Budget Deal Restores Fire Companies, Child-Care Programs Facing Cuts

Monday, June 25, 2012

Mayor Michael Bloomberg and the City Council have reached a deal on the city’s budget for next year that includes the restoration of some 47,000 after school and child care slots and 20 fire companies slated for elimination.

The child care and after school restorations will be paid for with an additional $150 million added into the budgets of the Administration for Children's Service and the Department of Youth and Community Development. A Council source says the legislative body will pay $100 million for the restoration out of its $400 million dollars in discretionary funds. As a consequence of the new funding the City may end up with 4,000 additional day care and after school slots.

"Working with our partners in the Council, we've again produced an on time, balanced budget for our City that doesn't raise taxes on New Yorkers, and that preserves the essential services that keep our City strong," Mayor Bloomberg said.

Speaker Christine Quinn said the budget deal proved "that the children of New York City is our number one priority." Quinn said that the City would move forward with the Bloomberg administration's EarlyLearn NYC program to improve the quality of the city's child care services. Although, some council members expressed concern that the new program would shut out smaller neighborhood centers that can't meet the City's new criteria.

Mayor Bloomberg said while the agreement for next year would yield a balanced budget for FY 2013, the City faces a $2.5 billion budget gap in FY 2014.

Bloomberg first announced the cuts as part of his $68.7 billion budget proposal in February. Council members were barraged by calls from constituents worried about loss of their neighborhood child care or after school programs.

"In the 20 years I have been doing this, I have never seen that ground swell at the community level," said Michelle Yanche, director of public policy at Good Shepherd Services and member of the Steering Committee on the Campaign for Children.

The budget agreement does not restore all cuts to the city’s three library system, but it does guarantee enough funding to ensure five day service by adding nearly $90 million to its budget.

The budget does assume that the city will get $1 billion from the sale of 2,000 taxi medallions even though that sale is tied up in litigation. The mayor said the city is now projecting just $635 million in the next fiscal year.

The Citizen's Budget Commission, a fiscal watch dog group, estimates the mayor and Council are balancing the budget with almost $3 billion in so-called one shots, or non-recurring revenue to cover recurring operating expenses.

"They are drawing down about a $1 billion from a trust fund they set up to pay for future retirees health insurance, which means that money won't be there when we have to pay those bills," Charles Brecher, research director, with CBC.

A spokesman for Mayor Bloomberg said the draw down on the trust fund was being applied to meeting the City's obligation for the health care costs related to retired City workers.There were also rumblings from some Council members about what they said was the over reliance on revenue one shots to cover recurring operating expenses.  

Queens Councilman Dan Halloran said he was concerned about both the reliance on the one shots and the growing budget gaps projected for the out years.

"We are going to eat through the remainder of our surplus over the next two years, which means if, God forbid, if the economic downturn continues and we don't see a massive infusion of new cash coming in we are going to be up the creek without a paddle for the next two budget cycles," he said.

The new fiscal year begins on July 1.


Correction: An early version of this story referred to firehouses. It is fire companies that have been restored.


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