wipers of the mayor's sport utility vehicle during an appearance by Bloomberg in Williamsburg.

The city will also proceed with some 3,600 layoffs in the Department of Education despite the objections of the City Council.

The council is expected to formally approve the deal Friday.

"I am pleased to announce that the administration and the City Council have come to an agreement which will keep this city safe and continue to improve the school system and provide the services that the people of New York City have a right to expect," Bloomberg said during a joint press conference with Miller and other council members.

"The process that we went through is a process that ultimately insured that we have a budget that really listens to people and responds to their needs," said Miller.

The budget pact -- six days before the start of the fiscal year 2004 -- comes at on one of the latest dates in recent memory. The City Charter mandates that a spending plan be in place by June 5, but the mayor and council missed that deadline as well as a second June 13 cutoff.

Last year, Bloomberg and Miller also failed to meet two deadlines and brokered a deal June 19. In 2000, then-Mayor Rudolph Giuliani and then-City Council Speaker Peter Vallone met the June 5 deadline.

The city's long, winding road to a budget deal was marked by high drama, periods of lassitude and perhaps most significantly, a sharp drop in popularity polls for Bloomberg, the billionaire founder of a financial information company who won office in 2001 based on his business acumen.

While Bloomberg did nothing to cause the budget crisis -- which was created by a downturn in the local and national economies and exacerbated by the World Trade Center attack in September 2001 -- the mayor was often cast as the heavy.

To reduce a projected $6.4 billion deficit, Bloomberg embarked on a series of highly unpopular measures, including laying off some 5,600 city workers, cutting spending by some $3.2 billion and raising property taxes by 18.5 percent, the highest jump in history.

A variety of fees and fines -- from cigarettes taxes to parking meters -- were also increased to pull in more revenue.

The mayor also pushed for -- but never got -- some $600 million in concessions from municipal labor unions.

At one point, Bloomberg considered a so-called Doomsday Plan of budget cuts that included 10,000 layoffs among the city's 250,000 member workforce.

After months of tension, the state Legislature -- over Gov. George Pataki's veto -- finally gave the city permission last month to increase sales and personal income taxes in a package worth some $2.7 billion to the city.

Though the aid allowed the city to close its $3.8 billion deficit, the mayor and council were unable to agree on a spending plan. Bloomberg surprised the council when he unilaterally placed $90.2 million of his own planned cuts back into the budget. The council however, all of whose members are up for election in November, demanded additional funding.

Afterward, for nearly two weeks, Miller embarked on a publicity-seeking tour of senior centers, health clinics and zoos to pressure Bloomberg to restore more funding. Negotiations were stalled for most of that time and the breach was not closed until Tuesday when Bloomberg and Miller met for about 40 minutes at City Hall.

In the end, the $115 million in restorations agreed to Wednesday varies little from what the mayor and council had discussed three weeks ago.

While the deal appears to end the budget crisis for the upcoming fiscal year, there are more hard times ahead: The city estimates a $1.8 billion gap in fiscal year 2005.

Bloomberg however said that in the event of something unforeseeable occurring, he will not propose any more tax hikes in the future.

Copyright 2003 The New York Times Company

June 26th, 2003, 07:48 AM
June 26, 2003

Budget Deal Closes Deficit Without Big Cuts


After months of warnings of dire cuts to city services, Mayor Michael R. Bloomberg and the New York City Council agreed on a budget last night that was remarkable not for how many services were cut, but for how few.

With a handshake in the rotunda of City Hall, Mr. Bloomberg and Council Speaker Gifford Miller closed a deal on a spending plan of roughly $44.5 billion that closes a deficit some analysts said was the city's largest since the fiscal crisis of the 1970's.

To win the Council's support, the mayor abandoned $115 million in cuts he had planned, on top of the $90 million in cuts he backed away from earlier. The deal saved zoos in Brooklyn and Queens, weekend meals for the elderly, 11 child health care clinics that would have closed, and scholarships to the City University of New York. It will also restore curbside recycling of plastic and glass over the next year. [Page B1.]

But the mayor was not persuaded to reopen six fire companies, or to avert scheduled layoffs.

City officials said that they were collecting slightly more in tax revenues than they had projected, and that a recent tax and aid package from Albany gave them some room to rescind cuts. But they were vague about just how they would pay for the saved services, which total more than a third of the $600 million in cuts the mayor called for in April.

