2004-01-21 / Front Page

$400 Rebate, More Cop 

Hirings Feature Mayor
By John Toscano

$400 Rebate, More Cop 

Hirings Feature Mayor’s Budget

By John Toscano

Seemingly before the ink even dried on the announcement of Mayor Michael Bloomberg’s proposed $45.7 billion 2005 budget last Thursday, reports of City Council counter-proposals and changes appeared in the media the following day in an attempt to take the bloom off the mayor’s feel-good spending plan.

Highlighted in the mayor’s announcement were the already heralded $400 real estate tax rebate to private homeowners, the plan to hire more cops and, most surprisingly, a $1.4 billion surplus from the present budget to help offset future budget deficits.

But reports from unnamed council officials said the city legislators, concerned that the rebate didn’t reach enough people, were considering a permanent rollback of a small percentage of the real estate tax rate to spread the savings to businesses and apartment building owners.

By spreading the relief among all categories of real estate payers, the end result would be a lesser rebate. Also diminishing the mayor’s munificent payback to owners of private homes was a pending increase in assessed valuations that would increase real estate taxes for all classes of property owners, private and commercial.

For the record, Councilmember Peter Vallone Jr. (D–Astoria) said in a prepared release that he saw some good and some bad in the mayor’s proposed budget, the bad being, "The Mayor has apparently given up on the commuter fee."

Councilmember John Liu (D–Flushing) also offered his reaction, mainly that the mayor made no mention of wanting to impose tolls on East River bridges, which Liu, chairman of the Transportation Committee, was happy to see.

Vallone said he was ecstatic that the budget included tax relief to homeowners, a promise he said he fought for prior to the increase in the real estate tax to 18.5 percent. He was also happy, he said, that the proposal contains minimum cuts to the police and fire departments, which he will fight to restore.

But he was very disappointed that the mayor has apparently given up on reimposing the commuter tax, which had no support in Albany.

Liu said he thought the mayor should temper his optimism that the economy will solve many of the city’s budget woes. "We are still facing a very real $2 billion structural deficit," said Liu, a CPA.

Another comment came from  U.S. Senator Hillary Rodham Clinton (D–New York). She said she welcomed the mayor’s request that the federal government develop a new formula for the allocation of Homeland Security funds, that would increase the city’s share.

Clinton said she looked forward to working with the mayor to convince the president and the Republican-dominated Congress of New York City’s obvious needs. She said she would introduce a bill that ensures more funding is targeted to high-threat area such as New York City.

In issuing his budget proposal, the mayor prefaced it with a look back at the past two years, when New York weathered the toughest fiscal crisis in a generation, he said.

During that period, "Budget gaps hit all time highs; pension, Medicaid, and other non-discretionary spending is growing at a tumultuous rate and more than $3 billion gap-closing actions have been achieved."

But, today, he went on, "through strong, decisive and disciplined financial management, the city’s finances have stabilized and tax revenues are strengthening. Wall Street profits are expected to top $15 billion, a substantial increase over last year, but well below industry expectations.

"Tourists are returning to New York City, hotel occupancy and room rates have increased and the real estate market remains healthy. However, significant out-year budget gaps remain and fiscal restraint is still a necessity."

The mayor ticked off several big ticket items in the budget: the $400 tax rebate totalling $250 million, $25 million to end social promotion in the schools, $15 million to match federal funds to hire a new class of 730 police officers and to get on a schedule of hiring two Police Academy classes every year.

Budget gaps expected in the 2006 and 2007 fiscal years would be closed partially with the $1.4 billion surplus generated in the present budget.

The mayor said the city is requesting $300 million assistance from Washington and $400 million in aid from Albany. He noted that New York City pays over $11 billion more in federal taxes than it gets back from the federal government, and that New York City residents pay 33 percent more in taxes than the statewide average.

To help close the 2005 budget gap, the mayor said, there would have to be a $324 million agency reduction program. City council sources said the figure represented perennial cuts in allotments to seniors, parks and library services. They would fight to restore these when the final budget is negotiated, they said .

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