Contact: Colleen Roche/Curt Ritter (212) 788-2958
"Five years ago our Administration was handed a budget which presented the City with its greatest fiscal crisis since the 1970s," said Mayor Giuliani. "Since then, New York City has become a leader in preparing responsible budgets. Today we serve as an example to cities across the country that an adherence to the basic principles of fiscal stability and accountability can bring a City out of the red.
"The cornerstone of our success has been controlling the growth of spending and keeping it under the rate of inflation. Since 1994, the City has lowered projected spending by $13.3 billion. Following the creation of the Budget Stabilization Account two years ago, the City continues to be prepared for any downturns or slowdowns in the economy. When the stock market was losing 18 percent of its value near the end of last year, the City remained fiscally sound because we were prepared to handle it," the Mayor continued.
"After another year of unprecedented revenues, we remain committed to reducing the out-year gaps, cutting taxes to stimulate job growth and increasing spending in strategic areas to improve the quality of life for all New Yorkers.
"Since the adoption of the FY99 budget, the City is now forecasting additional resources for FY00 of $3.5 billion," the Mayor added. "For the third year in a row we have produced a budget surplus. We will not repeat the mistakes of the past: seventy-five percent of this money will be used to reduce the out-year gaps; 15 percent will fund targeted educational, public safety and other initiatives; and an additional 10 percent will be used to reduce taxes even further.
"New York City is stronger today then its has been in many years. I hope this is the legacy that we will leave future administrations - never to forget the impact of the budget on the larger economy of the City and on the quality of life of New Yorkers. Budgets are not about numbers, or balancing equations - they are about making the decisions that will strengthen and secure the economy and the lives of New Yorkers for generations to come," the Mayor concluded.
OUT-YEAR GAPS
To reduce the out-year gaps, the City has imposed fiscal discipline on the rate
of growth of City spending which has, over the last six years, been held below
the rate of inflation. For FY00 the proposed City-funded spending actually decreases
from FY99 levels by 0.3%. This Plan includes a Budget Stabilization Account
for FY99 of $1.6 billion in addition to a budgeted reserve of $100 million.
This is the largest amount of budgeted reserves ever maintained by the City.
The Plan also includes $345 million in reserve from the proceeds of the sale
of the Coliseum. Instead of using this resource to balance next year's budget,
we have funded the Budget Stabilization Account for FY00 with $345 million from
the sale.
JOB GROWTH
In 1998, New York City experienced its strongest private sector job growth on record, with the creation of over 84,000 jobs. In addition, since 1993 New York City has created 292,900 new private sector jobs and has outpaced the rest of the State by 5% with a job growth of 10.6%.
TAX CUTS
Since 1994, the Mayor has reduced taxes by $2 billion -- more than any administration
in the history of the City. In 1998 the City's tax burden has fallen to 7.8%
as a share of personal income -- lower than in the years leading up to the fiscal
crisis. The creation of the Tax Reform Task Force will look to further reduce
the tax burden on New Yorkers. The Task Force's goal is to make the tax structure
in New York City and State more competitive with other large cities and to study
ways of streamlining the number of - more - taxes levied on businesses and individuals.
To assist the Task Force, the City has reserved another $100 million for tax
reductions. Combined with the $2.3 billion in tax cuts already enacted, this
Financial Plan will bring the total value of the Mayor's tax reduction program
to $10.4 billion through FY03. With tax cuts already enacted and those proposed
($338 million), taxpayer savings will double from $1 billion to $2 billion annually.
Additional tax cuts proposed in this Financial Plan include:
IMPROVING THE QUALITY OF LIFE
This Plan demonstrates the Administration's commitment to improving the quality
of life for all New Yorkers. To ensure the continuation of the City's historic
reductions in crime, 1,500 new police officers will be added to the New York
City Police Department through the six-month acceleration of the FY 2001 police
recruit class. These additional police officers will enable the Police Department
to enhance enforcement in the following areas: drug abuse, domestic violence,
gun related crimes and property crimes.
