UPDATE 1-Wall St's multi-year losses may hit $70 bln -mayor

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By Joan Gralla

NEW YORK Jan 30 (Reuters) - Wall Street's losses may eventually total $60 billion to $70 billion, including the $47 billion that securities firms have lost in the last two years, New York Mayor Michael Bloomberg said on Friday.

As many as 46,000 financial workers may lose their jobs by the second quarter of 2010, the mayor said at a news conference to unveil his new budget.

Bloomberg, the billionaire who made his first fortune on Wall Street, stressed the pain the industry is inflicting on the city.

As many as 300,000 people could lose their jobs as a result of the crisis, he said. If the current 30 percent drop in the pension fund's assets continues, the city will have to contribute $11 billion more through fiscal 2016.

The mayor, who must close a $4 billion budget gap in the current election year, predicted a lengthy economic recovery for both the city and nation.

"It isn't just 'Go fix the economy, I'll be back at lunchtime.' These things are going to take many years to fix."

Bloomberg said New Yorkers will have to cope with fewer services because 23,000 city workers will lose their jobs through layoffs or attrition starting July 1 under his new budget plan. These include 1,000 police officers, 451 firefighters, and 14,000 teachers.

The mayor said he must wring more dollars out of the state and U.S governments and persuade labor unions to accept a new 10 percent contribution for health care and lower pension benefits for new hires.

"You can only get so much blood out of a stone. After that, it's a headcount thing," Bloomberg said.

City agencies will cut another $1 billion off their budgets, he said.

FAREWELL TO SALES-TAX BREAKS

Homeowners will lose a $400 rebate, saving the city $256 million. The city's 4 percent sales tax will rise a quarter of a percentage point, pushing the total city-state levy to 8.75 percent. The hike, along with the cancellation of a tax exemption on clothing that costs less than $110 and two sales- tax holidays is expected to raise $950 million.

The mayor's remedies, many of which might be tough sales ahead of November's elections, ranged from a 25-cent hike in fees for most parking spaces to 75 cents for half an hour to slowing construction spending on everything from schools to bridges, which means the city will sell 30 percent less debt over the next three years.

The Municipal Labor Committee, a union group, accused Bloomberg of shifting costs to workers, noting he has criticized New York state for the same strategy.

"High quality service levels will not be maintained when there is an expectation of layoffs or diminished benefits," the union group said in a statement.

Bloomberg closed the multibillion-dollar deficit inherited from former Republican Mayor Rudolph Giuliani with temporary sales and income taxes, and has said permanently raising income taxes would drive people out of the city.

But he said Paterson, who has resisted calls to boost income taxes for millionaires, may be forced to do so because of the magnitude of the state's budget deficit.

City Comptroller William Thompson, a Democratic mayoral contender, said that instead of raising sales taxes and hitting the poor, the city should instead temporarily hike income taxes for those who earn at least $500,000 a year.