New York City Mayor Unveils Belt-Tightening Budget

New York City Mayor Michael R. Bloomberg will unveil a $41.3-billion budget today with $1.8 billion of cuts as the media tycoon-turned-politician guides the city through the deepest fiscal crisis in decades.

A special $1.5-billion bond sale will be a big part of the Republican mayor’s plan to close a $4.8-billion budget gap, according to financial sources who declined to be identified. The new shortfall is $300 million bigger than the one the mayor forecast only last week.

The budget gap, which Bloomberg says requires him to cut spending on the police and schools by 7%, also is so huge because the World Trade Center attack shuttered thousands of businesses.

Though Bloomberg repeatedly has ruled out raising taxes, his new plan calls for a cigarette tax. The estimated size of the levy is anywhere from eight cents to $1 a pack, one of the financial sources said, explaining that the wide range reflected uncertainty about what the state Legislature might allow.

“We have no comment until the budget is officially released,” a Bloomberg spokeswoman said Tuesday.

The new mayor, who repeatedly has warned the city that his first budget will contain painful cuts, also will call on the city’s 250,000 workers to come up with productivity savings that would add up to about $250 million.

Another $250 million would be saved--if the Legislature agrees--by stretching out to 10 years from five years the cost-of-living increases Albany gave retired city workers.

And $100 million would be saved through early retirement, though job prospects for people who might wish to start new careers look bleak. City Comptroller William Thompson on Tuesday said 112,000 jobs were lost in the last half of 2001.

The city’s capital program, which pays for keeping bridges and roads safe, for example, would be slashed by $2 billion for each of the next two years.

Bloomberg included two major costs Giuliani never put in the budget.

The first is the extra $50 million the city will spend because the council agreed it will pay some Medicare costs for retired workers. The second is judgments and claims--the vast sums the city pays when it loses civil suits filed against it by injured citizens.

Though New York City already has around $50 billion of debt outstanding, Bloomberg wants to sell $1.5 billion of special bonds related to recovery from the World Trade Center disaster.