Mayor: Economic Picture Is Brighter But Layoffs Possible

By Sara Frazier and Melissa Russo
|  Thursday, Feb 17, 2011  |  Updated 1:39 PM EDT
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Mayor Michael Bloomberg delivers his preliminary budget plan for the next fiscal year.

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Mayor Bloomberg painted a cautiously optimistic picture of the city's economy in his latest budget plan, saying the outlook has brightened but not quite enough to avoid considering thousands of layoffs and other cuts to city services.

Bloomberg on Thursday presented the $65.6 billion spending proposal for the fiscal year that begins in July. Over the next several months, he and the City Council will work out the details, and is it likely that some funding and proposed job cuts will be restored.

For now, though, Bloomberg is proposing thousands of layoffs and job eliminations through attrition. That includes 6,166 teacher jobs, 4,000 of which would be firings.

The city has about 75,000 teachers in the 1.1-million pupil school system, the largest in the nation.

United Federation of Teachers President Michael Mulgrew called the teacher proposal "bizarre," given previous reductions of the teaching workforce, increasing class sizes, and growing city revenue.

Bloomberg has repeatedly said that the budget has been trimmed down so many times, slashing funding for city services, that officials now have no choice but to reduce the size of the workforce, which has shrunk considerably since he took office nine years ago. In 2002, the full-time headcount was 311,800; now it is 293,903.

"We are going to have to cut back on our spending, and I think it's fair to say that's not going to be easy," Bloomberg said.

The mayor's threat on Thursday to lay off thousands of teachers -- a number that is likely to shrink considerably in the final adopted budget -- is also designed to help him frame a separate argument he is making in Albany.

Bloomberg is in the midst of a battle to get the state to change the rules on how teachers can be fired. He wants to change the rule known as "last in, first out," which requires the city to lay off the most recently hired teachers; he says those decisions should be based on performance.

By proposing a high number of teacher layoffs, he is calling attention to a sort of doomsday scenario as he lobbies for that rule change.

"We have great teachers and I want to make sure we keep the very best, if we have to lay off teachers," he said.

The budget proposal also asks the state to restore some education aid that had been cut. The city wants back $200 million of the more than $1 billion that was cut, and Bloomberg says if that does not come through, the city will have to dig into services and the workforce even further.

The mayor blamed the state for many of the cuts he is proposing. He said millions of dollars in cuts to senior centers, summer youth employment slots and rental subsidies for homeless people transitioning out of shelters are due to state funding reductions.

"If the state does not come through, then we're just going to have to share the pain across all agencies," Bloomberg said.

There is good news, however. Since his last budget update in the fall, the revenue forecast for this fiscal year and the next has improved by $2 billion. The mayor attributes that growth to a spike in revenues from personal income taxes, sales taxes and real estate taxes -- partly due to a quickly-recovering housing market and strong tourism growth.

"Our recovery has been faster and stronger," the mayor said. 

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