With Budget Unveiling, Bloomberg Draws the Battle Lines

Following the unveiling of Mayor Michael Bloomberg's final budget, the battle lines are now drawn between the mayor and City Council — and revealing a national trend of local government being increasingly left to fend for themselves.

Bloomberg said on Friday that the city's economy and tax revenues are on the way back up and that city job growth is outpacing the nation, but he said billions of dollars in cuts from federal- and state-budget makers — combined with the explosion of city employee pension costs — left him no choice but to ax 6,000 teaching slots.    

"We are forced to do the best we can with what we've got," Bloomberg said. "The state has shifted the burden from them to us."

Although the mayor attempted to soften the impact by adding a sweetener of $2 billion in city money to public schools, the City Council was quick to push back on layoffs.

"These would be layoffs that would be immensely damaging to our education system," said Council Speaker Christine Quinn. "They would have profoundly negative impacts on children's opportunities for a quality education, and I think I speak for myself and all my colleagues when I say make no mistake we'll do everything in our power to prevent teacher layoffs."

Quinn calculated saving the teaching slots at risk would cost $270 million. At a Council hearing, DOE officials testified it would actually  cost more than $400 million.

Both Quinn and City Council Finance Chairman Dominec Recchia said they are going to put billions of dollars in outside private contracts the city has for things like computer consultants under much closer scrutiny particularly at the Department of Education.

"A lot of members feel that is time to really examine these outside contracts in much more detail," Recchia said.

Just last week, the issue of insufficient city contractor accountability and management surfaced with the indictment of a former DOE contractor for ripping the city off for $3.6 million. Council members also cite the CityTime case where contractors allegedly ripped the city off for $80 million from a project to automate the city's payroll system.

Schools Chancellor Dennis Walcott countered that DOE has already reduced outside consultant contracts by more than 20 percent over the last two years. But he did not try to sugar-coat the impact of the layoffs that could come as soon as the end of this school year.

Walcott said average class size could go up by two or three students from 25 to 28 students in the average class depend on the grade level. There would also be ripple effects from the layoffs as teachers were shifted system wide.

"All schools will feel this whether they have to lay off staff or they will be impacted by other staff coming so we have to manage this and manage it very well," Walcott said. 

United Federation of Teachers President Michael Mulgrew said the mayor is feigning scarcity and could find the money to save the 6,000 teaching slots: "If he is choosing to do this he is choosing to harm the children of New York," Mulgrew said. 

Teacher cuts are not the only flash point between the Council and mayor. Libraries take a hit and so does the Fire Department. Bloomberg's budget calls for closing 20 of the city's 361 fire companies. 

Fire Commissioner Sal Cassano said he will be looking to allies on the Council for some kind of restoration: "If we close 20 companies, response times will certainly go up even though we are doing a great job and reduced them. In many different ways they will go up."

Cassano said he has not yet identified which fire companies will be closed. For the last three years, the Council has been able to ride to the rescue but this year the demands on their discretionary budget will be unprecedented.

There were some budget bright spots. The mayor has pledged to reverse a cut of 16,000 subsidized childcare slots. And after canceling an NYPD class recruit last month, Bloomberg has funded a supersized NYPD recruiting class of 1,400 for July.

Thanks to a major lobbying victory in Albany, the city's senior centres will all stay open, and the Bloomberg budget calls for even adding three new locations.

What is starkly different this year is the degree to which both Albany and the federal government reduced their support of the city, a trend likely to accelerate. And that macro trend of local governments being increasingly left to fend for themselves is going to put tremendous pressure on municipal unions.

The city has multi-billion dollar budget gaps stretching out until 2015. For the uniform services the cost of fringe benefits and employee health care costs almost as much per employee as their annual salary.

Bloomberg said the city's pension obligations have shot up more than 500 percent since he came into office, requiring the city payout more than $8 billion for 2012 and a similar amount for every one of the next three years until fiscal year 2015.

Carol Kellerman, with the non-partisan Citizens Budget Commission, said even more than in the great fiscal crisis of the 1970s the city has to look to the unions for concessions on things like pensions. She said this year the annual budget dance between the mayor and Council has to be more inclusive.

"This time it is going to take three to tango," Kellerman said. "The council needs to work with the mayor  to bring the labor unions  into the budget dance cause that is the only place we can get savings to off-set the layoffs."