Mayor Michael R. Bloomberg and City Council Speaker Christine C. Quinn today announced an agreement on the Fiscal Year (FY) 2010 New York City Budget. The $59.4 billion plan balances the budget despite the impacts of the national recession, which include a decline of nearly $5 billion in tax revenue, while maintaining core City services. Actual expenditures in FY 2009 will total $60.9 billion. The FY 2010 budget was balanced through: a cumulative total of more than $3 billion in agency gap closing actions that began 18 months ago; using surpluses saved from periods of economic growth; healthcare savings reached through an agreement with the Municipal Labor Committee and $887 million in requested revenue changes, which include an increase in the City sales tax, closing corporate tax loopholes and applying the City sales tax to currently untaxed energy purchases. Additionally, the budget includes changes to City tax policy that would reduce the tax burden for 44,000 local businesses. All of the changes in City tax policy require authorization from the State.

The budget deal reached eliminates 16 proposed firehouse closures across the city.

“By saving billions during the good times, and cutting expenses when the first storm clouds gathered, we were as prepared as possible for the serious impacts of the national economic downturn,” said Mayor Bloomberg. “Just like every family that is tightening their belt during these tough times, we are reducing City spending while still protecting the core services that so many New Yorkers rely on – and that keep our City so strong. Balancing this budget required everyone to be a part of the solution, and now the only remaining piece of the puzzle is getting cooperation from the State. It is imperative that our leaders in Albany come to an agreement to pass bills that will allow this budget to go into effect.”

The tax policy changes included in the budget agreement are: an increase of 0.5% in the City Sales Tax, a repeal of the Clothing Tax Exemption for clothing items priced over $110, applying the full City Sales Tax to electric and natural gas customers that purchase energy from non-utility companies and a tax conformity package, which includes loophole closers, that will bring City tax policy more in line with State policy. The conformity package will produce immediate new revenue but will also eliminate or reduce the Unincorporated Business Tax for 17,000 unincorporated small businesses and reduce taxes on 27,000 business headquartered in New York City by moving to a Single Sales Factor of taxation.
 
The budget deficit for FY 2011 is currently estimated at more than $5 billion.

(Dov Gordon – YWN)