Mayor Michael Bloomberg yesterday afternoon stunned city agencies by demanding they draw up budget cuts — a mere seven weeks after he painted an extraordinarily rosy picture of a $4 billion city budget surplus.
"This came out of nowhere," said one agency boss who'd just received the memo from Bloomberg's budget director. "Aren't things really good right now?"
Actually, it seems things aren't quite as good as they were in late January. Yesterday's memo, written by budget director Mark Page, tells all city agencies — with the exception of the Department of Education — to identify cuts of 1.5 percent for 2007 and 4 percent for 2008. "We have a softening national economy, we have some volatility on Wall Street, and we have a tentative agreement with the firefighters' union that sets a pattern for the rest of the unions," Bloomberg spokesman Stu Loeser told New York. "The firefighters got roughly 4 percent, and we'd been budgeting a 2 percent increase." Which means that the police, sanitation, and corrections unions are likely to get larger raises than projected.
"Keep in mind, these are just proposals," Loeser said. "It's just identifying potential cuts, in preparation for the mayor's executive budget, which will be delivered in late April, early May."
Nevertheless, the memo has rattled nerves. "Cutting 1.5 percent in 2007 doesn't sound like a lot of money — until you stop and realize there's only three months left in this fiscal year," one agency analyst said.
"We're having a helluva time interpreting this," an agency head said. "The mayor is instinctually cautious. With other surpluses, he's put money aside for the future when things aren't nearly as good. What he proposed in January was a departure, so maybe he's coming home again."
Maybe. But speaking of homes, in January Bloomberg proposed onetime property-tax cuts of $750 million. So are those also under review? "The short answer is no," Loeser said. If you work for a city agency, however, you might not want to spend the money just yet.
CORRECTION, March 20: Bloomberg's memo was sent yesterday, not today, as this item originally stated.
Read the memo here. [.pdf]