New York City Facing Layoffs, Reduced Services A Tough Balancing Act

Mayor Michael R. Bloomberg presented a Fiscal Year (FY) 2011 Executive Budget and an updated four-year financial plan for New York City that calls for $62.9 billion in spending. While the mayor’s attempt to balance the city’s budget results in no new tax increases for New Yorkers, residents will most certainly feel the pinch of layoffs in various city agencies and reduced services in all areas, including, education, recreation, public safety, housing, transportation, social services, and youth programs.

Mayor Bloomberg managed to balance the FY 2011 Executive Budget in large part by rolling over $3.3 billion of surplus funds from FY 2010, generated mostly through three years of city budget cuts, according to a statement from the mayor’s office.

Mayor Bloomberg and city officials are still awaiting a final determination from Albany, where state legislators are deadlocked in budget negotiations and facing a growing shortfall that will in turn affect the city’s budget numbers. The state has a projected $9.2 billion dollar deficit.

Governor David Paterson has proposed a $134 billion state budget, and the plan includes about $1 billion in tax and fee increases, including a $1 per pack increase in the cigarette tax and a new excise tax of about one penny per ounce on sugared beverages. Cuts are also proposed in dozens of state agencies along with reductions in school aid, health care, and concessions from state unions.

Without a state budget in place, New York City is forced to make assumptions in the Executive Budget on the amount of tax dollars the state will return to the city. This amount is estimated to be $1.3 billion less than last year. However, given the city’s stronger fiscal position from some years of responsible budgeting, the impact of that disproportionately large shortfall will be limited, the mayor said.

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