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NYC's $68.5 Billion Budget Accord Saves Day Care, Fire Companies

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BLOOMBERG
AP



By Joan Gralla

June 25 (Reuters) - New York City Mayor Michael Bloomberg and the City Council on Monday agreed on a $68.5 billion 2013 budget, which spares 20 fire companies from the ax an d increases funding for day -care and after-school programs.

"We've again produced an on-time, balanced budget for our city that doesn't raise taxes on New Yorkers, and that preserves the essential services that keep our city strong," the mayor, a political independent, said at a news conference.

Restoring the fire companies will cost $59 million.

Bloomberg did not reveal what was cut so the 20 fire companies could be saved from the chopping block, along with day care and after-school programs.

"There are so many balls in the air all the time," he said. "Some things wind up on the floor. Some things wind up in the budget."

The city has now won back more than 200 percent of the private-sector jobs lost in the recession; the nation has only regained about 40 percent, Bloomberg said. The recession from December 2007 through June 2009 was the worst such downturn in the U.S. economy since the Great Depression.

Funding for day-care and after-school programs was increased by about $150 million to a total of about $417 million. More than 50,000 children from low-income families will get day care - 7,000 more than initially planned. Almost 30,000 slots for after-school programs were restored.

"A budget is a statement of values, a statement of priorities," Council Speaker Christine Quinn said. "Without a doubt, our No. 1 priority is the importance of providing every child with a quality education," she added.

MUSEUMS, LIBRARIES AND TAXI MEDALLIONS

Cultural institutions - such as museums - are a $6 billion sector of the city's economy. Their funding will rise slightly to $50 million. Libraries will get an extra $90 million, enabling them to be open to the public an average of more than five days a week.

The mayor said there would be "de minimus" layoffs in the new budget. He didn't elaborate on how minimal those layoffs might be, noting that this would be up to the city agencies involved.

The jobs of 400 teachers' aides were saved, partly because the union agreed to cut the amount of time they work each day by half an hour, said Quinn, who is expected to seek the Democratic mayoral nomination.

Bloomberg's third and final term as mayor concludes at the end of 2013.

The City Council is expected to vote on the new budget in the next few days.

At Monday's news conference, the mayor said he has increased t he estimate of how much w ill be raised by selling 2,000 taxi medallions to a total of $1.46 billion from $1 billion.

But the sales now will be spread out over three years. Revenue for fiscal 2013 should total $635 million. Another $365 million will be raised from this one-shot deal in 2014 and $460 million in 2015.

Bloomberg said there would be an "enormous" hole in the city's budget if taxi groups, which have sued the city to block the taxi medallion sales, succeed in their court battles.

The city's 2013 fiscal year starts on July 1.

The budget for the city's 2014 fiscal year has a deficit of $2.5 billion, which Bloomberg said "is going to require an awful lot of work" to close.

New York City has endured 11 rounds of budget cuts since 2007 that have saved nearly $6 billion.

To balance the new budget, Bloomberg is draining a reserve fund he created to pay the healthcare costs of retired city workers by taking out $1 billion.

Bloomberg brushed off a question about whether the city's new budget relies too heavily on non-recurring revenues, though he thanked District Attorney Cyrus Vance for winning legal settlements. Most recently, ING Bank NV agreed to pay a total of $619 million to settle claims it violated U.S. sanctions against Cuba, Iran and other countries.

The city got about $150 million from that federal settlement.

Lower interest rates are expected to reduce debt service by about $90 million in the new budget.