NYC Sets Tax Hike to Offset Deficit

The City Council and the mayor have reached a tentative agreement on an 18% property tax hike to help fill a $1.1-billion budget deficit, Council Speaker Gifford Miller said Saturday.

Mayor Michael R. Bloomberg had proposed boosting property taxes by 25% to help balance the budget for this fiscal year, which ends June 30. But the City Council opposed such a large increase, administration officials said.

A vote on the agreement is expected before Thanksgiving, city officials said.

The tax hike would take effect in January.

“We don’t pretend it’s a painless measure. It’s a painful measure,” Miller said. “But when you are hemorrhaging money, you have to take painful measures.”

City Council members also agreed to find $844 million in savings through service cuts and debt re-servicing, Miller said, but the details of where the savings would come from differed somewhat from a plan Bloomberg released this month.

The tentative agreement calls for restoring some funding for libraries, the City University of New York, plus child-care programs and foster-care programs.

The plan also puts on hold Bloomberg’s plan to close eight of 478 fire companies.

Instead, Miller said, a commission will be appointed to study how the Fire Department can save $2.2 million, including determining which -- if any -- firehouses should be closed.

Bloomberg spokesman Ed Skyler confirmed the agreement has been reached with the mayor “in principle.”

The city’s budget woes don’t end with this fiscal year. A budget deficit of $6.4 billion is projected for next fiscal year.