Bloomberg presents a relatively optimistic budget with a taxi-revenue catch
The mayor presents the budget. Edward Reed via NYC.gov
3:39 pm Feb. 2, 20121
Mayor Michael Bloomberg presented a preliminary budget for the 2013 fiscal year today that is, compared to past budgets, a relatively painless one.
It closes a $2 billion gap without raising taxes or explicitly calling for layoffs, made possible in part by reductions to city-agency budgets and a stabilizing economy. (Bloomberg said the city has regained 65 percent of the private-sector jobs lost during the recession, compared to 36 percent in the rest of the country.)
"The bottom line is I think it is a responsible budget," said the mayor. "I think it is a realistic budget."
One big catch is that the mayor's budgeting is based on the assumption that the city will reap some $1 billion in revenue from the sale of 2,000 wheelchair-accessible taxi medallions. That's optimistic, particularly in light of a recent court ruling that Bloomberg's own legal department has said puts that money in jeopardy.
Those 2,000 yellow taxi medallions are a key component of the mayor’s outer-borough taxi plan, on which a grand compromise was reached in December. The plan calls for the creation of 18,000 special permits allowing livery cars to pick up street hails, 20 percent of which would be wheelchair-accessible, and the auction of another 2,000 yellow taxi medallions, all for wheelchair-accessible vehicles.
While the Assembly has passed the compromise, known as a chapter amendment, and the Senate is set to vote on it as early as Monday, the city cannot move forward with the overall plan until both the governor’s office, and a district court judge, say so.
Only after the city submits, and the govenor approves, a plan for the phasing-in of full accessibility for the taxi and limousine fleet, can the city sell more than 400 of the yellow taxi medallions. The city has yet to submit that plan.
Separately, a district judge has essentially forbidden the city from moving forward until the court receives and approves its own disability-access plan.
There are other reasons it might be premature to derive too much relief from the mayor's relatively painless $70 billion budget, like the fact that, as the mayor pointed out, it was balanced by exhausting the city's rainy-day fund.
“What we’ve done is we’ve put about $6 billion in the good years, and this year we are using up the last of that $6 billion and we do not have a carry projected into 2014, nor do we have a reserve that we could apply if we wanted to,” said the mayor.
“There is no more reserve,” he later added. “We finally used up all of the reserve.”
That may pose problems for next year’s budget, and the ensuing ones, when Bloomberg will no longer be in office. He projected a $3 billion budget gap for the 2014 fiscal year, a $3.5 billion deficit for 2015, and a $3.4 billion deficit in 2016.
The city’s rising pension costs, said the mayor, are a big part of that. And he used the soapbox that is his annual budget address to hammer home the need for the sort of pension reform both he and Governor Cuomo are espousing.
That reform would create new, less-costly benefits-packages for yet-to-be-hired state and city workers.
“Right now our pension system is fairly described I think as a ticking time bomb,” said the mayor. “And we are working in partnership with Governor Cuomo to defuse that time bomb. And I think Governor Cuomo deserves real credit for making it a top priority this year, because we just don’t have much time left to fix the problem.”
Pension costs, said the mayor, make up 16 percent of the city-taxpayer-funded portion of the budget, or one in ever six city taxpayer dollars. That’s six times larger than they were 10 years ago.
“In the current fiscal year, we expect to cross a barrier that ought to really set off alarm bells for our taxpayers,” said Bloomberg. “The total cost of pensions and fringe benefits for all city uniformed works is expected for the first time ever to be greater than the total wages that they earn. Just think about that.”
The mayor's budget earned criticism from both the left and the right.
Nicole Gelinas, an economist with the conservative-leaning Manhattan Institute, criticized Bloomberg's use of "one-shot" revenues, including the retirement health care fund, to plug the city's operating deficit, projected to be $1.3 billion this year.
"It's supposed to be a pension fund for health care costs, but instead, he's really using it as regular budgeting," said Gelinas, in City Hall after the mayor's presentation "That's not a good thing."
The mayor is also relying on help from Albany in order to avoid pain in his budget, according to Gelinas.
"Too much of this budget is dependent on the pension reform" which has to be approved by Governor Andrew Cuomo and state legislators, she said.
Most of the prospective 2013 Democratic mayoral field also piled on.
Notwithstanding the fact that Bloomberg proposed no teacher layoffs, Public Advocate Bill de Blasio said the mayor's plan to cut 16,000 day care and early-education seats for children is a sign that Bloomberg is done fighting major budget battles.
"I think he's coasting a bit," said de Blasio. "This is a business-as-usual budget. This is a bit of third-termitis."
Cutting child-care slots and proposing, for now, the closure of 20 fire houses puts Bloomberg "on the past of least resistance, politically," de Blasio said.
Council Speaker Christine Quinn, meanwhile, faulted the budget, in an emailed statement, for its “proposed use of fees and fines as revenue-raising tools. This is not their intended purpose and we shouldn’t be harassing business and property owners with frivolous violations to bring in more revenue."
The proposed budget anticipates that revenues from more restaurant-inspection fines will grow from $1.28 million in 2012 to $3.84 million in 2013.
Manhattan Borough President Scott Stringer, another mayoral candidate, said, in a statement, that he has "serious concerns about cuts to day-care slots, fire stations and libraries both in the borough I represent and citywide."
But Councilman Domenic Recchia, who chairs the Council's Finance Committee, told reporters he thought the mayor, along with the City Council, has addressed long-term structural changes needed to keep spending under control, and said the mayor is only using $1 billion of the health care fund in this year's budget.
When asked if he was troubled by the mayor using the health care fund for the city's operating costs, Recchia said, "No because we put it away when we had a surplus. Thank God we did. And now it's time for us to take part of it."
Shortly after the mayor gave his speech, his office put out a statement saying that he had pledged $250,000 to Planned Parenthood, an organization he has long supported, to make up for a cut-off of grants from a breast-cancer advocacy group. The Planned Parenthood donation became national news, overshadowing the budget.
I think you need a lot of budget for this plan to work. Adding some and car interior accessories on the taxi cab to make it wheelchair accessible would be really expensive. they should get this job done as soon as possible.