Bloomberg’s Rainy-Day Fund

New Yorkers should prepare themselves for a springtime filled with squawking and screeching. No, we’re not talking about the birds in Central Park, but about the City Council, whose feathers have been ruffled by Mayor Michael Bloomberg’s newly announced $59 billion budget for fiscal 2008.

Between now and June 30—the date by which the Mayor and Council must agree on a final budget—many Council members and union leaders will be attacking Mr. Bloomberg for his refusal to spend the city’s robust budget surplus on an array of politically popular programs. But the Mayor’s fiscal sobriety is great news for New Yorkers who care about the future of this city.

For four years in a row, the city has shown a surplus. This year’s was a record-setting $4.4 billion, thanks to more tax revenue flowing into city coffers than expected. Many, if not most, elected officials, faced with such abundance, would go on a massive spending spree or cut taxes—anything to avoid passing along an inheritance that might help their successors.

But Mayor Bloomberg isn’t behaving like a politician here; he’s behaving like a smart C.E.O. whose ultimate responsibility is to the shareholders—in this case, the people of New York. The city faces projected budget shortfalls of almost $10 billion in the coming four years, thanks to ballooning health-care and pension costs. And there’s no guarantee that the financial and real-estate markets will continue to finance a boom. Indeed, an economic slowdown—locally or nationally—could change the city’s fiscal condition overnight.

The Bloomberg budget shows a sharp awareness of such a possibility, by making wise, long-term investments in the city’s infrastructure and putting aside funds now to cover future obligations. The Citizens Budget Commission gave Mr. Bloomberg high marks for shifting “the emphasis from the short-run budget cycle to the long-run planning horizon,” and City Comptroller William Thompson pronounced the 2008 budget “fiscal integrity at its best.”

The budget’s spending priorities include $320 million to purchase and protect upstate land surrounding the city’s water supply, and $81 million to bring greater energy efficiency to city-owned buildings. Fortunately, the budget doesn’t include the ill-conceived $300 renters’ tax cut favored by the City Council.

One trusts that City Council Speaker Christine Quinn, who surely sees the virtues of the Mayor’s budget, will keep the lid on her members. Councilman David Weprin, chairman of the Council’s Finance Committee, has said that he’s skeptical about some of the Mayor’s measures, and has suggested that some of the surplus should go toward restoring previous cuts to city agencies. But as Mr. Bloomberg commented, “As soon as Mr. Weprin comes up with $10 billion, I think it’s prudent that we talk about that …. Everybody likes to go out and say, ‘I want to cut taxes, I want to give you something, I want to build something for you.’ The trouble is, somebody has to pay.” Bloomberg’s Rainy-Day Fund