Officials said the spending plan would close a deficit that the city estimated at $6.4 billion just seven months ago, doing so through a combination of taxes, cuts, federal and state aid, and a surplus from the current year. It drew a mixed reaction from budget analysts.

Many praised Mr. Bloomberg for closing what was by any measure a daunting gap. But experts were divided on the overall approach to balancing the budget: the mayor's decision to spare many city services by increasing, since December, the city's property tax, its income tax on its top earners and its sales tax.

Liberals praised Mr. Bloomberg, saying that by saving services he was preserving the city's quality of life and enabling it to continue to be a desirable place to live and do business. Glenn Pasanen, who teaches political science at Lehman College, wrote in a recent essay on the mayor's plan that he had "smartly averted a fiscal meltdown."

But conservatives warned that the higher taxes, which are hitting residents in conjunction with higher state taxes, could slow an economic recovery, or even endanger it.

The final plan differed in several important respects from Mr. Bloomberg's original budget proposals. When he failed to win permission from Albany to impose a large commuter tax, he wound up raising taxes on residents of his own city instead.

When the city's unions balked at his requests to save the city $600 million by changing the workweek, health benefits or the pension system for future employees, the mayor ordered more cuts, including the layoffs of roughly 4,000 workers.

"The people of this city have stood up and taken care of themselves," Mr. Bloomberg said last night. "And we appreciate the help that we get from Albany and the help that we get from Washington, but I don't think that anyone can question the courage that the City Council and the administration showed in saying that if we want services, we're going to have to find a way to do it efficiently and pay for them."

Mr. Miller, who was still negotiating the deal in the park behind City Hall an hour before the handshake, said, "We have asked in these difficult times for people to sacrifice, for people to contribute a little bit more to their city because it's the right thing to do to build for recovery."

The final handshake between Mr. Bloomberg and Mr. Miller, who both wore green neckties for the occasion, came with a few just days left before the city's fiscal year begins on Tuesday. It capped weeks of budget battles and political gamesmanship.

Earlier this month, Mr. Bloomberg, a Republican whose popularity has slipped as he has struggled to close back-to-back, multibillion-dollar deficits, pre-emptively rescinded many of his deepest cuts, including plans to cut back on garbage collection outside Manhattan, service on the Staten Island Ferry and library hours. His move robbed the Council, whose 51 members face re-election in November, of the chance to claim credit for saving the services.

So Mr. Miller, a Democrat who is considered a possible challenger to Mr. Bloomberg in 2005, went on a publicity tour through the city to dramatize the harm he said would be caused by other proposed cuts. He ended up getting more money for most of the stops on the tour: zoos, centers for the elderly, libraries and prenatal clinics.

To the end, there were minor disagreements. The Council said it had averted $115 million in proposed cuts; the mayor's side preferred to think of it as $90 million in restorations, plus $25 million in averted cuts offset by other cuts. The Council also won an agreement to add $100 million to the capital budget for construction projects. As part of the agreement, the Council agreed to pass a so-called tort reform law sought by the mayor.

Recycling of plastic and glass, which was suspended by last year's budget agreement, will resume: the city will begin recycling plastic again as soon as possible, and will resume glass recycling on April 1, 2004. But the city will reduce all recycling collections from once a week to once every two weeks from July through April.

For all the fanfare that accompanied the handshake, fiscal analysts cautioned that it was still only a spending plan, and that many things could change. Less than a month after striking last year's budget deal, the mayor ordered more spending cuts, and less than half a year later, he called for a large increase in the property tax rate.

Mr. Bloomberg said yesterday that he did not expect major changes, and that barring the unforeseen, he would not need to raise taxes again or call for more layoffs.

So far, the city has preserved its bond rating through its fiscal troubles. Robert A. Kurtter, a senior vice president at Moody's Investors Service, said: "From where we sit, we would try to avoid being judgmental about the mayor's approach. Our approach would be: Was it successful? Did it close the gap? It appears to."

Other were happy to offer judgments. Edmund J. McMahon, a senior fellow at the Manhattan Institute, a conservative policy group, said he thought the mayor's plan was overly reliant on taxes. "You've got a double weighting of taxes," he said. "This is a city economy that's struggling by all accounts. It may or may not have bottomed out. And it's been hit with billions of dollars in tax increases, state and city."

