And economists point out that service cuts can have an equally deleterious effect on local economies, both by cutting into people's spending money and by making the city a less pleasant place to live. "Taxes matter, but so do services," says Turetsky. "It's the full basket that affects people's decisions about living or running businesses here."
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Speaking of services, those who provide them may bear much of the burden of the city's proposed cuts. The mayor's 2010 gap-closing plan calls for a reduction of 891 employees, most through attrition but 252 through layoffs, at Housing Preservation and Development and the Department of Finance, and in libraries and cultural institutions. In the coming year there would be another 834 layoffs, in those same areas and at the Department of Health and Mental Hygiene. City employees who keep their jobs could also be facing smaller salary increases, as the mayor would set aside less money in the city's labor reserve fund for future collective bargaining increases.
In exchange for pay raises, the mayor is also asking unions for givebacks in health insurance – such as higher co-pays – and productivity. Finally, the mayor’s office notes that instituting a new pension tier – one with lower contributions for new city employees – would save the city $200 million a year. Such a change would require state government approval, but the budget presents city employees with a difficult choice: Close the budget gap with lower pension contributions, decreased benefits, or smaller raises.
That has unions representing city employees up in arms: They argue for other cuts, or generating revenue through a gas tax, for example. Norman Seabrook, president of the Correction Officers’ Benevolent Association, said city employees’ unions should be wary of setting a precedent for concessions. “Unions have got to stick together,” he said, “and not be picked apart by the city of New York by setting a pattern that will cost every other union and its members an increase that they so rightfully deserve.”
Building capital
The city's capital budget would rise to $39.1 billion under the mayor's proposal -- up $791 million, or 2 percent, over the plan that was adopted last June. The vast majority of the increase, $737 million, is city money, and the rest is state and federal funding, which some capital projects receive.
Relatively small additions and subtractions, and delays and fluctuations in projects being funded, are a routine part of the capital budget process, says Turetsky – but the size of the budget, and the proposed increase, are noteworthy.
"Even in a tough budgetary period, the city is continuing to spend at a fairly high level," Turetsky says. "Nobody's going to call $39 billion small change."
One of the city's fastest-growing costs, he adds, has been debt service -- and perhaps the easiest way to reduce debt service is to reduce the amount of debt incurred. So, in a year in which the mayor is seeking major cuts, is increasing the capital budget a surprise?
"Some people would be surprised. Some people would be relieved, depending on your point of view," Turetsky said. "A lot of people would argue that the city has no shortage of needs, whether you're talking about new schools, road repair or affordable housing."
Additional reporting contributed by Jake Mooney and Helen Zelon.
