New York City could receive as much as $5 billion for schools, police and other services from the $787 billion federal economic stimulus package, avoiding potential layoffs of teachers and police officers, according to a city official's analysis.
Only two weeks ago, Mayor Michael Bloomberg, in a sobering budget plan, threatened the city's labor unions with 20,000 layoffs if they didn't renegotiate contracts and require workers to contribute more toward their benefits.
The nation's largest city faces a $4 billion budget deficit in the coming fiscal year, which begins July 1.
As President Barack Obama signed the giant stimulus plan into law Tuesday, Deputy Mayor Edward Skyler wrote to Bloomberg that New York's estimated share of the stimulus funds would allow the city to “avoid severe headcount reductions” in the education department and “mitigate” staff cuts in the police department.
The city will use the stimulus money during the next two fiscal years, city officials said.
Skyler said the stimulus funding for education would offset a proposed reduction in state school aid.
The state has a projected $14 billion deficit for the 2009-10 fiscal year, which begins April 1. Gov. David Paterson's budget plan would cut nearly $1 billion from the city's budget, including $669 million in school aid and $328 million in general municipal aid, according to a report by state Comptroller Thomas DiNapoli.
Bloomberg has complained that Paterson's plan would overburden the city and immediately mean higher city taxes and thousands fewer police officers, firefighters and teachers.
The city's final share of stimulus funds for education, which will be funneled through the state, depends on the state's final budget, said Bloomberg spokesman Stu Loeser. Some of the possible stimulus funding for police will turn on the success of the city's grant applications, he said.
“We're optimistic, but nothing is resolved until the state budget is resolved,” he said.
The state's budget deadline is April 1; the city's is July 1.
The city will receive $821 million directly over the next two fiscal years for high-needs and disabled students and school technology, Skyler said.
Also as part of the capital spending portion of the stimulus package, the city could get up to $544 million for water, sewer and transportation projects, according to Skyler's analysis.
City-affiliated agencies stand to get tens of millions of dollars beyond what the city may get directly, the analysis says.
The New York City Housing Authority, for example, is expected to receive $390 million, and the Metropolitan Transportation Authority more than $1 billion, according to the analysis.
The city's potential $5 billion in what's known as expense funding includes money for education, at least $2 billion for Medicaid, at least $35 million for policing, and $295 million for a range of social services, such as Head Start, food stamps, job training and child care, the analysis said.
Skyler warned Bloomberg that the stimulus money won't “prevent or postpone the difficult funding choices you presented in the Preliminary Budget,” nor does it address such rising costs as health care and pensions.
Instead, Skyler said, the stimulus funds will keep city officials from taking “even more dire actions,” assuming current tax revenue forecasts aren't revised downward.
Justin Phillips, an assistant professor of political science at Columbia University who read Skyler's analysis, said while New York City “fares reasonably well,” the stimulus funds are unlikely to turn around the city's bleak predicament.
“I don't think, as the memo indicates, a few billion dollars over a couple years is going to fundamentally change the situation in New York City,” Phillips said.
“The real key here is that the money is going to prevent some reductions in city employees,” he said. “That's great news for the city and, obviously, really great news for people who are going to be able to keep their jobs.”