FOR IMMEDIATE RELEASE
January 31, 2006
MAYOR BLOOMBERG PRESENTS $52.2 BILLION FY 2007 PRELIMINARY BUDGET
$3.5 Billion Set Aside to Fund Long-Term Costs
Mayor Michael R. Bloomberg today announced his Fiscal Year (FY) 2007 Preliminary Budget and presented an updated four-year financial plan for New York City. The $52.2 billion budget maintains the City’s firm financial footing in the near term and uses one-time resources to help fund $3.5 billion in long-term health care costs, pay-go capital and debt reduction. The $3.5 billion investment in the City’s future aims to improve the long-term financial health of New York City, provide counter-cyclical funding of expenses and address the structural imbalance of New York’s budget. Instead of increasing spending in the short-term, the Mayor is using current revenue to invest in the long-term fiscal health of New York City. In addition, the Mayor proposed pension reform to curb spiraling pension costs and protect the City’s ability to fund necessary services and provide wage increases to municipal employees.
“Now is the time to address the long-term structural problems in New York City’s Budget,” said Mayor Bloomberg. “We have made the tough decision, endured years of difficult choices and our fiscal prudence has temporarily produced additional revenue. In the short term, New York’s budget is stable and strong. However, structural imbalance and large out-year budget gaps persist and not only threaten the City’s long-term solvency, but could force painful budget cuts and tax increases in the future. We are capitalizing on one-shot revenues that will be used for pay-go capital, debt relief and as a down payment on future health care costs for City retirees. For too long, New York City has not prepared for fiscal downturns and the ensuing budget problems they produce. We must seize this opportunity, marshal our current resources and work with our partners in government and labor to make the structural changes necessary to the City budget to put our City on track for long-term and growth and fiscal stability.”
Continued Economic Growth:
FY ’07 Gap Closing
Long-Term Budget Risks:
Long-Term Budget Stability:
Retiree Health Benefits Trust Fund:
State and Federal Aid:
New York City pays over $13 billion more in Federal taxes than it receives from the Federal Government in spending. The City has provided a menu of $900 million in initiatives to the Federal Government to reach its goal of $100 million in assistance. The menu includes reimbursement for UN protection, adequate child care funding to meet TANF work requirements and reprogramming community development bloc grant allocations. In addition, the City requests that the State Homeland Security Grant program must be changed so that it is distributed on a threat-based allocation rather than a population-based formula.
New York City pays $11 billion more in State taxes than it gets back in funding despite being the economic engine of the State. The City has provided a menu of $500 million in initiatives to the State to achieve the $250 million in budget relief it needs. The goal of City’s State Agenda is to control capital construction costs and debt financing and growing pension obligations. In addition, the City seeks the State’s assistance in utilizing government resources more efficiently and creating an equitable human service partnership that will update reimbursement rates and provide the necessary resources to meet TANF mandates. Included in the menu to the State are a $0.50 increase in the City’s share of the cigarette tax, reductions in the State imposed mandates on OTB and repeal of the Wicks Law. In addition, the Mayor will continue to fight for the $6.5 billion in capital construction dollars owed to the City under the CFE lawsuit. The Mayor will also request that Albany extend the $400 property tax rebate for three more years.
Preliminary Capital Plan:
Stu Loeser / Jordan Barowitz (212) 788-2958
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