“For the first time in the city’s history, the budget for an upcoming fiscal year already has been balanced for an incoming mayor, before he steps into office,” said Mayor Michael Bloomberg last week, when he released the city’s first quarter budget modification, which maintains balance in the current fiscal year, 2014, and balances the upcoming fiscal year, 2015.
“This historic accomplishment is the result of New York’s continued economic growth, our administration’s fiscal discipline and the significant savings we have achieved in recent months. And let me add that we have reached a balanced budget without proposing any tax increases or cutting essential services,” he added.
When Bloomberg was inaugurated in January 2002, he planned to close a deficit of $6.4 billion after 9/11. New York City’s commitment to sound financial management by saving, not spending resources, allowed the city to avoid major cutbacks to essential city services. New health care contracts and reforms in pension funds for city workers helped the city cushion the blow delivered by inflation.
As a result, the budget deficit for fiscal year 2015 has closed without any taxes having been raised or critical services eliminated, and the budget maintains a labor reserve to settle expired union contracts by funding reasonable raises going forward, some starting this year.
“The next administration does not have to go and cut services,” Bloomberg said. “If they want to add services, add employees or increase compensation, they’re going to have to find other sources of revenue.”
City unions waited out Bloomberg’s term to negotiate a more favorable deal with his successor. Mayor-elect Bill de Blasio, a labor union ally, has not pledged to deliver retroactive raises, which would cost billions of dollars, according to the nonpartisan Independent Budget Office.
De Blasio’s spokeswoman said the mayor-elect is in the process of reviewing the budget. He is set to take office on Jan. 1.