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Deal on $44.5-Billion N.Y.C. Budget OKd

The restoration of $115million includes money for teacher supplies, libraries.

June 26, 2003|From Associated Press

NEW YORK — City officials agreed on a $44.5-billion budget Wednesday, ending weeks of squabbling and months of fiscal uncertainty as the city scuffled its way through its worst budget crisis since the 1970s.

The deal was reached after weeks of negotiations between Mayor Michael R. Bloomberg and City Council Speaker Gifford Miller, and gives the council much of what it had sought -- the restoration of about $115 million in spending.

Back in the budget is money for such things as teacher supplies, weekend meals for seniors, libraries, child health-care clinics and college scholarships.

The council did not succeed in saving from closure six fire companies that had become the focus of intense lobbying by neighborhood groups.

The city also will proceed with about 3,600 layoffs in the Department of Education despite the council's objections.

The council is expected to formally approve the deal Friday.

The budget pact -- six days before the start of the fiscal year -- comes at one of the latest dates in recent memory. The City Charter mandates that a spending plan be in place by June 5, but the mayor and council missed that deadline as well as another June 13.

The path to a budget deal was marked by high drama, periods of lassitude and a sharp drop in popularity polls for Bloomberg, the billionaire founder of a financial information company who won office in 2001 campaigning on his business acumen.

While Bloomberg did nothing to cause the budget crisis -- which was created by a downturn in the economy and exacerbated by the Sept. 11 terrorist attacks -- the mayor was often cast as the heavy.

To reduce a projected $6.4-billion deficit, Bloomberg embarked on a series of highly unpopular measures, including laying off about 5,600 city workers, cutting spending by about $3.2 billion and raising property taxes by 18.5%, the highest jump in history.

After months of tension, the state Legislature -- overriding Gov. George E. Pataki's veto -- gave the city permission last month to increase sales and personal income taxes in a package worth about $2.7 billion to the city.

Though the aid allowed the city to close its $3.8-billion deficit, the mayor and council were unable to agree on a spending plan. Key to closing the breach was a 40-minute meeting Tuesday between Bloomberg and Miller at City Hall.

Hard times are still ahead: The city estimates a $1.8-billion gap in fiscal year 2005.

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