EDUCATION INITIATIVES
The Fiscal Plan will continue to meet the educational needs of New York
City's children. This Plan will provide the Board of Education (BOE) with
its largest Capital Plan ever. The City will provide $5 million over two years
to the BOE to facilitate Chancellor Rudy Crew's sponsorship of Charter Schools
in New York City. In addition, the City has added $12 million over three years
as an incentive for Community School Districts to provide parents with vouchers
that can be used at any school, public or private. In addition, a large percentage
of tobacco settlement money will be used to build new schools and expand the
number of school seats. Any New Yorker whose reading, writing and math skills
need improvement before they attend college should be able to receive that
instruction anywhere, not just at CUNY. State and City dollars used to subsidize
remediation at CUNY should be made available to students as vouchers so that
the student can choose the school they think will provide them with the best
chance of success - whether it be a CUNY Community College or a private educational
institution. -over- The Fiscal Plan also calls for continued funding of several
educational initiatives to ensure their continued success, among them:
SUBSTANCE ABUSE-FREE LIVING
The City will continue to help substance abusers become drug-free, employed
and self-sufficient. The Human Resources Administration (HRA) and the Health
and Hospitals Corporation (HHC) will receive $11 million in FY00 and $16 million
in FY01 to expand and improve substance abuse services. HRA will use its portion
of the funding to develop intensive case management contracts for substance
abusers. HHC will expand methadone-to-abstinence drug abuse programs. The
City will also seek to take over all State-run substance abuse contracts to
create a cohesive Citywide substance abuse treatment system.
TOBACCO SETTLEMENT
Following the $200 billion nationwide tobacco settlement in 1998, New York
City will receive over the next 25 years an adjusted $6.7 billion of payments
from the four largest American tobacco companies. Tobacco settlement bonds
funded from this source will enable the City to fund its capital needs, particularly
for schools, through January 2002, when the State constitutional amendment
increasing the City's capacity to issue General Obligation debt could become
effective. Tobacco bonds will finance $2.5 billion in the City's capital program
over the next four years with money from tobacco companies. These funds will
be used primarily to fund school construction and rehabilitation. A total
of $4.9 billion in debt service will be paid by tobacco companies instead
of by the City.
ACCOUNTABILITY IN CITY SUBSIDIES FOR CULTURAL INSTITUTIONS
In line with the Administration's emphasis on accountability and private responsibility, the City will revise the way it provides funding to cultural institutions and cultural programs. The City will reinstitute the Cultural Challenge. Five million dollars will be awarded to institutions and programs on a competitive basis and this will help leverage more private donations and result in better exhibitions and programs. The Administration will also require that institutions and programs raise significant funds for their operations if they want to receive City subsidies or grants. To give institutions and programs time to plan and adapt to this requirement, the City will phase in thresholds. In FY00 a private funding requirement will be established at a level of 25%. In FY01, this requirement will be increased to 50%. The result will be better public/private partnerships with strengthened cultural institutions and programs that are more efficient and responsible.
CAPITAL EXPENDITURES
The Fiscal Year preliminary Capital Plan provides a total of $22.2 billion in capital funding over the next four years. The Capital Plan demonstrates the Mayor's continued commitment to strengthening the City's economy by emphasizing infrastructure rehabilitation. Over half of the funding provided in the Plan, a total of $11.9 billion, will be devoted to improving the City's transportation, mass transit, water and sewer and sanitation systems.
Among the projects included in the preliminary Capital Plan are:
* | New Queens Hospital Center | $148 million |
* | Hudson River Park | $ 98 million |
* | Willis Avenue Bridge Reconstruction | $ 94 million |
* | New Kings County Hospital | $ 90 million |
* | Brooklyn Sportsplex & Minor League Baseball Park | $ 50 million |
* | Citywide Street and Park Tree Planting | $ 35 million |
* | Minor League Baseball Park in Staten Island | $ 29 million |
* | City Hall Park | $ 22 million |
MAJOR CULTURAL EXPANSIONS
The City will be a partner in a number of world-class cultural construction projects that will enhance our position as the Cultural Capital of the World and help attract more tourists than the record 34 million who visited the City this year. These projects will significantly improve the City's cultural base, strengthen the City's economy and provide lasting cultural monuments for generations to come.
Among the projects included in the major cultural expansions are:
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