Release #125-01

 

Contact:

Sunny Mindel/Peter Fenty

(212) 788-2958

View the Mayor's Executive Budget Download Read the Mayor's Weekly Column

Recommends an Additional $494 Million in Tax Cuts,
Including a 25% Reduction in the PIT Surcharge

Share of the Budget Devoted to the Board of Education
will rise to 31% - the highest ever

Provides Largest Ever Capital Plan for Cultural Institutions and Libraries

Funds A Collective Bargaining Agreement with an
Historic Merit Pay Component

Increases Spending for Public Safety Initiatives

Mayor Rudolph W. Giuliani today unveiled his Executive Budget for Fiscal Year (FY) 2002. The Plan is a continuation of the Administration's seven-year history of introducing sound policies and fiscal discipline in the budgetary process. That legacy continues in this Executive Budget that again promotes tax reductions, provides the impetus for economic development, and allows for the funding of crucial public safety initiatives.

The Executive Budget reflects one of the Giuliani Administration's fiscal priorities of reducing spending year-to-year, with a decrease of 2.8%. The Plan further reflects the Administration's success in reducing taxes by $3.2 billion since 1994, and funds an additional $494 million in tax cuts which, increase to $1.3 billion by 2005. The Plan projects a surplus of $2.76 billion in FY2001 and contains a Budget Stabilization Account for FY2002, to assist in the event that the City is faced with an economic slowdown.

"This budget is the capstone of nearly eight years of sound fiscal management by this Administration," the Mayor said. "Today, the City is much stronger, leaner and safer.

"We have worked hard to ensure that New York City is an ideal place to raise a family, start a business, or take a wonderful vacation. And there are indications everywhere that our efforts to turn New York around have paid off: Since 1993 City population rose 9.3%, personal income shot up 49.1%, new construction permits increased 49.2%, and private employment is up 16.6%. All this while crime plummeted to near-historic levels.

"This budget was designed to build on our past successes," the Mayor said. "But we need to be mindful that with the national economy slowing, the City must remain dedicated to exercising fiscal restraint.

"In this last year of my Administration, I feel confident that with the budget I'm presenting today -- along with the many creative programs that we've implemented over the last seven and a half years -- the City is on a fixed course of continued fiscal stability," the Mayor concluded.

FISCAL DISCIPLINE

With the national economic growth slowing, the City must be especially vigilant in maintaining its hard-won fiscal discipline. The Executive Budget for 2002 includes economic assumptions that are realistic; a funded collective bargaining agreement with an historic merit pay component; and a Budget Stabilization Account for 2002 to protect the City's budget from any further weakening in the economy.

LABOR POLICY

The Plan outlines a strategy under which the City's work force can be rewarded for excellence through the structuring of an historic merit pay plan. The Plan also provides an additional $505 million in FY 2002 to fund collective bargaining.

Under the merit pay plan, the City will select employees who have excelled in their work performance for the increases. This provision was a key accomplishment - and an integral component - of an economic agreement negotiated recently with the City's largest labor union.

Contract negotiations are also underway with the remaining City unions. The improved health and pension benefits contained in agreements already negotiated establish the basic parameters for other collective bargaining agreements now being conducted.

JOB GROWTH

In 2000, New York City added 99,000 new private sector jobs, the largest single-year private sector job growth on record. During the last seven years the City witnessed the strongest job gain on record: more than 481,000 new jobs were created since January 1994, 133,000 more new jobs than the 348,000 jobs the City lost in the early 1990s. In 2000, New York City's private sector employment recorded a growth of 3.3%, outpacing the rest of the country's employment, which grew at 2.1%, and the rest of the State, which grew at 1.5%.

In addition, the City's unemployment rate averaged 5.7% in 2000, falling from 6.7% in 1999, to the lowest rate in more than 10 years. The City's unemployment rate is down more than four percentage points since December 1993, when unemployment was 10.2%

TAX CUTS

Since1994, the Mayor has reduced taxes by $3.2 billion. This Executive Budget proposes an additional $494 million in tax cuts, which increases to $1.3 billion by 2005. This Plan is designed to help reinvigorate the economy, stimulate job development and keep government spending in check.

Tax cuts that are proposed in the Executive Budget are:

• Reduction of the Personal Income Tax Surcharge by an additional 25%
  (effective July 2001);
  
• Elimination of the Commercial Rent Tax;
  
• Extension of Co-op/Condo Property Tax Relief;
  
• Creation of a PIT Credit for "S" Corporations;
  
• Introduction of a City Earned-Income Tax Credit;
  
• Repeal of the $2 flat fee tax on hotel rooms, with a reduction for Bed and Breakfast establishments;
  
• Elimination of the Sales Tax on clothing and footwear;
  
• Business tax reform;
  
• Extension of the Lower Manhattan Revitalization Program.

