NYC mayor unveils $66 billion budget, expects layoffs

By Joan Gralla

NEW YORK | Fri May 6, 2011 12:14pm EDT

(Reuters) - New York City Mayor Michael Bloomberg on Friday unveiled a near $66 billion revised budget plan that does not raise taxes but instead relies on attrition and layoffs to cut about 7,000 city workers.
Though the city is spending the majority of its reserves, "even that will not be enough to avoid layoffs of some city employees, including teachers," Bloomberg, a political independent, said at a webcast news conference.
The school system, the nation's biggest with over a million pupils, stands to lose about 6,000 teachers. These are the first teacher layoffs in decades. Despite an upswing in revenue, Bloomberg rescinded few cuts. Most notably, he found funds for 16,000 child care slots that were to be cut.
New York politicians have long complained that the city sends the federal and state governments billions of dollars more in tax revenue than it gets back in aid. The problem is particularly acute now, Bloomberg said, because both Washington and Albany are closing their deficits by cutting billions of dollars of aid for the nation's counties, cities and towns.
"The disinvestments in counties and cities by the federal and state governments is not good for this country," said the mayor, who at one time considered running for president. He won what became the first of three terms in November 2001,
Bloomberg again called on the state government to permit the city to negotiate pension benefits, clashing with Democratic and Republican governors around the country who are trying to rein in pay and benefits promised to public workers by curbing their rights to negotiate contracts.
The soaring cost of the city's pensions systems is draining money from other services, the mayor says, while New York City's actuary is reducing the expected rate of return to 7.5 percent from 8.0 percent. This will force the city to contribute around another $1 billion to the retirement system.
Bloomberg noted that despite the killing of Osama bin Ladin just days ago, "Nobody thinks that the threat to America or people around the world has gone away."
Yet he did not retreat from plans to further trim the police force and firefighting staff though a fiscal monitor in March said this will compress them to decade-lows.
(Additional Reporting by Bernd Debusmann Jr; Editing by James Dalgleish)