As Mayor Bloomberg gave the last budget speech of his mayoralty yesterday, reporters asked him if he was sad. “I’ve got 336 days to work as hard as I can,” he replied. He’d better get cracking.
The best you can say about the Bloomberg budget years is that they could have been worse. But it’s hard to see how.
In 2001, Bloomberg ran on his business cred. But he made his billions by running a growing business. He’s grown New York City’s budget, too.
In Mayor Rudy Giuliani’s last budget, city spending clocked in at $34.2 billion in today’s dollars (not including federal and state grants). In the fiscal year that starts in July, New York will spend $53.3 billion.
That’s a $19.1 billion increase after inflation — or nearly 55.8 percent.
The mayor defended his budget record yesterday: “Roughly, the growth in our expenses has mirrored the growth in our tax revenues.” Very roughly. In fact, this will be the fifth year out of the past six that the city hasn’t really balanced its budget.
New York will take in $1.1 billion less than it spends this year; it’s had such gaps since the Wall Street boom ended more than half a decade ago.
The city is closing this year’s gap with one-shots like selling new taxi medallions (maybe) and cash from banks who’ve reached court settlements on money-laundering charges. It plugged previous gaps with $8 billion in rainy-day funds set aside during the Wall Street boom years.
Bloomberg spent an unusual amount of time yesterday talking about why spending has run away from him. “A big chunk of it is fringe benefits,” he said — that is, health-care costs for public workers and retirees.
“We had put away these reserves” during the Wall Street bubble to pay worker health-care costs, he said, “and we’re using it all up.” Health benefits will cost taxpayers $8.8 billion next year — twice the $4.6 billion they cost in his first year.
He noted how he’s cut back on day-to-day operating costs (including 6,000 cops). But “all of the savings” has been “eaten up” by retiree costs, and then some, he admitted.
What he never does is take responsibility (not on this, or on similar problems with pensions and debt). “The cost of health care, everybody’s got this problem,” he pleaded. “We have to pay to keep people getting health care.”
Well, not everybody gives their workforce free health insurance — and not everybody gave away raises without requiring some give-backs from unions on health and other benefits.
It’s odd that the mayor is so proud of having increased education spending by $8 billion a year — “not just once.” A good chunk of that money goes into unaffordable benefits, not into the classroom.
And all this spending takes away from investment in stuff like bridges and roads.
Nor will a better economy rescue the next mayor from Bloomberg’s fiscal legacy.
Wall Street is already doing OK right now, though with fewer jobs and lower bonuses. Its profits were $18.7 billion last year — a big drop from the bailout years of 2009 and 2010, but still more than it made in, say, 2005, which was pretty good.
But Wall Street profits may well fall, thanks in part to regulations sending foreign banks away from New York (without, sigh, making the banking system safer). The mayor voiced well-founded concerns yesterday on that point.
He should be more concerned, though, about the $2.4 billion deficit he’ll leave his successor. And it’s worse than the raw number suggests.
During Bloomberg’s last months in office, what he calls “non-controllable” expenses like health and pension costs will exceed “controllable expenses” like city services for the first time ever. They’ll stay there at least through the next mayor’s first term.
But Bloomberg won’t be addressing that problem. Instead, he’ll be engaged in the same old “budget dance” with the City Council.
Just one example: By announcing yesterday that he’ll cut 700 teachers this year and 1,800 next year thanks to a $250 million cut in annual state funding, he set the stage for one mayoral candidate, Council Speaker Christine Quinn, to score a big public-relations win by fighting to get those teachers back.
Of course, in a $9.3 billion city-funded education budget, $250 million is just a rounding error.
But they’ll dance to this distraction until the music stops.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.
Twitter: @nicolegelinas