Accessibility links

Breaking News

New York City Faces Financial Crisis - 2002-02-23


New York City is facing its biggest financial crisis in 30 years. The new mayor, Michael Bloomberg, is hoping that a boost in tourism will help turn the city around and undo some of the financial damage done by last September's terrorist attacks.

Tourism is New York City's second largest industry. Like the rest of the city's businesses, it is suffering. So, it's no surprise that Mayor Bloomberg set aside time to talk with members of the foreign media, through whom he hopes to woo world travelers back to New York.

The mayor underscored the fact that New York City is experiencing a fiscal crisis, a deficit of $4.7 billion has been forecast for the next 12 months. With the economy in a downturn, the mayor is in a difficult position: How can he balance the budget when tax revenues are down, and needs are rising? "You can't raise taxes because people are, more and more, able and willing to move away if their tax base goes up," he said. "And you can't cut back too much on services, because services provide you with the future: schools that you have to build, investments in museums and athletic facilities, we have to have a police department that keeps the streets safe."

The mayor's bind is made worse by the fact that the city is in serious debt, with $42 billion in outstanding loans. New York City is the largest debtor in the United States.

Mr. Bloomberg's immediate plan is to make financial cuts in services wherever he can, while not diminishing the quality or scope of those services. The task, he says, involves making difficult choices which is what he was elected to do.