NYC official: agencies must cut $1.3 billion in costs

NEW YORK (Reuters) - New York City agencies must find $1.3 billion of savings for the new budget that starts on July 1, the city's budget director said on Tuesday.

The budget director, Mark Page, in a letter to agency heads, said the police, fire, sanitation and correctional departments are being asked to trim their spending by 3.6 percent, just slightly more than the Department of Education's 2.7 percent cut.

All other agencies would have to prune spending by 7.2 percent, his letter said.

It is the eighth time in the last two years that Mayor Michael Bloomberg has pushed city agencies to wring out savings. In January he had warned that a proposed $1.3 billion cut in state aid would force him to lay off 19,000 workers.

Page in the letter said he hoped that the city would be able to soften the "worst case" scenario of $1.3 billion in spending cuts. That would require some combination of a less severe cut in state aid and a rebound in the city's revenues.

As in most U.S. states and cities, tax revenues have contracted in New York state and New York City during the recession.

(Reporting by Joan Gralla; Editing by Leslie Adler)