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   Vol.66/No.43           November 18, 2002  
Bloomberg cries ‘budget crisis,’
targets workers
New York City mayor Michael Bloomberg ordered a hiring freeze on all city jobs October 28 in his administation’s latest move to slash city services, and public employees’ wages, pensions, and jobs, under the pretext of a "budget" crisis. The directive also ordered most city agencies to squeeze 2 percent from their budgets this fiscal year and next. This is on top of a 7.5 percent cut in city services earlier in the year.

Mark Page, head of the Office of Management and Budget, issued a memo casting the hiring ban as an effort to hold back layoffs. "Recognizing that the permanent reductions in spending that the city must achieve will require a reduction in work force--and that layoffs must be avoided to the extent possible--a freeze on all new hires is... imposed effective immediately," he wrote.

Three days earlier, the ax came down on sanitation workers, with an initial round of 103 workers laid off, the first substantial municipal job cutback in a decade.

Bloomberg announced he will present a more sweeping package of budget cuts in November.

"Everything is on the table," the mayor has said many times. Nobody expects him to call for a moratorium on debt payments to wealthy bondholders, however.

Those facing cuts are the more than 365,000 workers--roughly one in every 22 New York residents--who are either municipal employees or whose wages are subsidized by the city.

City Hall says that New York faces the worst budget "crisis" since 1975. The mayor reports that municipal expenses extend beyond income by $1 billion this fiscal year, which ends June 30, 2003. The mayor’s office projects budget gaps as high as $4 billion to $6 billion in following years.

New York, like many cities in the United States, operates on a deficit basis: it does not raise enough funds through taxes and state and federal revenue to cover its expenses. That shortfall is made up through issuing bonds--similar to taking out a loan--that is paid with interest over a set period of time. When a municipal government decides to reduce the deficit, bondholders are always guaranteed their payments above anyone else, while city employees and social services are put on the chopping block to meet the "crisis" and balance the books.

New York City owes $42 billion in outstanding bonds--largely in the hands of the billionaire families--which would translate into $5,000 "owed" by each resident. In 2002 the city will spend one out of every five tax dollars on debt service--principal and interest on bonds.  
Mayor projects sweeping cuts
The quality of social services, which has been deteriorating, is expected to worsen further, while taxes, fees, fines, tolls, tickets, and nuisance charges--all of which fall disproportionately onto the backs of workers--are projected to increase in order to guarantee that bondholders continue to receive their payments.

The mayor is seeking to eliminate $225 million in pension and health benefits owed to city workers and calls for scaling back the building of new schools by 20 percent. In February Bloomberg announced a budget plan proposing to slash funds to the Administration for Children’s Service by nearly 18 percent and services for workers who are homeless by 17 percent.

On the state level, pensions invested in the stock market during the 1990s boom have plummeted 13 percent, losing $7 billion and affecting close to 1 million active and retired government employees.

In face of a 25 percent rise in the number of homeless families in the city and a spike in the number of children going to soup kitchens for their meals, Bloomberg announced plans to step up Operation Clean Sweep, launched in February, to drive a record 37,000 homeless people off the streets. "We want to make sure that the public can go about their business and not be hassled," he told reporters. "We are not going to lose the quality of life that we have all come rightly to expect."

Bloomberg projects setting up toll booths on East River bridges, charging $6 to enter Manhattan from Brooklyn and Queens.

José Rodríguez, a construction worker from Brooklyn, told the New York Daily News, "If I pay $6 a day, that’s over $100 a month. With that money, I should be buying food for my kids."

These moves are coupled with a proposal by the Metropolitan Transportation Authority (MTA) to jack up subway and bus fares from $1.50 to $2.00 per ride, a de facto tax of more than 30 percent on public transportation. The reason, once again, is to make up for a proclaimed deficit.

Last year the Port Authority of New York and New Jersey raised tolls at bridges and tolls between the states from $4 to $6 and fares on the PATH commuter train from $1 to $1.50. Port Authority Chief Operating Officer Ernesto Butcher has said, "The new toll and fare structure is a well-reasoned plan that will address traffic congestion by providing travelers with an incentive to change their commuting habits...and by encouraging the use of mass transit."  
‘Worst budget crisis since mid-1970s’
City Hall and the big-business media call the budget deficit the greatest fiscal crisis since the mid-1970s. The Daily News points at job losses, enduring economic stagnation, and a plunge in tax revenue from Wall Street financial firms from their peak of $21 billion in 2000 to $12.8 billion this year.

Official joblessness in the city stands at 7.9 percent, well above the national average. The city’s economy shrank 1.3 percent in the second quarter of 2002, the sixth consecutive recessionary quarter.

In the 1970s the state set up an agency staffed by bankers and other big-business figures--the Municipal Assistance Corporation, known as "Big Mac"--to drive through steep austerity measures. Over a 30-month period, more than 63,000 municipal employees lost their jobs, including 20,000 teachers and 4,000 hospital workers. Transit fares jumped. The City University of New York system--which had free tuition dating back 129 years as well as open admissions to anyone with a high school diploma or equivalency since 1969--began charging fees. Now tuition costs compare to that of other community colleges around the country.

Once again, big business is warning of a major assault on public employees and services. "We will have to become accustomed to lower levels of service," declared Paul Dickstein, who was budget director in the Koch administration in the 1970s.

City officials project slashing library hours, scaling back the number of garbage pickup days, chopping the Parks Department payroll, closing or merging 15 senior centers, raising express bus fares from $3 to $4, cutting aid to asthma sufferers, and eliminating neighborhood youth programs, among other things.

At the time of the last "crisis" the trade union officialdom collaborated with City Hall, accepting the claim that there was "no money," and negotiated takeback contracts.  
Teachers union officials offer cutbacks
In face of the current ruling class offensive, Randi Weingarten, president of the United Federation of Teachers, has already jumped on board the concessions train, asking only that Bloomberg first "make his case."

On October 31 Weingarten offered Bloomberg a $200 million cutback, calling for the early retirement of 20,000 teachers over 55, to be replaced by teachers who are paid less.

"This is not an ideal education policy," she said, "but if this budget crisis is as bad as they predict, it’s the best of the bad effects." She argued it would be a way to avoid layoffs of teachers.

Bloomberg gave Weingarten the back of his hand, rejecting her concession less than two hours after it was proposed.

One item in the "education" budget that isn’t being cut is the policing of schools. City officials plan to hire 285 additional security guards in the schools over the next two months. They will join 3,850 guards--trained by the New York Police Department--who currently roam the halls and staff metal detectors. At schools such as John F. Kennedy High School in the Bronx, students sometimes wait in line for nearly an hour to go through metal detectors and scanners before they can enter the building.


Working people in nearby Nassau County face a similar situation as those in New York. County legislators adopted a budget October 28 that raises property taxes by 20 percent and cuts the workforce by 1,400 jobs. They announced it as the first chapter in a four-year plan to rescue the county from defaulting on its bond payments.
Related articles:
Transit workers confront New York City’s real ‘rats’
The ‘budget crisis’ scam  
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