Mayor Mike Bloomberg made his annual Blue Room budget presentation for the New York City press corps this afternoon and took aim at officials in Albany and Washington who he said are taking money from the city’s coffers.
“We are in better shape than most cities for two prime reasons: we’ve made smart investments in our economy and we budgeted in a responsible way that prepared us for the inevitable downturn in the national economy,” Bloomberg said. “But we are not an island. We are not immune to the realities in Albany and Washington. And the reality is, both places are keeping more of our tax dollars to close their own budget deficits. I am sympathetic to their need for budget cuts, but actions taken to close their deficits came without changing the burdens they impose on city taxpayers.”
The mayor said that 6,000 teaching positions will be eliminated, and he placed the blame squarely on Andrew Cuomo and the legislature, noting that the state had the largest single year reduction in funding for city education in FY 2012.
“The State continues to disinvest in education in New York City,” the mayor said.
The mayor also noted that New York has seemed to recover from the financial collapse of 2008, with business taxes coming in at a higher level than they did pre-crisis. Deficits however are expected to be the norm for the next several years.
Full details from the mayor’s office below:
State and Federal Disinvestment in NYC
The last 10 years have seen the State and Federal governments’ share of the City’s budget continue to decline.
In FY 2002, the combined State and Federal share of the City’s budget was 36 percent. In FY 2012, the combined State and Federal share of the City’s budget will be only 27 percent.
If the City continued to receive the same percentage of its total budget from State and Federal resources as it did in FY 2002, the City would have received an additional $6.1 billion in State and Federal support FY 2012.
An additional $6.1 billion of State and Federal resources would have reduced the local tax burden for services or New York City taxpayers by 15 percent, or an additional $6.1 billion in State/Federal resources would have eliminated the need for any of the actions in the 10 rounds of budget saving actions taken since 2008.
State Budget Impact
Specifically, the State budget for this year alone cut funding to New York City by a total of $1.8 billion that would have flowed through the City’s budget. The Executive Budget replaces $1.2 billion of the State cut with City funding.
The State budget for this year also cut spending on State-provided services in the City – dollars that do not flow though the City’s budget – by $2.7 billion.
Additionally, the State budget cuts triggered a loss of $2.2 billion in Federal matching dollars.
Those three categories of impact add to a total State budget impact of a $6.8 billion cut for New York City due to the State budget.
The State budget reduced education funding to the City for FY 2012 by $1.2 billion. This was the largest single-year reduction in education funding to New York City and came at the same time as the City lost $850 million in Federal stimulus dollars used to support teacher salaries.
To prevent catastrophic personnel losses in the City’s school system, the Executive Budget provides a major increase in City funds dedicated to education, with an increase of $2 billion of City funds compared to the prior year.
The State continues to disinvest in education in New York City. In FY 2002, State and City funding comprised a nearly equal portion of non-Federal spending on education. In FY 2012, City funding will comprise 61 percent of non-Federal spending and State funding will only comprise 39 percent of non-Federal spending.
If the State had continued to share education costs equally with the City, the State would be providing $2.2 billion more in education funding for FY 2012.
City-funded spending on education has increased from $5.9 billion in FY 2002 to $13.6 billion in FY 2012.
Despite the City’s continued, strong financial commitment to education, historic State education cuts and the need to balance the budget mean that reductions in the size of the City’s teaching force are still required. More than 6,000 teaching positions will be eliminated through attrition and layoffs.
The current State budget eliminated more than $400 million in funding for social services, health and criminal justice, shifting the burden to the City. The Executive Budget uses $121 million of City funds to restore cuts to preserve the most essential services.
A significant loss of Federal funding and cost increases in the child care system reduced the number of children supported by Administration for Children’s Services (ACS) child care program by 16,000 in the Mayor Preliminary Budget. ACS currently provides child care support for 106,000 children, including the 16,000 slots that were slated for elimination in the next fiscal year.
The Mayor’s Executive Budget will ensure all children who benefited from child care services this year will be offered a seat in Fiscal Year 2012. The budget will preserve the services by again increasing City funding for ACS child care and funding an expansion of the Department of Youth and Community Development’s Out-of-School Time program, with the additional slots created in that program helping to continue service for children currently in ACS child care. Compensating for the reduction in Federal aid and the increased costs to preserve the service for all children in the system will cost $40 million.
The City’s Improving Economy
City tax revenues continue to rebound as the City’s economy has recovered from the national recession at a faster rate than the rest of the nation.
Notably, Business Tax revenues – General Corporation, Banking Corporation and Unincorporated Business Taxes – now exceed levels from prior to the financial sector collapse, with Business Taxes in FY 2008 generating $5.41 billion in revenue and a projected $5.75 billion in FY 2012. Business Taxes for FY 2012 are in line with projections from the Preliminary Budget.
Factors contributing to the continued rebound in City tax revenue include:
- Job creation in New York City occurring at a faster rate than the rest of the nation.
- Wall Street profits continuing to exceed expectations.
- A record 48.7 million visitors to New York City in 2010.
- New York City’s commercial real estate market remaining the strongest in the U.S.
In order to reduce the increasing costs of annual debt service payments, the Executive Budget reduces the City’s ten-year capital construction program, excluding water projects, by 10 percent – from $39.8 billion to $36.0 billion.
The City’s full-time and full-time equivalent headcount currently stands at 295,735, a reduction of 16,069 positions since the start of the Bloomberg Administration. The City’s December 31, 2001 full-time and full-time equivalent headcount was 311,804.
The Mayor also announced today that while the Preliminary Budget for FY 2012 presents a balanced budget, New York City will still face budget gaps of approximately $4.8 billion in FY 2013, $5.1 billion in FY 2014 and $5.3 billion FY 2015.