To: CYBERKEN who wrote (291234 ) 8/28/2002 5:26:10 PM From: Mr. Palau Read Replies (1) | Respond to of 769670 GOP Solution: More taxes or bigger federal government. NYC Mayor Hints Cuts Alone Can't Solve Budget Woes Tue Aug 27, 6:43 PM ET By Joan Gralla NEW YORK (Reuters) - New York City Mayor Michael Bloomberg on Tuesday hinted that either taxes or fees will have to go up -- or the city will have to get more federal or state aid -- because it cannot cut spending enough to close next year's $5 billion budget gap. Nor did the anti-tax Republican mayor sugar-coat the seriousness of the city's economic problems, which have caused tax revenues to fall. In July, the jobless rate stood at 7.7 percent, higher than the national rate of 5.9 percent. "We will have to for the next year and the year after (that) and who knows how many years after that resolve a $5 billion deficit," Bloomberg told City Hall reporters. New York City's economy fell victim to the national slowdown just a few months before the Sept. 11 air attacks, which cost 100,000 people their jobs. Tough times on Wall Street, which has seen profits wither with the stock market downturn, hit New York City hard because it gets such a large amount of tax revenues from this sector. Trying to get a head start on the looming budget shortfall, the mayor gave city agencies until September to tell him how they can slice their budgets by 7.5 percent. If all departments can cut that steeply -- traditionally, education, police and firefighters are spared some of the cuts suffered by other agencies -- the city would save $1 billion. Noting that would only solve 20 percent of the city's problem, Bloomberg told City Hall reporters: "So we're going to have to do more than that." BALANCED BUDGETS New York City's current $42 billion budget year began on July 1. Ever since a fiscal crisis in the 1970s, the city has by law been required to balance its budgets. One of the toughest issues facing Bloomberg, who refused to raise any tax but the levy on cigarettes during last spring's budget negotiations with the City Council, is finding the money to boost the salaries of police officers and firefighters. On Tuesday, 20 out of 51 members of the Democrat-led City Council urged Bloomberg to grant bigger increases to the police and firefighters -- without making them work more days, as he has demanded. Asked if he would support adding a new surcharge on the personal income tax, getting the state to reinstate the $400 million a year commuter tax, or increasing taxes on wealthy New Yorkers, Bloomberg only rejected the idea of trying to set aside new streams of money for a single purpose. Explaining that the first $5 billion raised by what he called expense reduction, an increase in revenue from taxes or fees, or more federal or state aid would have to be used to close next year's shortfall, Bloomberg concluded: "The first $5 billion has already been spent." He also ruled out selling more debt, saying the state probably would not allow that. Nor would credit agencies, he added. Bloomberg has yet to say much about how he plans to close the huge budget gaps he faces. His five-year budget plan calls for hiking tolls for East River commuters. This summer, he hinted the city might cut the $500 million it gives the Metropolitan Transportation Agency of the State of New York each year. In mid-August, thousands of police officers and firefighters, hailed as heroes on Sept. 11, rallied in Times Square to demand bigger pay raises than those reportedly about to be offered them by a state arbitration panel. That panel, whose decisions are binding, was expected to give 23,000 police officers a 14 percent pay hike. But in return, the police officers would have to work extra days. In June, the mayor reached a deal with the 80,000-member teachers union to boost their salaries by 16 percent -- but they had to agree to work an extra 20 minutes a day and accept harsher and speedier disciplinary proceedings.story.news.yahoo.com