"Good morning. This is Mayor Mike Bloomberg.

"Today most New Yorkers are looking at their household budgets to find ways to cut expenses, increase income, and make ends meet in this difficult economy. At City Hall, we're doing that, too. Last week, we released the City's preliminary budget for the fiscal year that begins July 1st. It addresses the hard challenge of closing a $4 billion gap between our expenses and the money we'll have to pay them.

"At the outset, let me say that we're working hard to help New Yorkers weather this recession: To stay in their homes, keep their small businesses open, find new jobs, feed their families, and stabilize their finances. We've also got a duty to keep the City's own finances on firm ground. And with the economy stalling and tax revenues falling, that necessarily involves making some hard choices. As you may have already read or heard, that could include raising the City sales tax - something I hope we don't have to do, but something that may prove necessary.

"Then there's the City's spending, which falls into two categories. First, there's what we call 'controllable expenses' - those we actually have some discretion over. It might surprise you to learn they account for less than half the City funds in the budget. We're holding this spending flat from the current budget year to the next by using existing resources to meet the needs of our growing city. There will be cutbacks in programs and agency workforces. But we've taken great pains to ensure that in the process, we won't weaken New York City's great quality of life.

"The City's 'non-controllable expenses' include such items as our ever-growing pension and health benefit obligations, what we pay in Medicaid costs, and also the costs of borrowing money for essential long-term improvements, such as building new schools and paving streets and highways. In order to balance next year's budget, we've also got to reduce non-controllable expenses, which means we'll need help from our partners in the State and Federal governments, and also from the municipal labor unions.

"For example, the time has come for State leaders to make some common-sense reforms to pensions for future City employees. Our current pension system was designed in an earlier age, when life-expectancy was much shorter than it is now. The result is that today we're paying full pensions to retirees who in some cases are still in the prime of their lives. That's money that we could instead use to hire police officers, extend library hours, or pay for other services. It's also only reasonable to ask City employees to start paying part of the cost of their health care insurance - something private sector workers have long done. When the economy was strong, we negotiated contracts with City workers that shared the extra revenues; now that revenues are shrinking, the unions have to be part of the solution.

"Nothing would please me more than avoiding some of the choices included in this budget. But in the current economy, the only wise course is to prepare for the worst. And while the city's economy may take some time to recover, I'm also completely confident that New Yorkers will pull through these hard times together - just as we have so many times before.
 
"This is Mayor Mike Bloomberg. Thanks for listening."