Mr. Pasanen, the political science professor, praised the mayor for reducing city spending by nearly $3 billion with relatively little impact on city services, and for his decision to raise taxes to save services. "He has pushed through a $3 billion tax revenue proposal which was brave, bold and effective, I think," he said.

Bonnie Brower, the executive director of City Project, a liberal policy group, said that she would have liked to see more business taxes and that the cuts to services should not be discounted. "A year ago our libraries were open six days a week, and now we're hearing that they are being restored to five days a week," she said. "Who does that affect? It's working people, poor people, families."

Copyright 2003 The New York Times Company

June 27th, 2003, 05:38 AM
June 27, 2003

New Budget Maintains Most Services in New York City


Fire marshals will no longer investigate most car fires. There will be 3,500 fewer police officers compared to three years ago. Inmates on Rikers Island will not get intensive drug counseling. And most city libraries are now open five days, instead of six.

It is hardly the kind of thank you that New Yorkers might expect after being asked to pay higher income, sales and property taxes in the fiscal year that starts Tuesday. But despite those cuts, New York City government will offer an array of services that is still more generous than it was early in Mayor Rudolph W. Giuliani's tenure, when New York faced its last major fiscal crunch. And the cuts agreed to this week by Mayor Michael R. Bloomberg and the City Council are just a pittance compared to the wholesale reduction of basic government operations that occurred during the mid-1970's fiscal crisis.

The less drastic state of affairs comes after Mr. Bloomberg abandoned threats to cut after-school programs for children, close city pools, slash street and sidewalk repairs and reduce the frequency of the Staten Island Ferry. In fact, so few of the dire budget cuts that Mayor Bloomberg warned of earlier this year remain that most New Yorkers will find it extremely difficult to discern any difference in the services they have become accustomed to receiving from their local government.

That means that on Tuesday, the sprawling $44 billion enterprise that is the New York City government will to a large extent merely return to service levels that were common before Mr. Giuliani went on a second-term spending spree, expanding city programs with surpluses fueled by Wall Street. So Mr. Bloomberg's latest spending plan might more accurately be labeled a "pre-boom" budget, not a "recession era" one.

In the simplest of terms, the deal reached on Wednesday on the new $44 billion budget means that city-taxpayer-financed spending will have increased 2.7 percent in the first fiscal year of the mayor's tenure and 4.9 percent in his second year. By comparison, in the first year of Mr. Giuliani's tenure, spending dropped by 3.1 percent, followed by an increase in his second year of 2.3 percent.

The most pressing question that emerges from this calculus in the minds of the professional budget watchers, and perhaps among more than a few taxpayers, is did Mayor Bloomberg and the City Council cut enough, given the extra burden imposed on city residents through higher taxes and fees?

For fiscal conservatives, the answer is obvious: the balance is somewhat out of whack. "Citizens are being asked to sacrifice far less in terms of services in this go-around compared to the 1970's and the early 1990's," said Diana Fortuna, president of the Citizens Budget Commission, a business-backed research group. "We are not in favor of service cuts. But the way the city closed the budget gap has been too heavy on taxes."

Anthony Coles, a deputy mayor in the Giuliani administration, said, "City services have not been cut to the bone."

But for others who put a premium on maintaining the quality of life in New York City a particularly sensitive topic in this post-Sept. 11 era Mr. Bloomberg made the right choice in leaning more on tax increases than service cuts. City residents and businesses, they said, are still reeling from the damage caused by the terrorist attack and do not want to be subjected to noticeably dirtier streets and sidewalks, poorly maintained parks, bigger public school class sizes and much longer lines in some city hospitals and health clinics, all of which happened, at least to some extent, after the cuts in the mid-1970's and the early 1990's.

Mayor Bloomberg and Council Speaker Gifford Miller both made that point after they shook hands Wednesday evening at City Hall, where they announced the budget deal. "It will provide the services that the people of New York City have a right to expect," Mr. Bloomberg said before praising the Council for its support. The mayor and Council, Mr. Miller added, acted responsibly: "We have asked in these difficult times for people to sacrifice, for people to contribute a little bit more to their city because it is the right thing to do to build for recovery."

