NEW YORK, NY November 14, 2002 — Mayor Bloomberg is releasing his plan to close a one billion dollar deficit this year. The mayor intends to raise property taxes. But he also proposed a new tax on commuters. WNYC's Beth Fertig has more.

For months, mayor Bloomberg has been warning New Yorkers that the city's fiscal crisis is so large - tax hikes are unavoidable. Yesterday, the mayor said New Yorkers can't solve the problem alone.

BLOOMBERG: What we're trying to do is say that everybody that works in the city benefits from all of the services, and it is only equitable that everybody pays some share of that.

Bloomberg's plan is to make everyone who works in the city pay the same personal income tax - which now applies only to residents. This would net an extra 1 billion dollars next year. The administration is proposing a maximum tax rate of 2 point 7 percent. That's five times higher than the old commuter tax, which was abolished in 1999. But it's less than what city residents are currently paying. Bloomberg says that should soften the blow for residents of a property tax hike that sources say could go as high as 25 percent.

City Council leaders are wary about raising property taxes too much. But they've long been pushing to revive the commuter tax. Councilman Peter Vallone Junior of Queens called the mayor's proposal inventive.

VALLONE: Putting a personal income tax surcharge on out of city residents may be a politically palatable way for the upstate leaders not to renege on their promise to reinstate the commuter tax.

Governor Pataki repeatedly opposed the commuter tax before the election. But yesterday, a spokesman didn't dismiss Bloomberg's proposal outright. Nor did an aide to Republican Senate leader Joseph Bruno. Assembly Speaker Sheldon Silver says he's willing to reconsider the tax.

SILVER: At this time it is appropriate to put it back. Because the city has slid into a revenue shortfall.

The Democrat urged the Mayor to lobby his Republican friends. It seems he's already begun. A few weeks ago, Bloomberg invited both Silver and Bruno to his house in Bermuda.

Of course, he can't do that with everyone. At Grand Central Station yesterday, Rosemary Shouler, of Harrison, literally gasped when she heard about the mayor's tax plan.

SHOULER: For us who live in Westchester it's bad enough we pay a town tax, a county tax, a state tax, so you know and now we have to carry the burden of the city tax because we happen to commute in and work in the city, I think it's upsetting.

But Gerry Moss, of New Rochelle, was much more forgiving.

MOSS: We're in the city 8-10 hours a day taking advantage of all the services, police and firemen available all over the place and garbage pickup, etc. So I think it's the least we can do.

Budget watchdogs say the city needs to find new revenues because it's already relied too much on borrowing. And cuts alone aren't enough. But with the city's economy already shaken, there's a risk to raising taxes too much says Diana Fortuna, president of the Citizens Budget Commission.

FORTUNA: I'm not saying there's an effect tomorrow or an automatic formula that translates into jobs but there's without a doubt it has a bad effect. And we're out of line on the spending side and we have to think about taking on some of those tough political issues.

The mayor will tackle those political issues today when he also releases plans to cut nearly a billion dollars from city agencies including education and fire. As political leaders struggle to protect these services, even those who normally oppose tax hikes say they're now inevitable. James Oddo is the city council's Republican minority leader.

ODDO: Government has cried wolf many times over the past decades. And now the wolf isn't at the door the wolf is looking through your refrigerator and took a nap on your bed and is on your couch watching the West Wing.

And with a projected deficit next year of six billion dollars he says, that wolf won't leave any time soon. For WNYC I'm Beth Fertig.