May 6, 2011 / 2:17 PM / 8 years ago

NY mayor unveils $66 billion budget, expects layoffs

NEW YORK (Reuters) - New York City Mayor Michael Bloomberg on Friday unveiled a near $66 billion revised budget plan that does not raise taxes but instead relies on attrition and layoffs to cut about 7,000 city workers.

New York Mayor Michael Bloomberg (L) looks out a window during a news conference announcing a lease for commercial office space to the law firm WilmerHale that contains incentives for energy efficiency at 7 World Trade Center in New York, April 5, 2011. REUTERS/Shannon Stapleton

Though the city is spending the majority of its reserves, “even that will not be enough to avoid layoffs of some city employees, including teachers,” Bloomberg, a political independent, said at a news conference.

The school system, the nation’s largest with more than 1 million pupils, stands to lose about 6,000 teachers, in what would be the first teacher layoffs in decades. Elementary schools and schools in poor neighborhoods, those with staff with far less seniority, will be hardest hit.

Despite a recent upswing in revenue, Bloomberg rescinded few cuts. Most notably he found funds for 16,000 child-care slots that were slated to be cut.

New York politicians have long complained that the city sends the federal and state governments billions of dollars more in tax revenue than it gets back in aid. The problem is particularly acute now, Bloomberg said, because both Washington and Albany are closing their deficits by cutting billions of aid dollars for the nation’s counties, cities and towns.

“The disinvestments in counties and cities by the federal and state governments is not good for this country,” said Bloomberg.

He again called on the state government to permit the city to negotiate pension benefits, clashing with Democratic and Republican governors around the country who are trying to rein in pay and benefits promised to public workers by curbing their rights to negotiate contracts.

The soaring cost of the city’s pensions systems is draining money from other services, the mayor says, while New York City’s actuary is reducing the expected rate of return to 7.5 percent from 8.0 percent. This will force the city to contribute around another $1 billion to the retirement system.

Bloomberg did not retreat from plans to further trim the number of police officers and firefighters, though a fiscal monitor in March said this will compress their number to decade-lows.

“The fire department has to respond to things that were unthinkable 15 years ago, and the police department has to worry about international threats when they used to be worried about street crime; they’ve done a phenomenal job, I think we’re as ready to respond as we could be,” Bloomberg said.

His revised spending plan — about $3 billion bigger than the current budget — must be approved by the Democrat-led City Council.

Council Speaker Christine Quinn, a possible mayoral contender, said she was concerned that 20 fire engine companies will be closed and library services will be cut by 29 percent, which means most branches would only be open three days a week.

“We will propose alternative cuts to many of those proposed by the mayor,” she said.

Comptroller John Liu and Public Advocate Bill de Blasio, both Democrats, called on Bloomberg to hire fewer costly outside consultants, as did the Municipal Labor Committee, a union group.

Bloomberg predicted the city will have to close about $15 billion of deficits from fiscal 2013 to 2015.

Additional Reporting by Bernd Debusmann Jr; Editing by Padraic Cassidy

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