By Courtney Dentch
The City Council officially passed the city’s $43.7 billion budget Friday by using $3 billion in tax hikes to avoid drastic service cuts.
The budget deal between the Council and Mayor Michael Bloomberg restored funding for a range of borough services, including the Queens Zoo, the Queens Borough Public Library, trash pickups, child health care and more.
“This year’s budget preserves what is most vital to our city,” Bloomberg said in a statement. “We met difficult challenges head-on and have been able to maintain our quality of life while maintaining the city’s fiscal integrity.”
The agreement, which was announced June 25 and formally approved Friday, closed a $3.8 billion deficit for the fiscal year that started Tuesday.
But the property, income and sales tax increases passed over the last year could not save three firehouses, including Engine 261 in Long Island City, from closing or keep 864 school aides across the city in the classrooms in September.
“Under the circumstances I think it was a nice balance between service cuts and taxes,” said Councilman David Weprin (D-Hollis), chairman of the Finance Committee. “You don’t want to overly tax people and you don’t want to overly cut services, so I think we found the right balance and hopefully the economy will turn around and we can look to reduce taxes.”
In addition to the 18.5 percent property tax increase approved in November, the Council agreed to a surcharge on absentee landlords last week, which will tax property owners who rent space but do not live there and bring $44 million into the city’s coffers.
While the surcharge is aimed at people who live outside the city, many middle-class people who inherited a second home from a family member are going to be charged as well, said Councilman Dennis Gallagher (R-Middle Village).
“The folks are not professional landlords,” he said. “These are the people who live in the community whose mother or father died and they’re renting the property.”
The Council also passed a progressive income tax hike ranging from 2.9 percent to about 4.5 percent last week that will raise the annual tax bill for a family earning $30,000 a year to around $925, while a family making $50,000 will pay $1,635 and a family bringing in $100,000 will owe $3,436. The tax is temporary for the next three years, with tax rates decreasing in 2004 and 2005.
Sales tax was also increased to 4.625 percent for a combined city and state sales tax of 8.625 percent.
Bloomberg had also asked for $600 million in concessions from the city’s unions, but he did not get them. The mayor has threatened to stop raises or lay off more city employees unless he sees productivity savings. About 4,000 workers, including 864 school aides who lost their jobs this week, will be out of work by the end of the summer.
Nor could the taxes rescue Engine Co. 261, the Long Island City firehouse that closed last month. The city will save $11 million by keeping it and two others shut.
“Even if the Council puts the money back, (the mayor) would refuse it,” said Councilman Tony Avella (D-Bayside), referring to Engine Co. 261.
“He was just fanatical about keeping it closed. He’s putting the safety of all New Yorkers in jeopardy,” Avella said. “You cannot put the bottom line ahead of public safety and that’s what the mayor did.”
But the budget did include $5.5 million for the Peter Vallone City University scholarship, named for the former council speaker from Astoria. The scholarship covers half the tuition at CUNY campuses for city students who maintain a B average or better, said Councilman Peter Vallone Jr. (D-Astoria), the former speaker’s son.
“With the tuition increases coming it’s a nice thing to teach kids that if they work hard they’ll get something for it,” he said.
And while the taxes and service cuts allow the Council to pass a balanced budget, the city may have to dig even deeper next year, which could see an anticipated $1.8 billion deficit, Weprin said. Council members, including Leroy Comrie (D-St. Albans), are hoping this year’s tax hikes will not be repeated.
“We clearly worked hard at setting a pace and tone this year,” Comrie said. “We hope that the way we’ve done this will insure that we will not have to raise taxes again.”
Reach reporter Courtney Dentch by e-mail at TimesLedger@aol.com, or by phone at 718-229-0300, Ext. 138.