The Bloomberg administration does not dispute that some city agencies emerged almost unscathed. Consider the Department of Transportation. Earlier this year, the agency announced that it might have to cut midday and weekend service on the Staten Island Ferry, reduce inspections and cleanup crews on city bridges, slow down the repair of potholes and sidewalks and cut the express bus service on weekends from the Bronx, Brooklyn and Queens into Manhattan. None of those threats materialized. About the only cut the department can still identify is turning off the string lights used to illuminate the East River bridges at night.

"We are kind of back to normal," said Tom Cocola, a Department of Transportation spokesman. "The revenues came through."

Similarly, the Parks Department was going to slash its seasonal maintenance workers, force the closing of zoos in Brooklyn and Queens by withdrawing its subsidy and stop trimming the city's 500,000 street trees, except in emergencies. All of those threatened cuts have been dropped.

But the story is not uniform. During the 1970's fiscal crisis, the Fire Department lost more than 2,000 firefighters and 16 fire companies were abolished. The fire commissioner at the time, John T. O'Hagan, acknowledged that property damage as a result of fires probably increased slightly because of the resulting somewhat slower response times. The Fire Department also severely cut back its fire code violation inspection teams.

In the city's new budget, the cuts are nowhere near as severe. Six engine companies picked because they were close to other existing stations were eliminated. That action has prompted intense protest, but city officials argue that in five of the six cases in Cobble Hill, Greenpoint, Williamsburg and Sunset Park, all in Brooklyn, and East Harlem the response times should remain within the citywide average of 4 minutes 46 seconds. Only the neighborhood once served by Engine 261 in Long Island City will have to wait longer; the average response time should now be 5 minutes 10 seconds, compared to 4:08 before.

The Fire Department will also end up with a staff of fire marshals totaling about 100, half of what it was two years ago. As a result, the marshals will most likely make 1,500 to 2,000 fewer investigations in the coming year, no longer automatically seeking to determine the cause of routine car fires or modest and unsuspicious building fires.

The party most severely affected by this cut will likely be insurance companies, which rely on these investigations as they seek to figure out who is to blame and how to divvy up the cost of repairing damage.

The school system, as the budget now stands, will have to do without 860 of its school paraprofessionals and the equivalent of 767 full-time school aides, who monitor hallways and bathrooms and distribute books, among other duties. These cuts, if they are not withdrawn, should save the city about $53 million. But Chancellor Joel I. Klein has said that despite these and other reductions, individual city schools would get more money than last year because of new sources of money and the way the system is managed.

Libraries are taking one of the hardest hits. During the 1970's, the New York Public Library branches were open only three or four days a week. But even during the recession in the early 1990's, the libraries maintained a six-day-a-week schedule that had started at the end of the Dinkins administration. Now, most branch libraries have been cut back to five days. As of this spring, the mayor had called for cuts that would have forced an even shorter weekly. But with money put back in by the mayor and Council this month, the most likely impact will be less money in the coming year to buy more books, City Council officials said.

Many service cuts Mr. Bloomberg has imposed since taking office essentially bring the city back to a level that existed not too long ago.

As of 2000, as the city was enjoying record budget surpluses and spending started to grow at a rate far above inflation, every neighborhood in the city had weekly recycling pickup, instead of every other week, as it had been citywide before 1998. On July 1, the city will return to every-other-week pickup for nine months. But city residents will not see more street-corner litter baskets overflowing, because unlike in the early years of the Giuliani administration, Mr. Bloomberg is not curtailing the special crews that do extra pickups for these heavily used trash baskets.

And while the Bloomberg administration had earlier stopped recycling of some items, it is now bringing them back, first with plastic next month, and then with glass in April.

The Police Department will see its uniformed force level off around 37,500 officers in the coming fiscal year, roughly equal to 1996. As Mayor Giuliani funneled more money to public safety the Police Department and the city schools benefited the most from the increased spending in his second term the force hit 40,710 officers in 2000. The rollback from this peak has forced Police Commissioner Raymond W. Kelly to eliminate Operation Condor, a three-year-old program that put several hundred million dollars worth of overtime into narcotics sweeps and later was used to pay for officers working additional days to enforce quality-of-life laws.

