NY mayor orders more than 6,000 layoffs over 18 months

New York City Mayor Michael Bloomberg in a file photo.

NEW YORK (Reuters) - New York City Mayor Michael Bloomberg announced $1.5 billion in budget cuts and layoffs on Thursday, saying the actions will narrow the city's budget shortfall for the upcoming fiscal year to $2.4 billion.

The mayor's November Financial Plan update includes 889 layoffs this fiscal year, which ends June 30, and an additional 5,312 layoffs in the next fiscal year. In addition, the city will leave vacant 1,213 positions this year and almost 3,000 vacant positions next year.

"We face a significant challenge for next year, as federal stimulus dollars run dry and the city still suffers from the impacts of the national economic downturn," Bloomberg said in a statement.

Bloomberg said the plan reflects an expected $1 billion increase in pension expenses beyond what was projected in July's budget, as well as a $180 million increase in the cost of the city's Medicaid obligations.

Speaking to reporters later on Thursday, City Council Speaker Christine Quinn expressed concern the cuts would "fall disproportionally on the most vulnerable New Yorkers."

"We must look harder at how agencies are managing operations and where the city can find alternative savings in order to reach a fiscally responsible budget and meet the needs of New Yorkers," Quinn said.

By law, the mayor requires city council approval to increase spending, but not to decrease spending.

According to the mayor's plan, the Department of Education will see its funding cut by $350 million along with the loss of 6,166 teaching positions.

"This is serious news - but last year we had a similar problem and by working together we solved it without layoffs," said teachers union president Michael Mulgrew.

The mayor's plan also reduces nearly $30 million in subsidies to libraries and cultural institutions, resulting in approximately 190 layoffs at cultural institutions. The police department will lose 350 civilian positions while 51 correction officers will be cut.

In January, the mayor will present his preliminary budget for the next fiscal year.

(Additional reporting by Bernd Debusmann Jr.; Editing by Diane Craft)