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Tough Economic Times Ahead, N.Y. Mayor Says

Reforms: Bloomberg, in his first state of the city speech, details steps to curb spending to close the projected $4-billion budget shortfalls.


NEW YORK — In his first state of the city speech, New York Mayor Michael R. Bloomberg on Wednesday praised the Big Apple's recovery and spiritual resiliency after the Sept. 11 terrorist attacks, but he warned that residents will be facing tough economic cutbacks in the days ahead.

Noting that the city must close an estimated $4-billion budget gap in each of the next three years, the mayor outlined steps to shrink spending and promote reforms. Yet he conceded that several of his plans--including bringing public schools under mayoral control and reducing the money New York pays to settle lawsuits--must be approved by state legislators.

"In many cases it will be necessary to postpone plans and delay dreams," Bloomberg said, making a pointed reference to some of former Mayor Rudolph W. Giuliani's pet projects--including new baseball stadiums and an expensive refurbishing of Lincoln Center. "But we have no choice. We cannot raise taxes at this time, and the law requires us to live within our means."

During a 40-minute speech before City Council members, the Republican mayor pledged to run an open administration that reaches out to New York's diverse communities. He vowed to lobby Democratic and Republican party officials to bring their 2004 presidential conventions to New York, and said he also would push hard to lure the 2012 Summer Olympics to the city.

Calling for more development along the city's 500 miles of waterfront, Bloomberg backed construction of a bike and jogging path around the entirety of Manhattan; he also said New York should expand the number of daily commuter ferries into Manhattan from New Jersey, Staten Island and Brooklyn--noting that they have become popular with former bus and subway riders after Sept. 11.

Most of his remarks, however, focused on why the city would have to pursue a less expansionist agenda in the next four years. He repeated a call made in his Jan. 1 inaugural address for all city departments to voluntarily reduce staffing by 20%, something he already has done in the mayor's office.

"New York's municipal work force is one-seventh the size of the whole federal government, if you don't count the military," Bloomberg noted. "But our people serve 8 million citizens, and they serve 250 million. . . . We just don't have the money to continue this level of staffing."

(According to the 2001-02 city fact book, New York has 255,443 full-time employees. By comparison, the city of Los Angeles employs 34,433 people.)

Bloomberg, who amassed a $4-billion fortune in his business media information company, vowed to root out waste and inefficiencies in all city departments. A key example, he said, is the more than $500 million New York City spends annually to settle lawsuits. But cutting those costs, he noted, would require major tort law reform to be passed by state legislators.

The mayor got an ovation when he repeated his demand that the Board of Education be abolished, giving him control over public schools. He said the board "doesn't work for parents, for students, for teachers or even its members," and he urged politicians in the state capital of Albany to give him such control.

The Democratic-controlled Assembly, however--led by New York Speaker Sheldon Silver--long has refused to approve this change. And few observers expect Bloomberg to push through such dramatic reform any time soon.

Despite all the barriers, Bloomberg voiced confidence in the city's ability to bounce back from the terrorist attacks.

"We have been attacked, we have been tested and now we are on the path to renewal and recovery," the mayor said. "New York is strong. And New York is open for business."

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