The Narcotics Division, which once had nearly 3,000 detectives and officers, now has fewer than 2,000. Precincts are patrolling the streets with fewer uniformed officers, and in some cases can only field one or two patrol cars on the midnight-to-8 a.m. shift. The uniformed task forces that serve as reinforcements for precincts and respond to special events are also short-handed, as are detective squads.
Crime nonetheless has continued to decline. Reports of overall serious crime are down 7.71 percent so far this year, but murder has recently ticked up 3.1 percent. The end result is that the Police Department now has fewer officers than it did a couple of years ago, but still more than it had before 1994.

From Mr. Bloomberg's perspective, the bottom line is this: Even as fixed costs have risen, the city will spend $2.6 billion less than planned when he arrived in office in January 2002. That amount has been captured because of his administration's insistence that agencies cut spending. The city has canceled increases in spending that agencies had been counting on, or asked agencies to find ways to deliver the same services with less money, like buying food in bulk for school children, the elderly and the homeless.

Finally, the savings came through some small, selective service cuts.

Copyright 2003 The New York Times Company

July 2nd, 2003, 08:56 AM
July 2, 2003

City Eases the Pain in Budget for Arts


Despite the worst New York City budget deficit since the 1970's fiscal crisis, the specter of closed museum galleries, canceled performances and staff cuts at the city's cultural institutions diminished with the budget agreed upon last week.

While the arts budget will be cut by more than $11 million, another $16.2 million in planned cuts was restored, leaving cultural institutions surprised and relieved.

The Department of Cultural Affairs said Albany aid enabled Mayor Michael R. Bloomberg and the City Council to avoid deeper cuts.

"It's a significant restoration," said Ellen Futter, president of the Museum of Natural History. "It will prevent us from having to do things like charging New York City school groups, closing galleries and closing days."

Some organizations will still have to reduce hours or staff and postpone events to save money. But for the 34 institutions owned by the city or on city land known as the Cultural Institutions Group, the damage is nowhere near what was expected.

"A trustee asked me, `Is this good enough to break out the Champagne?' " said Alan J. Friedman, director of the New York Hall of Science in Queens. "I said, `No, but if you've got a bottle of beer, that would be appropriate.' "

"It's still the largest cut in our 20-year history," Mr. Friedman said. "So that's why it's sort of a beer celebration."

The cultural budget for fiscal year 2004 provides $118.8 million in expense funds , down from the $130.4 million initially budgeted last fiscal year. (Ultimately, $120.4 million of that was allocated.)

City agencies often predict doom and gloom to engender support only to have the situation turn out better than anticipated. Because of the city's dire economic condition, however, this time arts groups believed the threat was more real.

Cultural groups cautioned that there was still the annual November budget review ahead, when all of these gains could be undone. And the economy remains tough for cultural institutions, given that foreign tourists have yet to return in typical numbers since the terrorist attacks. The Metropolitan Museum of Art, for example, will see its city financing reduced by about $1.5 million under the new budget from its 2003 level of $ll.8 million. "It's still not good in a period of rising costs and low attendance," said David E. McKinney, president of the museum. "The city is still a shrinking portion of our allocation."

"Still I'm relieved," he added. "I thought it could be a lot worse."

The Hall of Science will have its appropriation cut by $230,000, to $1.4 million a significant reduction but a marked improvement over the $580,000 decline required by the mayor's executive budget. Instead of eliminating 21 positions, the hall is likely to eliminate about 11 positions, Mr. Friedman said.

Given that the city was trying to close a deficit estimated at $6.4 billion, cultural institutions said they had faced an especially difficult battle for their own interests.

"Making the case for the cultural institutions is always really tough," said Karen Brooks Hopkins, chairwoman of the Cultural Institutions Group and president of the Brooklyn Academy of Music.

"They can't really be measured against other city services," she said. "It's not about having garbage picked up or streets cleaned. It's like asking, `Would you rather eat or see a play?' One is sustenance, the other is substance. They exist on a different level."

The restorations to the cultural budget were striking not only for the economic climate but also because they marked a new chapter in the political dance between Mayor Bloomberg and the City Council. Under the previous administration, Mayor Rudolph W. Giuliani cut the cultural budget and the Council put the money back.

This time the mayor decided to restore $9.7 million to the cultural budget even before the Council put back $6.5 million. The result was a cut of about 9 percent over all from the amount budgeted last year.

This may have been because of the pressure brought to bear on the mayor by Council members and cultural groups. The mayor initially proposed cuts of 18 percent in January, which increased to 28 percent in April.

