"Good Morning.  This is Mayor Mike Bloomberg.

"New Yorkers continue to feel the harsh effects of the worst national recession in more than 60 years.  That's true for businesses, for families struggling to pay the bills, and for City government, too.  Thankfully, because we've worked hard to diversify our economy, not as many New Yorkers have lost jobs, or are likely to lose jobs, as once feared.  But we haven't seen the end of job losses yet.  And although the City is collecting more in tax revenues than we once forecast, they're still running well below what they were before the recession hit more than two years ago.

"Those realities pose hard budget choices for the coming City fiscal year, which begins July 1. Last week, I presented our preliminary budget.  It's balanced, and it includes no new broad-based taxes.  Instead, agencies are taking $1 billion in actions, including cutting controllable spending.  In fact, we'll spend less on the expenses we control next fiscal year than this year - something government at any level rarely does. 

"But don't make the mistake of confusing the quantity of money spent with the quality of services delivered. Our City agencies know how to do more with less - to relentlessly identify and implement efficiencies that improve the essential services we all rely on.  Our record-low number of homicides, fire deaths and traffic fatalities during 2009; the continued dramatic improvement of City public schools; and the fact that our streets are cleaner today than they were 35 years ago all show that New Yorkers' quality of life doesn't have to decline when the economy does.  And we're not going to let our quality of life deteriorate now.

"Because our revenues are well below recovery levels, we now have to plan for a headcount reduction of nearly 4,300 City employees.  That includes postponing a Police Academy class, not filling other positions that become vacant, and, regrettably, planning for the layoff of more than 800 City workers - although none will be members of our uniformed agencies. We'll revisit all those decisions as the budget approval process proceeds.  But right now, they unfortunately appear to be unavoidable.

"On the other hand, because our students need their teachers, we're drawing the line at headcount reductions at the schoolhouse door.  That's why we're asking teachers and principals to accept pay raises of 2 percent in each of the next two years on the first $70,000 in their salaries.  The savings from these modest pay increases will prevent a reduction of 2,500 teaching positions through layoffs and attrition.  We believe in paying teachers well, and we've raised salaries by 43 percent since 2002.  But right now, the focus has to be on avoiding losing teachers altogether.

"We're also not budgeting any money for pay raises in the next round of contracts with City employees.  Instead, raises will have to come from productivity savings, employee contributions to health insurance, or pension reform.  With full economic recovery still in the future, we all have to pull together to make our City work well for you, our residents and taxpayers.

"This is Mayor Mike Bloomberg.  Thanks for listening."