Mayor Michael R. Bloomberg has unveiled a $59.4 billion budget plan for Fiscal Year 2010 that reduces the city’s workforce by about 13,000 jobs and counts on givebacks by organized labor to reduce a projected $4.8 billion budget gap.
With New York City caught in the throes of the nationwide recession, the mayor is attempting to balance the FY 2010 budget by measures such as increasing the New York City sales tax by half a percentage point to 8.875 percent, enacting a nickel surcharge on the use of plastic bags, eliminating the sales tax exemption on clothing, reducing spending in nearly every city agency, and relying on concessions from unions. With the economy still foundering from this past summer’s Wall Street collapse, Bloomberg announced that city revenues are down by $5 billion since 2008. Real estate taxes in particular are off by a whopping 47.1 percent and sales and personal income tax revenues are also down by around 14.1 percent.
Bloomberg, who is seeking a third term in office through the removal of term limits, acknowledges that there will be tough times ahead. But he believes the city is well prepared for the challenge.
“Because we were on the alert more than a year ago and because we’ve continued to take prudent steps ever since, we are able to keep our budget in balance while still delivering the services our city needs,” said Mayor Bloomberg. “We’ve launched new initiatives to help New Yorkers stay in their homes, find new jobs and keep their small businesses open. These are the essential first steps on the road to economic recovery. The budget isn’t just about numbers. It’s about making choices that keep our social safety net strong for those in need. It’s about keeping our streets clean and safe for your kids and mine. It’s about continuing to improve our schools. It’s about creating jobs and keeping jobs here. It’s about keeping New York—New York.”
Taking Toll on Taxes
One area in which the recession is taking its toll is on incoming revenues and taxes. “Economically sensitive tax revenue—which includes personal income, sales, business, and real estate transfer taxes—are projected to fall by 30 percent,” said the mayor, “or nearly $7.4 billion, in FY 2010 when compared to FY 2008 levels, before the economic downturn began impacting city revenues.” He adds that total FY 2010 city revenues are forecast to have fallen by nearly $5 billion compared to FY 2008 levels.