Putting together New York City’s budget is a complex puzzle, especially in these economically challenging times. When we released our preliminary budget for the next fiscal year, which starts July 1st, we put a lot of the pieces to the puzzle in place. As they have for the past three years, city agencies will continue to cut expenses. We also made it clear that we won’t impose any new taxes on New Yorkers.
Now to complete the puzzle, and close a projected $600 million gap between our revenues and expenses, we also need help from Albany. We’re well aware that state government has huge budget headaches of its own. We’re willing to do our share to help – as long as it’s a fair share. So we’re asking Albany to take $600 million worth of actions that treat our city justly, and that also free us from budget burdens we can’t afford any more.
It’s a three-part plan. The first involves what’s called “revenue sharing,” which are tax funds that Albany returns to local governments each year. This year, revenue sharing is being cut for every other city and town by 2 percent; but for the second straight year, New York City is being cut 100 percent. That’s unfair on the face of it, especially given how much tax money city residents send to Albany. Our solution: Share the burden fairly. Cut everyone by a uniform one-third. That’ll return $200 million in revenue to our city, without hurting the state’s bottom line at all.
Second, we’re also asking for relief from a state requirement that we make annual $12,000 payments, over and above pensions, to certain retired city employees. Simple and moderate reforms to this expensive mandate would save city taxpayers $200 million in our next budget, and also wouldn’t cost the state a penny.
Third, Albany should restore $200 million of its roughly $1.4 billion planned cut in our education aid. That extra money is an all-important investment in the children who are the future of our city and state. It also will reaffirm the state’s commitment to providing a fair share of funding for our city’s public schools. Because consider this: To make up for the federal and state funds we’re losing, over the past eight months we’ve put over $1.8 billion more in city tax dollars into our schools. So the teacher layoffs that are unfortunately included in our budget are not the result of city under-funding of our schools.
We’ve begun talking to state leaders about the three steps I’ve just described. We’re hopeful that, working with them, we can bring them about. The alternative would mean balancing the city’s budget with new, additional cuts to city services.
That would be painful, and it could well be counter-productive to a city economy that fuels our entire region. Over the past three years, we’ve already cut $5.2 billion in city spending. So far, we’ve managed without unduly harming essential services. Combined with the surpluses we wisely accumulated when the economy was strong, that’s helped us ride out the national recession. Now our economy is recovering, and our tax revenues are running ahead of what we expected. That’s good news, but it’s not enough to solve our budget puzzle alone. The missing pieces are state actions that give New York City the fairness and freedom we need to manage our affairs.