Sep 24, 2008 1:45 pm US/Eastern
Bloomberg Calls For Cuts By Agencies Across Board
NYC Mayor Wants $1.5 Billion In Cuts, Continuing Through, After 2010; Schools, NYPD Could Be Hardest Hit
NEW YORK (CBS) ―
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Mayor Michael Bloomberg warned all NYC residents on Sept. 23 that even tougher financial times lay ahead.
Gabriel Bouys/AFP/Getty Images
New York City Mayor Michael Bloomberg is wielding a big axe, calling for deep budget cuts in response to the financial climate. The midyear budget cuts are intended to provide a financial cushion should the city's tax revenue, which is heavily dependent on Wall Street's profits, drop further.
From the cops on the beat, to the firehouse, to the classroom, the Wall Street collapse is pressuring the city budget big time. On Tuesday, Bloomberg asked department heads to draw up another round of cuts to the tune of $1.5 billion for this year and next. His people say it's a worst case scenario.
"Running the city, and being the mayor doesn't mean you sit there with your fingers crossed," Deputy Mayor Ed Skylar said. "You need to take action and maybe you prepare for the worst and hope for the best."
The numbers are sobering. Roughly $100 million from sanitation and the fire department each, almost $300 million from the NYPD and the schools could get hammered for more than $500 million.
Expect a street fight over the particulars, even as the city prepares to levy a 7 percent property tax hike just to slow the bleeding.
"That's going to affect homeowners, people who have condos, renters … they're going to feel that and a lot of people are already struggling," said Carol Kellerman of the Citizens' Tax Committee.
Pay more, get less was also the message on Capitol Hill, where the Bush administration is pressing for the $700 billion bail-out of financial firms.
Either way, we're going to pay.
"It makes me angry," Treasury Secretary Henry Paulson said. "When you ask about taxpayers being on the hook, guess what? They're already on the hook."
Saving Wall Street with federal dollars, though, could mitigate the local impact but no one knows for sure. Congress isn't about to write a blank check.
"There are those in public debate who have said we must act now," said Rep. Mike Pence, R-Ind. "The last time I heard that I was on a used car lot."
What happens in Washington will impact our local situation. City Council Speaker Christine Quinn told CBS 2 HD some of the New York cuts may be "too tough to bear."
The timing of the announcement suggests the mayor may be seeking to soften the political fallout from the possible property tax increase. The mayor may be trying to show that everyone, including the government, will be feeling the pain of a slowing economy.
Bloomberg says commissioners who are unable to manage with less can find themselves out of a job.
"That's their job and they're going to have to find a way to do it if they can't then we're going to go around them in spite of them or simply replace them," said the mayor.
The City Council will vote to approve or modify the budget cuts in November. In the past, the council has more often than not sided with Bloomberg's proposals.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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