Archives of the Mayor's Press Office

FOR IMMEDIATE RELEASE
Date: Thursday, April 22, 1999		  
Release #125 -99  
Contact: Sunny Mindel/Curt Ritter (212) 788-2958

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MAYOR GIULIANI UNVEILS $35.3 BILLION EXECUTIVE BUDGET AND ANNOUNCES $2.1 BILLION BUDGET SURPLUS -- LARGEST IN CITY HISTORY

City Spending Remains Under The Rate of Inflation; Tax Cuts Exceed Out-Year Gaps For The First Time; Budget Stabilization Account Extended To FY2001 Record Surplus To Fund $405 Million In Tax Cuts; Reduce Out-Year Gaps; Enhance Education, Public Safety & Quality of Life Initiatives

Mayor Rudolph W. Giuliani today released New York City's Executive Budget for Fiscal Year (FY) 2000, which maintains and enhances the fiscal principles that have provided the City with the foundation for its longest period of sustained fiscal stability in history. After the near fiscal collapse in the early 1990s, the City is projected to finish FY1999 with a record surplus of $2.1 billion. The Mayor is proposing a FY2000 budget that has: increased spending in targeted areas while keeping City spending under the rate of inflation; cut taxes by more than $2.2 billion, bringing the total tax reductions through FY2003 to $11 billion to stimulate job growth and business investment; and reduced the out-year budget gaps by 43 percent since adoption.

"This Executive Budget continues on the course of fiscal discipline that over the last five years has helped turn New York City around," said Mayor Giuliani. "Five years ago we faced a $2 billion budget deficit and shortsighted economic policies. Today, because of the difficult decisions we made in controlling the growth of government spending, enacting targeted tax cuts and reducing out-year gaps, the City now has its largest budget surplus in history, reduced the out-year gaps by over 40 percent and created more than 300,000 new private sector jobs.

"Budgets are about more than numbers -- they have a real effect on people's lives," the Mayor continued. "This budget includes tax cuts that will provide specific relief to the lowest income New Yorkers, among them: an Earned Income Tax Credit which applies the City's savings from reducing the City's welfare rolls to lower the tax burden for these working families; an additional Back To School sales tax free week for clothing and shoes; and the elimination of the City's four percent share of the sales tax on books. This last tax cut will complement our Administration's successful programs such as Project Read and Partners in Reading, and will enhance literacy instruction for children in our schools and at home by encouraging reading in communities throughout the City.

"This budget reflects our Administration's commitment to the disciplined fiscal policies that -- in the end -- will save New Yorkers $11billion through Fiscal Year 2003 and keep City spending under the rate of inflation, while maintaining and expanding the use of the Budget Stabilization Account," the Mayor added.

"Today our New York City is a better place to live. The economy is stronger and New Yorkers are more optimistic about the City's future than they have been in many years. Our unemployment is at the lowest level since 1990, our welfare rolls are at their lowest level in over 30 years, crime continues to decline to levels not seen since the late 1960s, and we continue to cut taxes more than any other administration in the history of the City. This budget reflects our Administration's commitment to improving the quality of life for all New Yorkers, it's an investment in the City's fiscal health well into the next century," the Mayor concluded.

IMPROVING THE QUALITY OF LIFE

This budget includes targeted spending increases designed to secure gains in the quality of life New Yorkers have grown to expect over the last five years, and continues to make additional investments designed to further improve living conditions for all New Yorkers.

New York City remains the safest large city in America with overall crime down 50 percent and murder down 70 percent over the last five years. Year-to-date overall crime is down approximately 12%, but as of April19, murders have risen by 12. The Administration remains committed to creating an even safer City for all New Yorkers and in this budget will invest $32 million in accelerating the FY2001 police class into FY2000 enabling the Police Department to enhance law enforcement efforts. It also increases funds to expand DNA testing in sexual assault cases to convict the guilty and free the innocent.

In an effort to make our City streets even safer for children on their way to and from school, this budget provides $1.3 million for the hiring of 150 additional school crossing guards. In order to promote fire safety citywide, additional funding has been provided to enhance the Fire Department's fire safety education effort. With the recent enactment of the "Sprinkler Expansion" legislation, the City is further committed to reducing the number of civilian fire fatalities. Moreover, we will purchase additional ambulances to enhance our response to emergencies throughout the City.

