Bloomberg and Council Reach Deal on Budget

Bloomberg and Council Reach Deal on Budget

By DAVID W. CHEN and MICHAEL BARBARO

Published: June 27, 2008

With a legal deadline four days away, city officials brokered a deal on Thursday night on a $59.1 billion budget that would preserve a popular tax cut for homeowners and a $400 rebate and add $129 million in education spending to what had originally been proposed.

Over all, the size of the budget for the fiscal year that begins in July is essentially unchanged from the current one. But during a news conference in the City Hall rotunda, Mayor Michael R. Bloomberg and the City Council speaker, Christine C. Quinn, said they were not able to provide as much money as they would have liked for some cultural and social programs. And they repeatedly warned that the current economic downturn threatened the following year’s budget, thanks to the rising price of oil, a falling stock market and other troubling indicators.

“I don’t have to tell anybody here that this is a difficult time and the forecasts are worrisome,” Mr. Bloomberg said. “With so much uncertainty in the local and national economy, we need to show fiscal restraint just as families across the city are doing.”

Ms. Quinn added, “As much good news as there is in this budget, there is bad news for some people.”

The deal came as a relief to lawmakers and administration officials, who had worried that the city might not make the legally mandated July 1 deadline. But the relative austerity of the budget deal disappointed many of the housing, legal, health care and other advocates who had become a regular fixture on the steps of City Hall all week.

Details are expected to be released in the next day or two, and the City Council is scheduled to vote on the budget on Sunday night.

During the news conference, Mr. Bloomberg and Ms. Quinn offered a few of the highlights. The New York City Housing Authority would receive $18 million more than Mr. Bloomberg proposed in May. Libraries would continue to be open six days a week and not five as was originally suggested.

The city’s capital budget would be trimmed by 20 percent. All agencies would absorb across-the-board cuts in operating expenses. And financing for City Council-sponsored programs, now at the heart of a federal investigation, was cut by 38 percent. There would also be less money to pay for security guards at cultural institutions, and a chess program for schools was cut.

The budget also eliminates civilian positions in the Fire Department and eliminates unfilled positions in the Police Department.

“Everything was given a little haircut,” said Councilman David Weprin, the chairman of the Finance Committee.

Initial reaction was mixed.

“I am disappointed that with a $4.5 billion surplus, the mayor forced the Council to cut funding for essential services, including homeless prevention, legal and mental health services, and workforce development,” said Councilman Bill de Blasio of Brooklyn. “In addition, the New York City Housing Authority, which is in dire financial straits, will be forced to shut senior centers and youth programs across the city. The mayor should not have put the city in this situation, and these cuts will be deeply felt for years to come.”

“This is a bad day for seniors,” said Bobbie Sackman, the director of public policy for the Council of Senior Centers and Services, who estimated that the budget would reduce spending on travel, housing, food, H.I.V. testing and other services by a total of $19 million.

Throughout the process, the mayor and the Council seemed to be living in different fiscal universes. While Mr. Bloomberg called for financial austerity in the face of a rapid downturn in the economy, the Council accused him of overstating the city’s woes, pointing to a big surplus in the 2008 budget.

Talks between both sides began to sour two weeks ago, after Mr. Bloomberg announced on his weekly radio show that the city might have to scrap a popular property tax cut for homeowners.

The mayor said that the 7 percent tax cut, put in place in 2007, might not be justifiable given job losses on Wall Street and an unexpected $700 million bill for a retroactive raise given to 23,000 police officers in May.

Almost immediately, the Council united to oppose the measure, turning what had been described as amicable talks into a bitter stalemate.

At one point this week, the negotiating team for the Council broke off talks to highlight their frustration.

One councilman, Lewis A. Fidler of Brooklyn, stormed into the press room at City Hall and accused the mayor of playing “a nasty game of chicken” with the property tax proposal, which would amount to a tax hike.

“He’s looking at his last year as mayor, and he doesn’t want to go out with an unmanageable situation,” Mr. Fidler said.

On Thursday afternoon, the atmosphere was so tense that when Mayor Bloomberg walked out of City Hall and headed toward his car, he barely acknowledged the calls of children who had convened on the steps with their parents to decry overcrowding in public schools.

At the news conference, Mr. Bloomberg and Ms. Quinn even forgot to do the traditional handshake and kiss. When a reporter asked what had happened, they returned. Ms. Quinn said “Take two,” and the two performed their duty.

Fernanda Santos contributed reporting.