PUBLIC SAFETY INITIATIVES

To build on a series of innovative crime reduction strategies that led to New York City becoming the safest large city in America, the Plan calls for funding the following initiatives:

• Expand Citywide Narcotics Initiative - $33 million is provided to continue fighting drug trafficking crime in neighborhoods Citywide.
  
• Police Officer Recruitment Program - $4 million to increase the advertising of police officer exams and attract qualified individuals by providing 22 exam administrations a year within the five boroughs, at colleges within the New York State Region, and at selected military bases across the country.
  
• Operation Gun Stop - Created to provide rewards to citizens who provide information on illegal gun possession and weapons trafficking.
  
• Property Crime Initiative - Create a property crime taskforce in precincts with the highest levels of property crime, to further the reduction of such property crimes as burglary, grand larceny and auto theft.
  
• Operation Condor - $75 million is provided to continue Operation Condor, and to further reduce crime by providing an increase in the number of tours to 1,000 tours per day, up from approximately 800 tours per day.
  
• Parole Violator Taskforce - Create a Parole Violator Taskforce and expand the Joint Absconder Warrant Squad (JAWS), in order to apprehend every person who violates their conditions of parole.
  
• Operation Discover - $4 million to expand the Warrant Squad to track down criminals associated with the 26,000 outstanding felony warrants, in order to reduce recidivism.

EDUCATION INITIATIVES

The plan provides for a number of programs designed to meet the educational needs of New York City's children. It calls for the funding of several initiatives, including:

• Project Science, 40 weekends of intensive instruction in science for 45,300 students ($25 million), and Project English, 20 weekends of intensive instruction in English for 38,600 students ($9 million).
  
• The initiative also includes the expansion of summer school; 50,000 more students, or a total of 370,000 to attend ($23 million); and the creation of classroom libraries in all 21,000 K - 8 classrooms ($31.5 million).
  

Making Schools Safe, Orderly and Drug-free - Provides for:

• The hiring of 800 School Safety Officers and 400 Crossing Guards ($12.3 million);
  
• Creation of three Second Opportunity schools ($3.5 million);
  
• Establishing In-school suspension centers ($19 million).
  

• Accelerate $359 million of funding for the construction of 12 new school buildings;
  
• Accelerate $300 million of funding for school building repairs and reconstruction;
  
• Sell 110 Livingston Street and move BOE headquarters to a new, smaller building with a new high-standards high school in downtown Brooklyn; and
  
• Provide $100 million in a public/private partnership to expand Take the Field to all 52 athletic fields in need of repair.

Board of Education

• Abolish the Board of Education;
  
• Provide incentives for community school districts to offer school choice;
  
• Install more private management of failing public schools, using an $80 million escrow account for privatization.

CUNY
City funding for CUNY will be conditioned on CUNY taking the following actions:

• Reduction of its central administration; measure calls for the funding to be redirected to CUNY's Honors College Program; measure will help double the size of this year's class of honors students from 150 to 300;
  
• Privatize remediation for at least 1,000 incoming students; and
  
• Appointment of outside reviewers to provide an independent assessment of the testing process to ensure that the implementation of higher standards is not diluted by lowering passing scores, or the grade level of the material tested.

SOCIAL SERVICE ACCOMPLISHMENTS - 1994 to 2002

• Public Assistance caseload now at its lowest level since 1996;
  
• The successful re-engineering of Welfare Centers into Job Centers and the engagement of 100% of public assistance recipients in work activities;
  
• Implementation of subsidized jobs program and individual assessment for families nearing the TANF 5-year limit;
  
• Increase of $325 million in childcare funding, nearly doubling Citywide spending.

HEALTH CARE ACCOMPLISHMENTS - 1994 to 2002

• HealthSTAT enrollment of more than 96,000 children and families in Medicaid and Child Health Plus;
  
• Establishment of comprehensive pest control ($7.7 million) and vector control ($6.3 million) programs;
  
• Targeted funding for cancer reduction programs ($16 million); and
  
• Hospital renovations to improve access and services to New Yorkers ($550 million).
  

CAPITAL EXPENDITURES

The preliminary 10-year Capital Plan provides a total of $54.4 billion in capital funding over the next decade. The Plan provides the requisite commitment to ensure that the integrity of the City's infrastructure continues to improve.

Highlights of the preliminary Capital Plan include:

Major Cultural Expansions

COMPARATIVE ANALYSIS

To properly gauge the resurgence of the City in economic and quality of life terms from 1993 to the present, the following comparative statistics are offered: