New York Mayor Michael Bloomberg announced the city's FY2010 budget Friday morning, laying out steps to close a $4 billion deficit. Those steps include a possible sales tax increase and elimination of 1,000 police positions.

In his address Friday morning, Bloomberg said that savings and revenue actions the city took at the end of last year had reduced the deficit by $2.4 billion, preventing the deficit from reaching $6.4 billion. "Since November, when we updated the city's financial plan, economic conditions have continued to worsen, with tax revenues continuing to sharply decline," the mayor said. "The tough decisions we made over the last year prevented the current deficit from being unmanageable, and we now have a plan to close that deficit. We will do our part by cutting nearly another $1 billion in agency spending, and the wise choices we made when the economy was booming have helped, allowing us to pay down billions of dollars in expenses for future years."

Along with cuts to the police force, other cost-cutting actions in the budget include eliminating 549 child welfare positions and reducing low priority child care services and foster care boarding home rates in the Children's Services Department; eliminating 167 seasonal aide positions in the Parks Department; and reducing the city's library subsidies by 7 percent.

The city would also seek to increase its sales tax rate by one-quarter, repeal the sales tax clothing exemption, and expand the number of purchases subject to sales tax in the state's executive budget, which is expected to generate $894 million in FY2010.

Bloomberg told radio show host John Gambling, "The rubber is meeting the road in the country and around the world." "The bottom line is if you drive down a street in New York, you will see more empty stores and restaurants than you've seen before," Bloomberg said. "That's telling you what's happening to our economy."

Related Stories