Nicole dissects Mayor Bloomberg’s preliminary 2011 budget in a Post op-ed today.   Her key point: while news coverage of what the Times headlined as a “grim budget” has concentrated heavily on the mayor’s proposed cuts, Bloomberg actually is relying much more heavily on a $2.9 billion revenue surplus created by the latest Wall Street bubble (call it the post-bubble bubble) to close a projected $4.1 billion budget gap.

But Wall Street’s run won’t last. Propping it up is massive government intervention — everything from zero interest rates to TARP. And the feds can’t keep this ongoing bailout going forever.

In light of that risk, Bloomberg remains too gentle with the workforce.

Bloomberg’s plan forecasts comparatively small out-year budget gaps ranging from $3.2 billion in fiscal 2012 to $3.8 billion in 2014.   However, he also outlined a contingency plan to lay off 8,500 teachers, more than 3,000 cops and many other employees in the event that Governor Paterson’s proposed cuts in aid to the city are enacted as part of Albany’s fiscal 2010-11 budget. (Bloomberg estimates Paterson’s budget would cost the city $1.3 billion, a figure the state budget director says is inflated).

For now, at least, the mayor’s preliminary plan assumes that total state categorical aid to the city will increase by $290 million (2.5 percent) this year, and by another $1.1 billion (12 percent) over the four years after that.

Memo to the mayor: even if state lawmakers somehow manage to restore some of the aid cuts Paterson has proposed for next year, one look at the state financial plan should make it obvious that the long-term state aid trend forecast in your city plan is utter fantasy.  Under the best-case scenario, the state is facing cumulative budget gaps of nearly $30 billion over the next three years.  Under the circumstances, the city will be lucky if it receives any aid increase at all next year.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough

Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget. Read More

New York’s Medicaid Spending Is Running Billions Over Budget

New York's Medicaid program ran billions of dollars over budget during the first half of the fiscal year, adding to signs of a brewing fiscal crisis in Albany. According to the fro Read More

Hospital Lobby’s TV Campaign Spreads Misinformation About Medicaid

As New York's health-care industry agitates for more money from the state budget, two of its most influential lobbying groups are airing TV ads that make alarmist and inaccurate claims about Medicaid. Read More

Hochul’s ‘Pay and Resolve’ Push for Hospitals Triggers Déjà Vu

Two years ago last week, I wrote in the Daily News about how then-Governor Andrew Cuomo was pushing a costly change to insurance law on behalf of a hospital group that had supported his campaign through a fund-rai Read More

The Looming Collapse of a Long-Term Care Insurer Raises Questions for DFS

As the Hochul administration presses for the creation of a "guaranty fund" to bail out failed health insurers, the state is quietly moving to seize a small company that could be the fund's first target. Read More

New York’s pricey hospitals draw pushback from labor

A City Council hearing in Manhattan on Thursday promises a rare scene in New York politics: hospitals playing defense. The council is debating whether to establish a watchdog agency focused on the high price of hospital care in New York, with a goal of helping the city and other employers contain the rapidly rising cost of health benefits for workers. Read More

Hochul puts Medicaid spending on a steeper slope

Governor Hochul is releasing the brakes on Medicaid, allowing state spending on the safety-net health plan to increase more than twice as fast as it typically did during the Cuomo administration. Read More

Hochul’s agenda mostly sidesteps health care

Governor Hochul gave health care surprisingly little attention in her State of the State speech on Tuesday – a sign that taking on dysfunction in one-sixth of the state's economy ranks low on her list of priorities. Read More