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February 13, 2002


$4.8 billion deficit closed without new taxes or lay-offs

Mayor Michael R. Bloomberg today presented the preliminary fiscal year 2003 New York City budget. A slowing economy and the September 11th attacks opened a projected $4.8 billion deficit in the FY 2003 budget. The preliminary budget closes the deficit in a fiscally prudent manner and avoids both lay-offs and new taxes. Cost savings, agency reductions, greater efficiencies, new partnerships with the State and Federal Government and municipal labor force along with one-time 9/11 revenue replacement financing eliminated the budget gap and allow for a balanced and responsible budget. The Mayor also announced that he had reduced both the headcount and expenses of the Mayor's Office by 20%, as pledged in his inaugural address.

"We must now meet the challenge of this new fiscal reality," said Mayor Bloomberg. "We must work together and find ways to balance our budget as required by law. Today, I am proposing a Fiscal Plan and Preliminary Budget that calls on all New Yorkers to make sacrifices, to cooperate in finding responsible and innovative ways to maintain the financial integrity of our City."

Despite a budget gap of over $4.8 billion, police patrol strength will remain at current levels through civilianization, cost savings and efficiencies and no fire houses will be closed, demonstrating the Mayor's commitment to maintaining the public's safety. All city agencies including the Police, Fire, Correction Department and the Board of Education will institute cost savings and revenue enhancement programs.

"In these tough financial times we must learn to do more with less," continued Mayor Bloomberg. "All City agencies have made tough decisions and I applaud our Commissioners for their ingenuity in the face of daunting challenges. Everyone is part of the solution."

In the late 1990s a booming national and local economy caused the City's tax revenues to grow faster than its expenses generating annual surpluses in spite of substantial tax cuts. These annual surpluses were used in the immediately following fiscal years to fund spending, even as the economic boom receded.

The September 11th attacks have exacerbated the problems facing our economy. New York has lost 100,000 private sector jobs since the attacks. In addition, Wall Street financial services industries have seen their profits decline substantially -- by 60% -- and these firms generate 16% of economically sensitive tax revenues. The City's revenue loss attributable to the attacks is $750 million in Fiscal Year 2002 and $1.3 billion in Fiscal Year 2003.

"Although the September 11th attacks dealt a serious blow to our City and its economy, it did not diminish New York City's remarkable strengths," said Mayor Bloomberg. "We have a productive and entrepreneurial workforce; we have dynamic industries and vibrant cultural organizations; a robust infrastructure to move people, property, and information, as well as a diverse population deeply devoted to our City. We will draw upon these strengths in dealing with the City's serious fiscal problems."

This year's budget process will be more transparent. All of the City's debt obligations, including City lease debt payments will be stated more clearly. New methods of presentation will highlight all of the City employees available to agencies including seasonal, per-diem and part-time workers, as well as those paid for by State and Federal funds.

Contact: Edward Skyler / Jordan Barowitz
(212) 788-2958