Archives of the Mayor's Press Office

FOR IMMEDIATE RELEASE
Date: Thursday, January 29, 1998

Release #047-98

Contact: Colleen Roche (212) 788-2958, C. Curtis Ritter (212) 788-2971


MAYOR GIULIANI ANNOUNCES NEW YORK CITY'S FINANCIAL PLAN FOR FISCAL YEARS 1998 - 2002

Unveils $1.2B Surplus; Proposed City Spending Held to Less than 1%; Out-Year Gaps Cut in Half; Targeted Spending to Enhance Education & Public Safety; More Tax Cuts Planned

Major Shake-Up at CUNY Community Colleges Proposed

For the second year in a row, the New York City four-year financial plan contains a record surplus of more than $1 billion, according to Mayor Rudolph W. Giuliani. In releasing the New York City Financial Plan for the for Fiscal Years (FY) 1998 - 2002, the Mayor said that the plan reflects the Giuliani Administration's continued fiscal priorities: reducing the out-year gaps, cutting taxes to stimulate job growth and increasing spending in targeted areas while holding overall spending to less than the rate of inflation.

Stressing that education continues to be a major priority Mayor Giuliani has also put forth a bold new initiative to reform the CUNY Community College system. The Mayor proposed that the segments of CUNY Community Colleges not doing college level work be removed from CUNY control and that a wide range of educational institutions -- public and private -- be permitted to bid and compete for running new "high school completion" programs.

"Four years ago our Administration was handed a budget that presented the City with its greatest fiscal crisis since the 1970s," said Mayor Giuliani. "Since then, we have revolutionized the City's basic budget philosophy and have not only overcome the crisis but have produced a budget surplus for the second year in a row.

"With an emphasis on securing the long-term economic future of the City, we have implemented a balanced, prudent, three-part approach to the budget. Even this year as our healthy and vibrant economy has produced a second year of unprecedented revenues, we will maintain our commitment to reducing the out-year gaps, cutting taxes to stimulate job growth and increasing spending in strategic areas to improve the quality of life for all New Yorkers.

"Since the adoption of the FY98 budget, the City is now forecasting additional resources of $3.1 billion. We will not repeat the mistakes of the past. Seventy-three percent of this money will be used to reduce the out-year gaps; 19 percent will fund targeted educational, public safety and other initiatives; and an additional eight percent will be used to reduce taxes even further.

In conclusion, the Mayor added, "As we have said in the past, budgets are not simply about balancing numbers. Budgets are about making important decisions that will create a safer City, a City of enhanced opportunity and, most importantly, a City that invests in its people -- now and for the future."

OUT-YEAR GAPS
To reduce the out-year gaps, the City has imposed fiscal discipline on the rate of growth of City spending which has, over the last four years, been held below the rate of inflation. For FY99 the proposed City-funded spending increase will be held to 0.6 percent. The budget stabilization account, established for the first time last year, will be maintained in FY99 ($210 million) and another created for FY00 ( $210 million). As a result of this careful fiscal management and planning, the out-year gaps have been cut in half compared to six years ago (FY93, $13.3 billion v. FY98, $6.75 billion).

JOB GROWTH
While all government jobs in New York City have declined by 46,500 since 1994, private sector job growth has increased by 184,700 during the same period. In fact, in 1997, the City experienced the largest privite sector job growth in the last 13 years.

TAX CUTS
In addition to the tax cuts already enacted in FY99 ($819 million), the Mayor has proposed an additional $237 million in tax reform, bringing the total tax cuts for the year to $1.56 billion. Over the course of this proposed financial plan, tax cuts already enacted will return $3.6 billion to the City's private sector and proposed cuts will raise this to a total of $5.8 billion. Additional tax cuts include:

IMPROVING THE QUALITY OF LIFE
This financial plan demonstrates the Administration's commitment to improving the quality of life for all New Yorkers. To ensure the continuation of unprecedented crime reductions, 1,600 new police officers will be added to the New York City Police Department . Five new anti-drug law enforcement initiatives will be added to the four already in existence -- bringing the total to nine. Anti-drug initiatives will now be in place in all five boroughs.

EDUCATION INITIATIVES
The Fiscal Plan will continue to meet the educational needs of New York City's children. This plan will provide the Board of Education with over 28 percent of the City's budget and provide the Board of Education its largest Capital Plan ever.

Two new programs will be created this year -- one which will end social promotions for third graders who are unable to meet the requirements for fourth grade ($25 million added), and another which will establish evening and night courses for high school students who cannot graduate on time ($7 million added).

The Fiscal Plan also calls for continued funding for several educational initiatives to ensure their continued success, among them:

CUNY REFORM
The Mayor said that standards must be restored at CUNY Community Colleges. Community College students are unprepared for college work and these institutions are failing to raise achievement levels within a reasonable amount of time. In fact, 87 percent of CUNY Community College students failed at least one of the three basic skills exams (reading, writing and arithmetic) given to incoming freshmen. These students may have a high school degree, but they do not have a high school education.

The Mayor has proposed that the portion of CUNY Community Colleges which is not doing college level work should be removed from CUNY control and a wide range of educational institutions be permitted to bid and compete for running the new high school completion programs. The goal is for students to earn a certificate that is an accurate reflection of a high school education. At the same time, students remaining in the CUNY Community College system will be the beneficiaries of an actual college education.

CAPITAL EXPENDITURES
Among the projects included in the preliminary Capital Plan, which totals $27.2 billion, are: