Facing Our Fiscal Challenges
From The Mayor’s Desk...
New York City’s annual budget is more than $44 billion. But in balancing the budget, our choices are basically the same ones available to any family or business. When expenses exceed income, we can close the gap either by decreasing our spending…increasing our revenue…or by some combination of the two.
Last week, I presented the city’s preliminary budget for Fiscal Year 2004, which begins July 1. It was the first step in a five-month-long public process that will culminate in the City Council approving a final city budget. Because of the continued economic downturn, we’re anticipating a budget gap for Fiscal 2004 of approximately $3.4 billion. To close that gap, city agencies will continue to do more with less. We’ll ask our municipal workforce to step up to the plate. And we’ll also seek partnerships with the State and Federal governments that will increase the funds coming into the city treasury.
First as to spending reductions: Since January 2002, we’ve cut the expenditure of city tax funds by some $2.6 billion. Just to put things in perspective, that’s roughly 18% of the spending we have discretion over—spending that’s not mandated by law or court order. But we’ve made every effort to absorb those reductions by being more efficient in delivering City services—and by most measures, we’ve succeeded.
Labor costs represent more than half of the City budget. We simply must bring those costs down. To do that, we’re proposing measures that will allow us greater flexibility in making work assignments, and to eliminate outdated work rules that inhibit productivity. Currently, non-uniformed city workers have a 35-hour workweek; lengthening that to 40 hours would save the city millions of dollars a year. These and other productivity measures that we’re seeking would be worth some $600 million in the next City budget. And we’re confident that, as they always have in the past, the municipal unions will do their part for the good of the city.
We’re also seeking help from Albany and Washington. The most important piece here is tax reform. We’re asking the State Legislature to conform the city’s Personal Income Tax to the way taxes are imposed by the State itself—and that is to tax all who work in our city at the same rate. Everyone who benefits from City services should pay for them; it’s really just that simple. This tax restructuring would reduce the typical New York City resident’s personal income taxes by an average of $500 per year. It also would generate nearly $1 billion in additional revenue that would go a long way toward balancing our budget—and I believe the governor and our legislative leaders will give this tax reform plan fair consideration.
There’s one thing we won’t do to balance the budget: borrow. That would make our children pay for our problems. We owe them a better future than that. As long as I’m mayor, we’re going to shoulder our responsibilities, and meet our budget problems, head-on. Because if we make the right decisions now, our city’s future is unlimited.