FOR IMMEDIATE RELEASE
April 26, 2004
MAYOR MICHAEL R. BLOOMBERG PRESENTS $46.9 BILLION FISCAL YEAR '05 EXECUTIVE BUDGET
Improving Economy Increases Revenues, But Out-Year Budget Gaps Demand Fiscal Restraint
Mayor Michael R. Bloomberg today presented his $46.9 billion Executive Fiscal Year (FY) 2005 New York City Budget. New York City's economy continues to strengthen; revenue from economically sensitive taxes is rising, and the City's fiscal prudence is paying dividends. Unfortunately, spiraling non-discretionary spending is dampening the City's recovery and creating significant problems for FY '06.
"Although this budget is balanced, realistic and responsible, we face significant and troubling out-year gaps, which demand that we continue to restrain spending wherever, whenever possible. And we must set our priorities based on need, not political expedience," said Mayor Bloomberg. "New Yorkers have managed this fiscal crisis with fortitude and compassion, and our sacrifices are starting to pay off. New York's economy is growing: employment is rising and commercial vacancy is falling. Unfortunately the growth of fixed costs and non-discretionary spending is outpacing revenues and creating serious budget challenges in the near future. Now is the time to address the escalating increases in pensions, Medicaid and other fixed costs before they overwhelm our City's operating budget."
New Yorkers have made painful sacrifices over the last two and a half years and their commitment to the City has been instrumental in its recovery and growth. Crime continues to fall,; welfare rolls are near all time lows; parks are clean; accountability and achievement are being woven into our public schools system; and more than 7 million calls have been placed to 311, demonstrating how it has revolutionized the way citizens interact with Government. Private sector employment has grown by 16,000 jobs over the last year and international tourists are returning to New York in numbers not seen since before September 11th, 2001. The forecast for Wall Street profits for calendar year 2004 has been increased to $16.4 billion from $12.3 billion.
Changes in FY '04 Since Preliminary Budget:
Agency expenses have increased by $67 million and Medicaid costs have increased by $200 million primarily because of increased enrollment in Family Health Plus. The ongoing legal dispute over the New York State takeover of MAC debt service has not been resolved, so the planned $502 million benefit for FY '04 has been moved to FY '05. The net effects of the expense and revenue changes in FY '04 will reduce the pre-payment of expenses in FY '05 by $84 million.
FY '05 Gap Closing Program:
Funding at the level of the DC 37 contract terms has been included for all City employees in the Executive Budget. The effect on the City's budget is an additional cost of $533 million in FY '04, $652 million in FY '05, $580 million in FY '06 and $574 in both FY '07 and FY '08.
Growth in Fixed Costs:
$400 Homeowner Rebate:
The Council's proposal squanders the bulk of the rebate on Con Edison ($8.3 million roll back) and large landlords such as the Met Life building ($600,000 roll back) and the Empire State Building ($463,000 roll back). By emphasizing businesses over homeowners the Council's proposal provides only $25 a year in relief for Brooklyn co-op owners, $49 for Queens homeowners and $45 for Bronx homeowners. Because landlords are not obligated to pass on property tax reductions to their tenants and property taxes are just one of many factors that contribute to rent increases for regulated apartments, the alternative proposal provides only $3 a month in relief for stabilized rentals and no relief for unregulated rentals.
Investing in New York's Future:
We have accomplished a lot of over the past few years," concluded Mayor Bloomberg. "Brighter days are undoubtedly here but no amount of sunshine should make us forget the very real challenges going forward. We need to continue making not just the tough decisions, but the right decisions, so we don't squander our gains. Fiscal restraint still needs to be the order of the day or we will be right back where we started. We cannot spend our way back into a crisis. Too many people have sacrificed to let that happen."
Edward Skyler / Jordan Barowitz (212) 788-2958
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