U.S. Markets open in 3 hrs 29 mins

NYC Mayor Bloomberg unveils $70B budget proposal

Jennifer Peltz, Associated Press

New York Mayor Michael Bloomberg unveils a proposed budget that totals just over $70 billion, in the Blue Room of New York's City Hall, Tuesday, Jan. 29, 2013. It's Mayor Bloomberg's final budget plan. (AP Photo/Richard Drew, Pool)

NEW YORK (AP) -- After taking a $4.5 billion hit from Superstorm Sandy and losing out on hundreds of millions of anticipated dollars in school aid and taxi permit sales this year, the city can balance its $70.1 billion budget for next year without imposing new taxes or layoffs, Mayor Michael Bloomberg said Tuesday as he laid out his spending plan.

But the city is poised to shed as many as 1,800 teaching jobs amid a costly standoff with its teachers' union, and the budget proposal includes hundreds of millions of dollars in taxi medallion money that still might not come through. It also reflects the results of years of deficit-closing trims and tucks, which the mayor praises as fiscal discipline but some observers have decried as draining government services.

"Our job is not to spend the most money. Our job is to provide the services the public wants with the least amount of tax revenues," Bloomberg said. "The public would like to have everything for nothing, and we can't do that. But we can come closer than we might otherwise."

The mayor's spending plan traditionally is the first move in a monthslong fiscal chess game among policymakers, elected officials and advocates before the City Council approves a budget.

The commentary is likely to be amplified this year by comments from the suite of hopefuls seeking to succeed Bloomberg in the November election. Indeed, candidates and activists began weighing in within hours of the mayor's announcement Tuesday.

Some children's welfare advocates, for example, complained that the mayor's plan would axe $135 million for after-school and early education programs that serve 47,000 children. Similar cuts sparked an outcry from parents last year, and money ultimately was restored.

"The same parents and providers will be forced to fight for the same funding that they were just given a few months ago," Michelle Yanche, an assistant executive director of social service agency Good Shepherd Services, lamented in a statement. City Hall didn't immediately respond.

The budget plan also is shaped by a bitter divide between the city and teachers' union over teacher evaluations. The city didn't get more than $250 million in state school aid this year — and expects to lose that much and potentially more in the next fiscal year — because Bloomberg's administration and the United Federation of Teachers couldn't agree on an evaluation system by a Jan. 17 deadline. Both sides say the other made unreasonable demands that sank last-minute negotiations.

The missed money will spur the city to cut up to 1,800 teachers' and counselors' jobs through attrition and make reductions in everything from field trips to the use of substitute teachers, Bloomberg and officials said Tuesday.

"It will be not good for our kids, but I'm convinced the suffering that we will go through is more than worth it to maybe, finally, get an evaluation deal that will let us put only the best teachers in front of our kids," Bloomberg said.

UFT President Michael Mulgrew said in a statement that "the city should ensure that the lost $240 million come from central bureaucracy and bloated contracts, not classrooms and instruction."

This fall, in the 12th round of budget reductions since early 2007, budget officials told city agencies to propose ways to shave spending ahead of an anticipated $2.5 billion shortfall for the next fiscal year. By law, the city has to craft a balanced budget.

Those cost-cutting measures partly closed the gap, officials said. So did higher-than-expected tax revenue, because of factors including rising property values, and other money, such as cash set aside but ultimately not needed for potential claims payments.

Sandy had represented a big budget question mark, but the city now expects federal aid to cover all $4.5 billion the city tallied in emergency public services and damages to public infrastructure, Bloomberg said. President Barack Obama has signed into law a $50.5 billion emergency relief measure for storm victims in several states.

Bloomberg's budget plan still includes another sizeable uncertainty: $600 million in money from sales of taxi medallions, or permits, that a court has blocked for now amid a dispute between the city and yellow cab owners. The fight already threw a wrench into this year's budget: It included about $635 million from medallion sales, which spurred part of this fall's cost-cutting.

The mayor said he's optimistic the city will ultimately win the lawsuit.


Follow Jennifer Peltz at https://twitter.com/jennpeltz