Budget Plan Shorts City
Mayor Says Spitzer Broke Aid Promises

By RICHARD STEIER

In his sharpest criticism of Governor Spitzer to date, Mayor Bloomberg Jan. 28 said his budget proposal had reneged on earlier commitments to the city and would force painful cutbacks unless state legislators intervened.

'TALK ABOUT CHUTZPAH': Mayor Bloomberg delivered uncharacteristically harsh criticism of Governor Spitzer's budget plan, saying he had reneged on prior aid commitments and was socking the city with an added charge for administering personal income tax collections even though there's been a decline in the amount of work the state has to do in that area.

Noting, as he often did during the administration of Mr. Spitzer's predecessor, that the city gives the state $11 billion more each year in tax revenue than it receives in aid, the Mayor said it was being shortchanged on revenue-sharing and education funding despite previous promises by the Governor.

'Inequitable Cuts'

He called on legislators "to prevent more than $100 million worth of inequitable funding cuts and cost shifts in the current and coming fiscal years in the area of human services."

One area where he said Mr. Spitzer sought to evade prior commitments was in covering the capital costs of modernizing and replacing some decaying city public schools, even though a deal was reached on that subject as part of the settlement of the Campaign for Fiscal Equity case.

While the proposed state budget increases operating aid to education for the city, funds for school capital improvements are "noticeably absent," Mr. Bloomberg testified in Albany before the finance committees of both houses of the State Legislature.

GOVERNOR SPITZER: 'Time for tough choices.'

"New York City taxpayers have agreed to put $6.5 billion into school construction over five years," the Mayor said. "The state promised to match that. If the state doesn't match it, it simply means we're going to build and renovate half the number of schools."

He also expressed annoyance with the Governor's position on revenue-sharing. Last year the city was the only locality that was denied a portion of those funds under Mr. Spitzer's proposed budget, and the $20 million that was eventually provided was well short of its rightful share. "A commitment was made in law," Mr. Bloomberg noted, "that we would get our full share of funding in the next budget."

But under the latest spending plan, he continued, "we're budgeted to receive only half of what we're due," even as other localities receive increases from last year's allocations. "Well, New York City doesn't need another IOU. We need $164 million in revenue-sharing funds that we're being shortchanged in the executive budget, and we're counting on the Legislature to make good on the state's promise to our city."

He also noted that the city was "being asked to cover another $32 million in administration and professional evaluation costs for pre-K special education youngsters. Traditionally, the state has borne these costs."

'Costs Down, Fee's Up'

Mr. Bloomberg also took umbrage with a proposed $10-million increase in what the state charges to administer the city's personal income tax, a year after the charge was raised from $40 million to $70 million. He pointed out that the city had not gotten a reduction in this fee after the state eliminated the commuter tax, although that sharply cut into the number of those having city taxes deducted from their paychecks. And "more and more New Yorkers are filing their income taxes electronically, which means that administrative costs should be going down, not up," the Mayor declared. "Talk about chutzpah; some things just defy description."

The Governor opted not to engage in a full-scale confrontation with Mr. Bloomberg, instead releasing a statement pointing out some of his proposed increases in aid to the city, including a $539-million boost in school operating aid that was agreed to under the CFE settlement.

'Must All Tighten Belts'

Noting that the "economic storm clouds that hang over our nation and this state call for hard choices and shared sacrifice," Mr. Spitzer said, "I understand the city did not get everything it wanted, but rocky economic times mean that every recipient of state funds must share the responsibility of across-the-board belt-tightening."

Mr. Bloomberg, a registered independent since last year, has generally maintained a friendly relationship with Mr. Spitzer, a Democrat, and while he was a member of the Republican Party he refrained from criticizing Gov. George E. Pataki directly even when he was upset with state funding plans.

Veteran political consultant George Arzt, asked whether the Mayor's sharper and more direct criticism was part of an effort to shape his image as a prelude to launching an independent run for President, said it likely stemmed from more immediate concerns.

'Worried About Legacy'

"He needs state help to close the gap because without it, in his mind the cuts [the city would have to impose] would be draconian," Mr. Arzt said. "I think he believes his legacy as a good manager is being threatened by the lack of state aid. I think [city Budget Director] Mark Page told him these cuts will really hurt the city."

He added, "I think there's some presidential tenor in that speech, but as of this week, at least, I don't think there are many people who believe he's running."

During his legislative address, Mr. Bloomberg also called on Albany lawmakers to give the city the lion's share of the nearly $2 billion it expects to reap during the next four years from the merger of the Health Insurance Plan of Greater New York and Group Health Incorporated.

Repeats Warning on OTB

He reiterated his threat to disband the operations of the New York City Off-Track Betting Corporation unless changes were made in the law to allow it to keep enough of what it reaps from betting handle that it will not need a city subsidy to cover its costs.

"It's going to be a [revenue] source for us or we're going to close it," Mr. Bloomberg said, acknowledging that 1,500 jobs could be lost.

While he said it was "not tolerable" to have to pay for a "bookie operation," Mr. Bloomberg suggested that Albany lawmakers consider combining OTB operations statewide with on-track horse-betting entities.