NYC Council spurns mayor's property tax hike
NEW YORK (Reuters) - New York City's Democratic-led Council has rejected Mayor Michael Bloomberg's proposal to take back a 7 percent property tax cut, Council Finance Chairman David Weprin said on Thursday.
Bloomberg, an independent, and Council Speaker Christine Quinn, said in a joint statement they would make a budget announcement later on Thursday. A mayoral spokesman had no immediate comment on any details.
"If we have to revisit the property tax cut at a later date, we will," Weprin told Reuters by phone.
Bloomberg on June 13 warned that the city might not be able to extend the property tax cut -- which was enacted last year and costs about $1.2 billion -- because tax revenues would plunge with Wall Street's falling profits.
The city starts its fiscal year on July 1, and the new $59 billion budget likely will be enacted on Sunday, Weprin said. The Council restored about $129 million of the mayor's education cuts, Weprin added.
"We restored a lot of the cuts, not all of the cuts," Weprin said, explaining the Council had made avoiding cuts in the classroom one of its top priorities.
Bloomberg's second and last term ends in January 2010, and he has vowed not to leave his successor facing big deficits. The mayor inherited a historic shortfall from former Republican Mayor Rudolph Giuliani in 2001. Tax revenue slid after the dot-com gold rush ended and then fell even more after the September 11, 2001, attacks. Bloomberg hiked property taxes by 18.5 percent in his first year in office.
New York City's economy shares Wall Street's often roller-coaster-like earnings cycles. The subprime mortgage crash caused banks and brokerages to write down $200 billion of losses, nearly capsizing Bear Stearns before JPMorgan Chase acquired it, according to the state comptroller.
Banks and brokerages employ less than 10 percent of the city's work force. But financial employees earn more than 30 percent of all wages and salaries in the city. And each high-paying Wall Street job creates two to three others, in sectors from restaurants to law firms.
(Editing by Richard Chang and Braden Reddall)
