US News

BUDGET BLUES FOR BLOOMY

Mayor Bloomberg yesterday revealed for the first time that the city is facing a $4.5 billion budget gap as he warned of “painful” cuts ahead.

Since he took office, Bloomberg had not put a number on how much red ink the city faces for the fiscal year starting July 1, but most estimates have pegged it at $4 billion.

“We are going to have to stop doing certain things, and that is going to be contentious [and] painful,” said Bloomberg, who will unveil his proposed budget on Wednesday.

The mayor, who has pledged not to raise taxes, did not reveal what programs are headed for the chopping block.

But he said the city faces a dismal financial future.

“We have a terribly serious financial problem in this city,” he said.

“Not just for one year, but going forward for multiple years. And we will not solve that problem without pain.”

The city has ordered its agencies to prepare for cuts of up to 20 percent, except for the Fire and Police departments, which are looking at possible 10 percent reductions.

Just before he left office, then-Mayor Rudy Giuliani pegged the gap at $2.9 billion.

But Bloomberg revised that number yesterday, jacking it up to $4.5 billion.

In his State of the City speech, Bloomberg said all but $14 billion of the city’s $42 billion budget is tied up in mandated expenses – severely limiting what can be cut.

And he insisted yesterday that the budget is already lean.

“There is not a lot of fat, inefficiency or corruption in government,” the mayor said, standing in front of a long, wooden luge city workers built to mark the start of the Winter Olympics.

Some budget watchers wonder if Bloomberg can erase the gap without federal help.

“If you have to close a $4.5 billion gap in four months, you would have to do cuts and/or tax increases that will make it much more difficult for the city’s economy to recover,” one senior budget official said.

Also yesterday, Bloomberg hinted the city may pull out of a last-minute contract Giuliani signed to move the Museum of the City of New York from the Upper East Side to the newly renovated Tweed Courthouse behind City Hall.

Bloomberg, who reportedly is interested in using the space for city offices, said the museum doesn’t have the money for a move, which might run up against landmarks problems in any event.

RICHES TO RAGS

(FY=Fiscal year)

* FY1999: $2.6 billion surplus

* FY2000: $3.2 billion surplus

* FY2001: $2.9 billion surplus

* FY2002: $697 million projected surplus

* FY2003: $4.5 billion estimated gap

* FY2004: $4.5 billion estimated gap

* FY2005: $4.9 billion estimated gap

(Source: Independent Budget Office, except for FY2003, which was estimated by Mayor Bloomberg)