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 to 2.1% -- below the rate of inflation. For FY2000 the proposed City-funded spending actually decreases from FY1999 levels by 1.6%. This budget benefits from the FY1999 Budget Stabilization Account of $2.1 billion, the largest surplus ever projected by the City. In addition, the FY2001 Financial Plan includes $345 million for the Budget Stabilization Account from the proceeds of the Coliseum sale, rather than using this resource to balance the FY2001 budget.

TAX REDUCTION PROGRAM

Since 1994, the Administration has cut taxes by more than $8.8 billion -- more than any administration in the history of the City. Combined with the $2.2 billion in tax cuts proposed in this budget, the total value of the Mayor's tax reduction program will be $11 billion through FY2003. In January the Mayor announced the creation of the Tax Reform Task Force to look at further reducing the tax burden on New Yorkers. The Task Force's goal was 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 taxes levied on businesses and individuals.

The proposed tax reductions include:

Sales Tax Exemptions:

PRIVATE SECTOR JOB GROWTH

New York City's private sector job growth has reached 305,000 since December 1993. In 1998, New York City experienced the largest single-year private sector job gain since 1951 with the creation of 77,400 jobs, and experienced the strongest five-year job gain on record. New York City has experienced five years of sustained job growth, following years of record job losses, with the loss of over 347,000 jobs during the last recession. Since 1993 the City has outpaced the rest of the State by 4 percentage points, with a job growth of 10.5%.

EDUCATION INITIATIVES

Education spending is at its highest level ever, totaling $10.7 billion in FY2000. In addition, $12 million is set aside in FY2000 and FY2001 as an incentive to begin a school choice program to be administered by the City. Eligible families that choose to opt into the program will be provided with tuition vouchers that can be used at any participating private or parochial school in the City. The funding will be allocated as an incentive to the district that is chosen and can be used by the district for appropriate public education purposes. The allocation will also cover any costs of program administration.

To meet school construction and rehabilitation needs, the Board of Education Capital Plan will be allocated $6.15 billion over the next five years, a 23 percent increase over the previous five years. However, despite a March 1 deadline, the Board of Education has not yet approved a capital plan and submitted it to the Mayor's Office and City Council for review. As a result, to maintain accountability over the allocation of these resources and ensure that the Board of Education has developed a plan that will serve students responsibly, this budget reserves the funds until the Board of Education approves a sound and equitable five-year capital plan.

This budget also calls for continued funding of several educational initiatives to ensure their continued success, among them:

CITY UNIVERSITY OF NEW YORK

The City University Of New York (CUNY) must continue to raise its academic standards to make sure that it provides a college level education for all its students and improves the reputation and value of a CUNY degree. Beginning in FY2000, no City tax levy will be expended unless CUNY:

NEW YORK/NEW YORK II AGREEMENT

Under the original New York/New York Program the City produced more than 9,000 cost-efficient units of permanent housing for homeless mentally ill individuals. The City will allocate $85 million in capital funding and $500,000 in expense funding to implement, in partnership with New York State, a second phase of this highly successful program. The program will develop an additional 1,500 units of permanent housing over the next five years for homeless and mentally ill individuals, providing them with the stability and independence that other forms of housing cannot offer.

PUBLIC ASSISTANCE

The number of public assistance recipients in New York City is at a 30-year low -- having been reduced by 40 percent since March 1995. In March 1999 the number of recipients fell to 699,900 -- falling below 700,000 for the first time in over 30 years.

CHILDREN'S SERVICES

As the Administration for Children's Services continues to be transformed into a performance-based agency that protects the City's children, this budget will enhance accountability in the City's foster care system and increase payments to foster parents. And to protect children's health, this budget provides funds to replace lost federal support for critical prenatal and adolescent immunization programs.

CAPITAL EXPENDITURES

The Fiscal Year 2000-2003 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 and mass transit as well as water, sewer and sanitation systems.

Among the projects included in the preliminary Capital Plan are:

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: