After six weeks of debate, the City Council approved a 7 percent property tax hike and approximately $500 million in spending cuts on Thursday to address a budget deficit that continues to widen as an economic recession grips the nation.
The property tax hike was approved by a vote of 33 to 18 with critics arguing a tax increase would further fray the empty pockets of New Yorkers.
Those who supported the increase, which was initially proposed by Mayor Michael Bloomberg in November, said the city's current fiscal crisis and the state's more than $15 billion deficit call for tough responses and difficult decisions. The council also approved a 0.875 percent increase in the city's hotel tax.
As part of the budget agreement, the administration has promised to send out a $400 property tax rebate, which it initially said the city could not afford. Residents should get their checks soon after the holiday, city officials said.
In addition to the budget cuts, the council also approved legislation allowing some union members to live outside the city's borders and a measure that discontinues alternate side parking during inclement winter weather.
The Budget
Even with all of the actions taken at Thursday's stated meeting, the city will still face about a $1.1 billion deficit in the next fiscal year. If it had done nothing, officials said, that hole would have grown to approximately $4 billion.
"The fact that 20 to 25 percent of our revenues come from Wall Street puts the impact of this crisis very, very squarely at our front door," said City Council Speaker Christine Quinn.
The hotel tax, (Intro 879) which will increase the city's rate from 5 percent to 5.875 percent, will raise an estimated $80 million in revenue. The increase will add $2.62 to the average $300 a night stay, said the bill's main sponsor, Lewis Fidler. The hotel tax was approved by a vote of 46 to 5.
The property tax increase (Intro 887) will bring in $576 million. According to the council, the average property tax increase citywide for a single family home will be $118 for the rest of the fiscal year, which ends July 1. The property tax increase will take effect January 1. As part of the hike, council members approved a 15-day extension for homeowners whose property is valued less than $250,000 to pay their bills.
In response to the council's approval of the budget modification, the mayor said in a prepared statement: "It's never popular to phase out a tax cut or reduce agency spending, but they are the right choices to avoid far greater and longer lasting pain. We will not repeat the mistakes of the 1970s, which crippled (the) city's finances and nearly destroyed our quality of life. We are taking steps to weather this storm so we can continue to keep our streets safe and clean, continue improving our schools and continue protecting seniors and the most vulnerable New Yorkers."
Negotiations over the budget revisions were far more contentious than in previous years and presented a contrast to the normally harmonious relationship between the mayor and this City Council.
Part of the debate -- and a considerable amount of the ire -- centered on the $400 rebate, which the council argued the city was obligated to send out. Also, the council vigorously opposed the mayor's plan to suspend a police cadet class, which would have eliminated about 1,100 cadets.
As part of the budget agreement approved on Thursday, the city will have both a January and July class of 250 officers each.
The mayor's order last week for departments to cut their budgets an additional 7 percent would have eliminated the summer police class, according to Quinn. The agreement, which calls for about 1,700 fewer officers than the city usually trains, is an improvement over what the mayor originally sought, Quinn said.
It was not enough for everyone, though. The chairman of the council's Public Safety Committee, Peter Vallone Jr., voted against the budget revisions because of the decrease in police officers.
Other members said the increase in property taxes would essentially rip the city's rebate check from the hands of property owners.
"How do we give with one hand $400 and take it back with a 7 percent increase?" asked Councilmember Charles Barron. "We are bleeding already."
Some members, though, recalled the city fiscal crisis of the 1970s and said it was more important to preserve key services than keep a tax break.
"Even though it won't be popular," said Councilmember Miguel Martinez, "New Yorkers will understand."
The council revised other areas of the mayor's initial proposal to save $20 million from other programs. It restored more than $5 million from a cut to the City University of New York and added $3.763 million to the Administration for Children's Services to avoid a reduction in case managers. It also allocated about $1 million to save a job center in Harlem and $424,000 for a senior abuse prevention program.
The council did not add any funding to the budget modification, but found cuts elsewhere. For example, it cut $13 million for consulting on city capital projects.
Some areas were not restored by the City Council, including a program for elderly day care as well as cuts to libraries and public housing.
Living Outside the City
After two years of negotiations, the City Council approved a bill (Intro 837) to allow members of the District Council 37, the city's largest municipal public employees union with 121,000 members, to live outside of the five boroughs if they have worked for the city for two years.
The bill was approved by a vote of 50 to 1 with Councilmember Al Vann dissenting.
Teachers and police officers already do not have to live in the city.
Members of the District Council 37 will be allowed to reside in Nassau, Westchester, Suffolk, Orange, Rockland or Putnam counties.
Alternate Side Parking
The council unanimously approved legislation (Intro 895) to suspend alternate side parking if the Department of Sanitation also suspends street sweeping. In the past, motorists have received tickets for not moving their vehicles even when ice or snow have made it difficult.
The bill would suspend alternate side for at least 24 hours after the cancellation of street cleaning.
