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Settlement in Payroll Scandal Gives Mayor’s Budget a Lift
David W. Chen and
Mayor Michael R. Bloomberg said Thursday that an infusion of almost half a billion dollars from the settlement over the CityTime payroll scandal would enable New York to fill more than 2,500 teaching positions that were to be eliminated in the budget for the coming fiscal year, while avoiding tax increases or layoffs of police officers or firefighters.
But Mr. Bloomberg said he would not budge from his plans, first outlined in February, to cut millions of dollars for child care and after-school programs, or to close 20 fire companies and cut back on financing for libraries.
The mayor’s $68.7 billion budget proposal, which is about 2 percent higher than the current budget, sets the stage for what are usually tense negotiations with the City Council to balance the city’s books, as required by law, before the 2013 fiscal year starts on July 1.
“You plan on doing everything that you like to do, and then the reality brings you back, and then you do only part of what you’d like to do,” Mr. Bloomberg said in a budget briefing at City Hall.
Since February, Mr. Bloomberg reported, tax revenues have increased more slowly than had been projected, while costs for social programs, including ones for the homeless, have climbed more quickly. But that additional shortfall would be plugged, he said, by a one-time-only payment of $466 million from Science Applications International Corporation, to settle federal and city investigations into alleged fraud in the CityTime automated payroll system.
Not once, Mr. Bloomberg suggested, did he ever give serious consideration to another much-discussed idea to balance the budget: raising taxes.
“It’s seductive to say, ‘Oh let’s tax everybody,’ but if you do that you’re not going to have a future,” said Mr. Bloomberg, the billionaire founder of a financial services and media giant bearing his name. “Income inequality may be bad, but we still need to have companies come here, make a lot of money, and wealthy people come here and live here — that’s where our tax base is.”
Still, budget experts expressed concern that the 2013 budget was being closed with one-time windfalls like the CityTime settlement and the planned sale of $1 billion worth of taxi medallions, as well as virtually the last of the $8 billion surplus that the city accumulated during the Wall Street boom.
Charles Brecher, the consulting research director for the Citizens Budget Commission, a nonpartisan government watchdog group, said the city needed to “start to get the expenses in line with the predictable revenues, rather than postpone the pain,” before adding, “It’s just going to be harder next year.”
As was the case in his preliminary budget in February, Mr. Bloomberg’s latest proposal did not include some of the recommendations that had caused controversy in previous years. Last year, to take one example, the mayor wanted to lay off 5,400, or 5 percent, of all teachers, but a deal was reached that averted layoffs.
This time, Mr. Bloomberg announced that he had taken a preliminary proposal, to reduce the teaching work force by 2,570 through attrition, off the table. Instead, principals will now be allowed to hire additional staff, the schools chancellor, Dennis M. Walcott, said.
“New York City has lost thousands of teachers over the last few years, and it’s good news to hear that we will be adding educators to the system,” said Michael Mulgrew, president of the United Federation of Teachers. He added that he could not thank the Council and its speaker, Christine C. Quinn, enough “for making education a priority.”
Not long after Mr. Bloomberg’s event at one end of City Hall, Ms. Quinn and Councilman Domenic M. Recchia Jr., chairman of the Finance Committee, held their own news conference at the other. They said they were particularly worried about the cuts proposed to city-subsidized child care programs, and after-school offerings under the Department of Youth and Community Development’s Out-of-Time program. Advocates say that 47,000 children could lose access to those services.
“Unacceptable,” Ms. Quinn said.
In what might have been a sign of the battle ahead, a new coalition called the Campaign for Children participated in a rally on the City Hall steps shortly before Ms. Quinn and Mr. Recchia held their briefing.
Still, citing the mayor’s acknowledgment that he was also concerned about the effect of the cuts, Ms. Quinn said that such “shared concern” made her feel “optimistic.”
She expressed even more confidence that the Council would be able to come up with the money to avoid closing 20 fire companies. “New Yorkers should expect and judge this Council by what we have done, and we have not closed firehouses under my leadership as speaker,” she said.
Ms. Quinn is considered a leading potential candidate for the Democratic mayoral primary next year to succeed Mr. Bloomberg, and some of her rivals offered more barbed comments.
Bill de Blasio, the public advocate, said that “New York will pay the price for shortsighted budget decisions long after the mayor leaves office.”
And Scott M. Stringer, the Manhattan borough president, criticized the proposal as “out of touch” with working families. “We should stop this phony budget dance,” he said, “and stop treating workers as pawns in this annual charade.”
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