Release #258-97

Contact: Colleen Roche (212) 788-2958 or Deirdra Picou (212) 788-2971

(City Hall) With the largest revenue surplus in the City's history, Mayor Rudolph W. Giuliani today released the City's Executive Budget for Fiscal Year (FY) 1998 which proposes increased investments in education and quality of life initiatives; targeted tax reductions to stimulate private sector job growth; and reductions in the gap. New York City will finish FY1997 with excess revenues totaling $856 million.

"Our budget strategy over past four years has set a new direction for our City," said Mayor Giuliani. "We have significantly reduced the growth of City spending and the size of government.

"Businesses, which once fled New York City, are coming back. Private sector jobs are growing. Tourism is booming. Crime is down in record numbers. The streets are cleaner. And we're putting more money into schools to teach our children to read, to move them toward computer literacy, and to help them appreciate the beauty of the arts.

"A budget is more than numbers and calculations. It represents the framework for the future for our great City. But above all, it's a blueprint for helping every family in every neighborhood of this City," the Mayor added.

The Mayor outlined examples of what this budget means to average New Yorkers:

• One City/One Fare: A Bronx resident who commutes to work in Manhattan by bus and subway currently pays $6.00 in fares per day. With One City, One Fare beginning July 4th, the commuter will pay only $3.00 per day and will save $750 annually.
• Elimination of Sales Tax on Clothing: A Queens family with two children and an annual income of $40,000 will save $100 annually with the elimination of the 4% City sales tax on clothing items under $500.
• Project Read and other Education Initiatives: A second grader in P.S. 72 in Harlem will have new textbooks because of the $70 million increase in textbook funding. Moreover, because of Project Read, a $125 million initiative, this student will receive 6 additional hours of intensive reading tutorials per week. In addition, the reinstatement of a full Arts Education curriculum, 25 years after its discontinuance, will allow this student to explore and expand her creative abilities. In the future, this student will have computers in her classrooms because of Project Smart School.
• Programs to Help Seniors: A senior citizens couple with an income of $20,000, renting an apartment in Parkchester currently paying $600 per month in rent, whose rent increase 3%, will receive annual Senior Citizens Rent Increase Exemption (SCRIE) benefits of $216. If the senior citizen couple owned their apartment they would be entitled to $350 annual under the Senior Citizens Homeowner Exemption (SCHE) program. In FY 1998, $109 million is set aside for these 2 programs.
• Reduction in the Coop/Condo Real Property Tax: A coop apartment owner in a Park Slope brownstone will receive a $108 reduction in FY98 in real property tax due to a Class 2 property tax relief program. In FY 1998, $70 million is set aside for this program.
• Elimination of the Commercial Rent Tax: A resident of Staten Island who owns a pizza restaurant no longer needs to pay the Commercial Rent Tax. This saves $1,200. In addition, since the creation of the Trade Waste Commission, the restaurant is saving $6,000 annually on private carting costs.
• Reductions to the Hotel Occupancy Tax: A Manhattan hotel worker who resides in Brooklyn is no longer on public assistance because the reduction in the hotel occupancy tax has spurred the growth of the City's travel and tourism business. Since 1993, visitor spending has increased 27.4% and five new hotels have been built or are under construction. In the last four years, 4,500 new hotel/tourism jobs have been created.

"Today, however, we face our most critical decisions," said the Mayor. "The key to our future rests with the choices that are made today as the City is realizing additional revenues.

"The mistakes of past excess spending will not be repeated. This budget reinvests much of our additional revenues in gap reduction and tax reform to stimulate economic growth and private sector job creation. We will also spend wisely to meet the needs of the City, to help our schools and to improve our quality of life, said Mayor Giuliani.

While much of the increase in tax receipts can be traced to the performance of the securities industry, the City's economy has produced gains in the retail trade sector, the hotel and tourism industry and in business services, with private sector employment higher than previously forecast in every borough.

Active and disciplined management of the City's operating budget during FY97 has allowed the City to substantially self-fund new needs through reductions in agency spending, generating surplus revenues which allows $856 million of FY98 expenditures to be prepaid in FY97.

The Mayor concluded, "I look forward to working with the City Council, the State and all New Yorkers to meet the needs of all our citizens. In this way, we can ensure New York City's future is one of hope, optimism, prosperity and sustained growth."

FY 98 BUDGET HIGHLIGHTS