Spending Cuts Needed To Avert NYC Cash Crunch

CBS 2 - November 17, 2009

by Jay Dow

NYC Budget Crisis Trickles Down To Local City Agencies

NEW YORK (CBS) - It's day two of a special session in Albany, with Governor David Paterson and state lawmakers trying to hammer out a deal to close the budget gap.

There's not much optimism, and that's not good news for the city.

Trouble trickles downhill, or down state, especially when it comes to New York's fiscal crisis.

The results: potentially devastating cuts on the local level that could lead to city fire houses closing, a downsized police force and slashed educational programs.

It's the seventh time the Bloomberg administration has ordered budget cuts, so this latest round -- $1.75 billion worth – could be extra painful.

Agencies have been asked to cut another $550 million in spending this year and $1.2 billion for the 2011 fiscal year that starts July 1. The hits to the big three agencies – fire, police, and education – are less than other city agencies, but with the city forced to cut its budget time and time again because of the financial crisis, none of the cuts will be easy.

Sources told CBS 2 there could be layoffs of city workers, the reduction of the size of the city work force through attrition, and the elimination of programs. But budget director Mark Page told commissioners: "We need to find ways to revise the services we provide and how we provide them, to achieve long term cost containment without impairing the quality of life we are able to provide to the people and businesses of New York City."

State officials say although Wall Street is recovering faster than the national economy, the economic engine for the city and the state will not save the day.

Governor Paterson says the time for gimmicks is over.

"This is not a joke, this is not a game. The future of our financial condition and the prospect of our population rests on us seriously finding ways to cut the deficit now rather than making up an excuse everyday why we're not doing it," said Paterson.

CBS 2's Marcia Kramer contributed to this report.