Mayor Bloomberg Announces de Blasio Will Inherit ‘Historic’ Balanced Budget

Mayor Michael Bloomberg described the move as "historic."

Mayor Michael Bloomberg described the move as “historic.”

Mayor Michael Bloomberg today announced that his successor, Bill de Blasio, will become the first new mayor in modern history to inherit a balanced budget–but Mr. de Blasio’s team says he remains “concerned” nonetheless.

“For the first time in modern memory and perhaps for the first time in New York City history, the budget for the incoming fiscal year has been balanced for an incoming mayor well before he or she steps into office,” said Mr. Bloomberg, reporting the new numbers at a press conference at City Hall.

Back in June, Mr. Bloomberg had predicted a $2 billion budget deficit for fiscal year 2015, which begins in July 2014. But today, he said the black hole had been filled, thanks to a list of savings and new money, including an additional $500 million in tax revenue and $364 million in savings on health insurance premiums, as well as a series of one-offs, such as a $60 settlement with Verizon, high-than-expected taxi medallion sales prices, and $200 million from the sale of two under-utilized city buildings.

“We are proud of what we’ve achieved, and now we want to help the de Blasio administration … get off to the best possible start,” said Mr. Bloomberg, who described the situation as far rosier that the one he inherited 12 years ago, when he took office just after 9/11.

While most of the savings are already locked in, he said it would now be up to Mr. de Blasio to decide how to proceed.

“What it means is that the next administration does not have to go and cut services … They could reduce services and reduce taxes, they could increase services and increases taxes. What they can’t do is increase service and decrease taxes. That’s just not possible. Only the federal government can do that, unless you can make Bitcoins,” he said.

The new budget does put away money for union raises–but not enough for the retroactive increases many unions are demanding. (Mr. Bloomberg said the only way to provide those would be through tax increases, which he said would have “a devastating impact on the city.”)

He also said his budget staff had debriefed the de Blasio team about the new numbers and described the mayor-elect’s reaction as muted. “He said, ‘um, interesting.’ It was a dry thing.”

But Mr. de Blasio’s spokeswoman, Lis Smith, suggested the mayor-elect was skeptical about the numbers.

“We’re reviewing the budget modification released by the Mayor today, and remain concerned about the continued impact of sequestration, high uncertainty around  the flow of Sandy recovery aid, and the liabilities from unresolved labor contracts. We will continue to review this new budget information closely in the coming days and weeks,” Ms. Smith said.

Michael Mulgrew, the president of the teachers’ union, which has long sparred with the mayor, was more biting.

“This is a classic Bloomberg budget game,” he charged in a statement. “He lowballs revenue projections, overestimates expenses, and then claims poverty.  When the real numbers come in, with more revenue and fewer expenses than he claimed he was expecting, he takes credit for the magical appearance of a surplus.”

Updated at 2:46 p.m. with Mr. Mulgrew’s reaction.