Bloomberg's Budget Spares Teachers; Boosts Sales Tax

Mayor Michael Bloomberg outlined the city's 2010 budget today, announcing more spending cuts and layoffs to balance next year's budget, but sparing teachers, firefighters and police officers from the chopping block.

There will be "further belt tightening by city agencies" next year, Bloomberg said.  "Everybody has to sacrifice a little."

Next year's budget "avoids the worst case scenario," Bloomberg said, as teachers, firefighters and police officers will not be subject to layoffs. But, he said there will be head count decreases across all city agencies, in large part served through attrition.

He ordered city agencies to come up with more savings earlier this month, and today announced another $324 million in cuts.
   
That brings the total amount of spending reductions for fiscal 2010 to nearly $3.4 billion.

The new budget takes effect when the fiscal year begins on July 1. The plan calls for 3,750 in job cuts, bringing the total job losses for this year to 328,000, up from the forecasted 294,000, according to the mayor.

The budget will also double the sales tax hike he proposed just a few months ago for New York City. Bloomberg wants to raise the city sales tax by 0.5 percent. The proposed sales tax hike is double the 0.25 percent increase the proposed in his preliminary plan in January.
   
The latest increase would raise the city's portion of the sales tax to 4.5 percent. It would generate about $552 million in revenue for fiscal 2010, Bloomberg said.

The City Council and the mayor must agree on the budget by July 1.

Bloomberg said any surplus from last year will be used up in the 2010 budget, and he described the 2011 budget outlook as "murky."

On the bright side, there will not be any teacher layoffs and the budget preserves job training programs, senior and children's and augments small business loan protections.