Hiring will Continue to be Limited; Only One Employee Hired for Every Two that Depart for Most Positions

Budget Gap of $2.4 Billion Remains for Next Year – Additional Cuts, Revenue Increases or Economic Growth will be Required to Balance Next Year’s Budget

Mayor Michael R. Bloomberg today released the City’s November Financial Plan for Fiscal Year 2011 and an updated four-year financial plan. In September, Mayor Bloomberg ordered a partial hiring freeze and directed City agencies to submit proposals to help eliminate the budget gap for the next fiscal year – Fiscal Year 2012 – that begins on July 1, 2011. As a result, City agencies will be taking $585 million of new budget gap closing actions in the current fiscal year and $1 billion of new budget gap closing actions in Fiscal Year 2012. The budget gap closing actions have reduced the Fiscal Year 2012 budget deficit from $3.3 billion to $2.4 billion. City agencies will continue to be limited in hiring employees, with agencies only permitted to hire one employee for every two that leave, if resources are available. Hiring will continue for positions immediately impacting public health and safety, positions that generate revenue or positions that are not funded with City tax dollars. The November Financial Plan increases City funding for the Department of Education to replace $853 million of expiring Federal stimulus dollars.

“We’ve kept the City’s financial house in order through these difficult times by planning ahead and never shying away from making the hard decisions, and our current budget remains balanced because of that sound approach,” said Mayor Bloomberg. “But we face a significant challenge for next year, as Federal stimulus dollars run dry and the city still suffers from the impacts of the national economic downturn. We began working to attack next year’s deficit immediately after passing this year’s balanced budget, and there is still more work to do. More spending reductions are going to be necessary, and we have to continue to reduce the number of employees we have by not filling positions – we simply cannot afford the size of our current workforce.”

In January, the Mayor will present the Preliminary Budget for Fiscal Year 2012, which will detail the City’s initial plan to balance the Fiscal Year 2012 budget, as required by the New York City Charter.

Department of Education

The November Financial Plan replaces $853 million of expiring Federal stimulus funding at the Department of Education with City funding in Fiscal Year 2012 and the out years of the plan. The City’s July 2010 Financial Plan had assumed that the Department of Education would lose nearly 10,000 teachers. Even with the influx of new City dollars to cover the loss of stimulus funding, the Department of Education will face a loss of 6,166 teaching positions in Fiscal Year 2012 in the updated Financial Plan.

Expense Increases

The November Financial Plan reflects higher pension expenses than were assumed in the July 2010 Financial Plan, due to anticipated changes to pension assumptions and methods, which are expected to be made by the New York City Office of the Actuary and would take effect in Fiscal Year 2012. The changes are expected to increase costs in Fiscal Year 2012 by $1 billion.

The current plan also reflects an increase in Medicaid costs. The July 2010 Financial Plan included savings from an extension of the Federal Medical Assistance Percentages (FMAP) program. A lower than expected benefit was passed by Congress, resulting in a $180 million cost increase for the City.

Agency Gap Closing Actions

This is the ninth round of budget gap closing actions City agencies have been required to undertake in recent years. The cumulative impact of the last two years of gap closing actions and the latest round of actions is $5.2 billion in savings for Fiscal Year 2012.

Examples of the latest round of City agency budget gap closing actions include:

Police Department: 

• Eliminate 350 civilian positions
• Reduce funding for maintenance of police vehicles by extending the fleet lifecycle.

Fire Department:

• Redeploy staffing at 20 fire companies overnight.

Department of Correction:

• Eliminate 51 correction officer positions.

Department of Sanitation:

• Eliminate 200 supervisor posts and redeploy to frontline sanitation worker positions.

Administration for Children’s Services:

• Reduce homemaking services.
• Eliminate 80 vacant Child Protective Supervisor and other managerial positions.
• Reduce administrative and support staff through 118 layoffs.
• Increase Child Care Copayments.

Human Resources Administration/Department of Social Services:

• Eliminate 96 currently vacant positions.

Department of Homeless Services:

• Eliminate 15 percent of security guards in directly-operated family shelters. 

Department of Youth and Community Development:

• Reduce Summer Youth Employment slots by 2,140.
• Reduce Out of School Time holiday programs by five days or nearly 30 percent.
• Reduce funding to 66 Beacon schools by 10 percent.

Department of Health and Mental Hygiene:

• Eliminate City funding for Mental Retardation and Developmental Disability clinical programs.
• Eliminate supplemental funding for two school-based health centers.

Libraries:

• Reduce subsidies by $20 million, reducing the average days of service per week by approximately one day per week citywide.

Department of Cultural Affairs:

• Reduce subsidies by $8.8 million resulting in approximately 190 layoffs at cultural institutions.

Department of Aging:

• Eliminate 14 staff positions.
• Reduce funding for case management and restructure services.

Department of Probation:

• Lay off 57 employees.

Department of Housing Preservation and Development:

• Lay off 14 housing supervision employees.

Department of Finance:

• Lay off 129 employees to consolidate and modernize organizational units and create efficiencies.

Department of Transportation:

• Lay off 35 managerial, administrative, clerical and planning employees.
• Lay off for one week 641 Street Maintenance and Arterial Resurfacing employees, resulting in 9,000 fewer potholes being filled.

Department of Parks and Recreation:

• Reduce the work year from 12 months to 9 months for 1,468 full-time positions to conform with the lighter workload in winter months.
• Eliminate 15 percent of seasonal staff positions.

Department of Education:

• Reduce funding by $350 million.

Civilian Complaint Review Board:

• Eliminate 3 investigative staff positions.

Department of Information Technology and Telecommunications:

• Eliminate 59 call taker positions at 311 through attrition.

Headcount Reduction

The new budget gap closing actions used to reduce the City’s budget deficit for next year will require a reduction in City headcount of 2,102 employees in the current fiscal year, 2011, and 8,264 in Fiscal Year 2012. The headcount reductions include 889 layoffs in Fiscal Year 2011 and 5,312 layoffs in Fiscal Year 2012.

Budget Gaps

The City’s budget for the current year, Fiscal Year 2011, remains balanced. The budget gap in Fiscal Year 2012 is now forecast to be $2.4 billion, down $900 million from the most recent forecast in July.

The budget gap closing actions detailed in the November Financial Plan will help to reduce budget gaps in the remaining years of the Financial Plan, but the City still faces significant deficits in future. The budget gap for Fiscal Year 2013 is currently forecast to be $4.8 billion and the budget gap for Fiscal Year 2014 is currently forecast to be $5.6 billion.