In New York City Tuesday, Mayor Michael Bloomberg announced what he calls his "doomsday" contingency budget - drastic cuts the city will have to make in jobs and services if New York State leaders do not agree on a one billion dollar aid package to the city. But even if the state comes to the rescue as expected, the city will still face its biggest cuts in over a decade
For months, city officials have trimmed the budget - cutting 5,000 city jobs, reducing services, and raising taxes. But the city's deficit still has ballooned to almost four billion dollars. Now the mayor warns the city will have to cut everything from funding for the city's police force to its zoos.
A drop in projected tax revenues due to the sluggish U.S. economy and added costs linked to the September 11, 2001 terrorist attack on the city and heightened security expenses are among the factors causing New York's woes. The worst case scenario calls for cutting the police force and sanitation workers, closing fire houses and senior citizen centers, eliminating summer school and most after-school classes, and laying off as many as 10,000 city workers.
Mayor Bloomberg sayid he is optimistic that state political leaders in the state capitol of Albany will help. But he said New Yorkers then must be prepared for contingency budget to a shortfall of $600 million. Mr. Bloomberg said New York City's financial situation is also being dragged down by the national economy.
"The economy is not coming back. And those that say there will be a big boon after the war, well, a lot of people think the war is over and have thought that for a few weeks," he said. "The stock market has not rallied. Companies are not rushing out to buy capital equipment and stimulate the economy. In fact, people are starting to talk about the high cost of rebuilding Iraq. I don't know any more than anybody else what is going to happen. But I do not think it is realistic to sit back and say 'We should not worry about this, the economy is going to bail us out.'"
Mr. Bloomberg said the effects of the national economic downturn and terrorism concerns have been devastating on the two industries that generate employment and revenues, tourism and Wall Street.
The mayor wanted to reinstate a controversial commuter tax, but state officials turned it down. Now Mr. Bloomberg is pushing for a temporary income tax surcharge on workers who work but do not live in the city.
"What we want to do is simply say fairness says if you work in a place everybody should be taxed the same. This is not a new concept. It is what is fair and it would let us reduce the burden that the city taxpayers have by spreading the burden across everybody who works here," he said.
Mr. Bloomberg said the picture will brighten - but not in time to balance the 2004 budget, which is required by law.