But ultimately, Mr. Bloomberg restored money to the arts before being forced to, which at least some arts executives attribute to his longstanding commitment to culture as a private citizen and as he continues to give millions of dollars to institutions ranging from the Israel Museum to Lincoln Center.

"He came into office understanding the essential value of cultural institutions and artistic activity," said Randall Bourscheidt, president of the Alliance for the Arts, an advocacy group.

Cultural organizations say the mayor pushed them to lean on their private donors more heavily during the city's economic downturn. Mr. McKinney of the Met said this effort was based on the erroneous assumption that other people could contribute at the level of Mr. Bloomberg, a billionaire. "Very few have his resources," Mr. McKinney said. "Many of our trustees have stepped up to a degree we appreciate. But it's difficult to raise money for straight operating expenses."

Ms. Hopkins said the mayor had come to realize that philanthropic dollars in a contracting market could not necessarily make up for a loss in city financing.

"The part he had to be persuaded on was that we weren't going to pick it up with private donations," she said. "That finally got across."

Ms. Hopkins said the Council speaker, Gifford Miller, was also a key ally, "a champion for us."

In an interview Mr. Miller said he was struck by the level of support for the arts among Council members, many new to their positions.

"All members of the City Council feel very strongly about the importance of investing in the arts from an economic point of view and from a spiritual point of view," he said. "As a result, it remained a priority for everyone."

Copyright 2003 The New York Times Company

December 18th, 2003, 08:48 AM
December 18, 2003

Revenue Up, but Mayor Urges Cuts in Spending


Mayor Michael R. Bloomberg urged his senior staff yesterday to continue to push for ways to cut spending, warning that the city must remain fiscally vigilant despite signs that the city economy is improving.

The plea for fiscal restraint, made by the mayor in a meeting with city department heads at Gracie Mansion, came even as four separate budget monitoring agencies are estimating that city tax revenues are surging faster than the Bloomberg administration recently estimated.

Reports by the state and city comptrollers, the New York City Independent Budget Office and the Financial Control Board put tax revenues ahead by $75 million to $320 million. Two of these reports have been issued and the others which will be released in the next week.

These estimates are on top of a $575 million jump in tax revenues that Mayor Bloomberg said he anticipated for this fiscal year.

There is little risk that the city will end this fiscal year with a deficit, especially with the higher revenues, which reflect greater than expected receipts from city business, real estate and personal income taxes.

But both Mr. Bloomberg and the fiscal monitors are cautioning that the rise in revenues is far from enough to erase a deficit that is projected for the fiscal year that starts next July. Current estimates of the shortfall on next year's projected $47 billion budget range from $1.7 billion to $2.6 billion, even with the extra tax revenues.

The mayor backed up his cautionary remarks yesterday to his agency heads with a letter, sent out by his budget director, asking city departments to once again scour their spending plans to look for possible cuts.

"The growth in mandated fixed costs, primarily pensions, health benefits, debt service and Medicaid, outstrips revenue growth," the letter from the Office of Management and Budget said.

The rosier tax projections by the fiscal monitors represent a return to a pattern seen during the Giuliani administration, when the mayor's office traditionally underestimated tax revenues as part of an effort to curb city spending and ensure a good-size annual surplus to help take care of future needs. During the recession, the city lost so many jobs that the Bloomberg administration's revenue estimates at times proved to be too optimistic.

"The city genuinely is not in the clear yet," said Ronnie Lowenstein, director of the Independent Budget Office, which is scheduled to release its budget report today. The report estimates revenues will be $321 million higher this fiscal year than the mayor has projected. "And the most significant part of the problem is outside the city's short-term control, and it is not clear how they are going to deal with that."

At a minimum, the new revenue estimates demonstrate that Mr. Bloomberg is now in charge of a city that is in much better shape fiscally than when he first came into office, and faced an estimated budget gap of more than $6 billion.

"The budget gaps are still large," said Jeffrey Sommer, acting executive director of the Financial Control Board, which was established by the state after the 1970's fiscal crisis. "But as long as the city does what it has done in the past by increasing revenue or decreasing spending there should not have to be drastic reductions in services or a midyear crisis to ensure budget balance, like happened last year."

Copyright 2003 The New York Times Company