By Sara Kugler
ASSOCIATED PRESS
with story from Buffalo News
NEW YORK — The news is bad and getting worse, Mayor Michael R. Bloomberg warned in a sobering budget plan that seeks to steer the city through the storm by raising taxes and slashing expenses with an eye toward cutting city jobs down the road.
Bloomberg, wielding his grim budget as a weapon on Friday, threatened the city’s labor unions with 20,000 layoffs if they don’t step up to renegotiate contracts and require workers to contribute more on their benefit packages.
“You can only get so much blood out of a stone” with budget cuts and other measures, Bloomberg said. After that might come layoffs, he said. He is confronting a $4 billion deficit for the next fiscal year, which begins in July.
Labor leaders, in response, said Friday that the Bloomberg administration must find other solutions.
“We cannot be placed in a position where wages are greatly diminished by new benefit costs we are asked to assume,” said Harry Nespoli, chairman of the Municipal Labor Committee.
Bloomberg, a billionaire former CEO who is running for a third term this year, has staked his campaign on what he says is unique financial expertise invaluable to a city experiencing one of its worst economic downturns in recent history.
And no matter what anyone does now, he warned, the city and nation are facing long-term problems.
“It just isn’t, you know, ‘Go fix the economy, I’ll be back at lunchtime,’ ” he said. “These things take many years to create, many years to fix.”
Wall Street’s losses are expected to top $47.2 billion for 2008, with projections for further losses in 2009, according to the mayor’s budget office and numbers from the Securities Industry and Financial Market Association.
The commercial and residential real estate markets are slowing, after long resisting national trends.
Fewer people are flying into airports, which means that the tourism industry will likely continue to worsen, and hospitality jobs will disappear.
Tax revenues are slipping even more than analysts predicted. Economically sensitive taxes — like personal income, sales, business and real estate — are projected to fall by $5 billion in fiscal 2010, he said. Bloomberg proposes increasing the city sales tax from 8.375 to 8.625 percent, which would require state approval; some city officials advocate higher income taxes instead.
Over the next few months, Bloomberg will negotiate his plan with the City Council, with the aim of passing the final budget in June.
Council members acknowledged the seriousness of the fiscal situation, but there were indications that some of the mayor’s ideas might meet resistance. Speaker Christine Quinn said she prefers “more progressive revenue options” that are imposed based on income level.
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