THE CITY OF NEW YORK

OFFICE OF THE MAYOR

N E W Y O R K , NY 10007

FOR IMMEDIATE RELEASE

May 6, 2011
No. 141
www.nyc.gov

MAYOR BLOOMBERG PRESENTS FY 2012 EXECUTIVE BUDGET

Continually Improving Economy and Responsible Budgeting have kept the City in Better Position
than Most Cities, but State and Federal Disinvestment Continues

City’s $5.4 Billion in Savings and Growing Economy Prevented More Cuts Caused by State and
Federal Reductions

Nearly $2 Billion in Additional City Money Committed to Education to Cover State and Federal
Funding Losses

Mayor Michael R. Bloomberg today presented a Fiscal Year (FY) 2012 Executive Budget
and an updated four-year financial plan. The Mayor outlined a plan to balance the budget with no
tax increases for New Yorkers. The budget details the expanding gap between strong City support
for services and declining State and Federal support for services, which has forced City taxpayers to
cover the increasing costs of services. Further, much of the increase in cost for services is dictated
by State and Federal mandates. The Executive Budget relies on $5.4 billion in savings for FY 2012
generated though ten rounds of deficit closing actions taken by City agencies since 2008 and the use
of $3.2 billion of expense funding saved in FY 2011, which is used to prepay expenses in FY 2012
to reduce the need for further service reductions.

“We are in better shape than most cities for two prime reasons: we’ve made smart
investments in our economy and we budgeted in a responsible way that prepared us for the
inevitable downturn in the national economy,” said Mayor Bloomberg. “But we are not an island.
We are not immune to the realities in Albany and Washington. And the reality is, both places are
keeping more of our tax dollars to close their own budget deficits. I am sympathetic to their need for
budget cuts, but actions taken to close their deficits came without changing the burdens they impose
on City taxpayers. We have to balance the budget and we’re not going to kick the can down the
road. These are still very tough times for many New Yorkers, which makes the decisions in this
budget even more difficult. Our goal is to make sure we continue to have a strong city, and that we
protect vital services and the social safety net that keep our communities healthy.”

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 State and Federal Disinvestment in NYC

The last 10 years have seen the State and Federal governments’ share of the City’s budget
continue to decline.

In FY 2002, the combined State and Federal share of the City’s budget was 36 percent. In
FY 2012, the combined State and Federal share of the City’s budget will be only 27 percent.

If the City continued to receive the same percentage of its total budget from State and
Federal resources as it did in FY 2002, the City would have received an additional $6.1 billion in
State and Federal support FY 2012.

An additional $6.1 billion of State and Federal resources would have reduced the local tax
burden for services or New York City taxpayers by 15 percent, or an additional $6.1 billion in
State/Federal resources would have eliminated the need for any of the actions in the 10 rounds of
budget saving actions taken since 2008.

State Budget Impact

Specifically, the State budget for this year alone cut funding to New York City by a total of
$1.8 billion that would have flowed through the City’s budget. The Executive Budget replaces $1.2
billion of the State cut with City funding.

The State budget for this year also cut spending on State-provided services in the City –
dollars that do not flow though the City’s budget – by $2.7 billion.

Additionally, the State budget cuts triggered a loss of $2.2 billion in Federal matching
dollars.

Those three categories of impact add to a total State budget impact of a $6.8 billion cut for
New York City due to the State budget.

Education

The State budget reduced education funding to the City for FY 2012 by $1.2 billion. This
was the largest single-year reduction in education funding to New York City and came at the same
time as the City lost $850 million in Federal stimulus dollars used to support teacher salaries.

To prevent catastrophic personnel losses in the City’s school system, the Executive Budget
provides a major increase in City funds dedicated to education, with an increase of $2 billion of
City funds compared to the prior year.

The State continues to disinvest in education in New York City. In FY 2002, State and City
funding comprised a nearly equal portion of non-Federal spending on education. In FY 2012, City

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funding will comprise 61 percent of non-Federal spending and State funding will only comprise 39
percent of non-Federal spending.

If the State had continued to share education costs equally with the City, the State would be
providing $2.2 billion more in education funding for FY 2012.

City-funded spending on education has increased from $5.9 billion in FY 2002 to $13.6
billion in FY 2012.

Despite the City’s continued, strong financial commitment to education, historic State
education cuts and the need to balance the budget mean that reductions in the size of the City’s
teaching force are still required. More than 6,000 teaching positions will be eliminated through
attrition and layoffs.

Social Services

The current State budget eliminated more than $400 million in funding for social services,
health and criminal justice, shifting the burden to the City. The Executive Budget uses $121 million
of City funds to restore cuts to preserve the most essential services.

A significant loss of Federal funding and cost increases in the child care system reduced the
number of children supported by Administration for Children’s Services (ACS) child care program
by 16,000 in the Mayor Preliminary Budget. ACS currently provides child care support for 106,000
children, including the 16,000 slots that were slated for elimination in the next fiscal year.

The Mayor’s Executive Budget will ensure all children who benefited from child care
services this year will be offered a seat in Fiscal Year 2012. The budget will preserve the services
by again increasing City funding for ACS child care and funding an expansion of the Department of
Youth and Community Development’s Out-of-School Time program, with the additional slots
created in that program helping to continue service for children currently in ACS child care.
Compensating for the reduction in Federal aid and the increased costs to preserve the service for all
children in the system will cost $40 million.

The City’s Improving Economy

City tax revenues continue to rebound as the City’s economy has recovered from the
national recession at a faster rate than the rest of the nation.

Notably, Business Tax revenues – General Corporation, Banking Corporation and

Unincorporated Business Taxes – now exceed levels from prior to the financial sector collapse, with
Business Taxes in FY 2008 generating $5.41 billion in revenue and a projected $5.75 billion in FY
2012. Business Taxes for FY 2012 are in line with projections from the Preliminary Budget.

Factors contributing to the continued rebound in City tax revenue include:

• Job creation in New York City occurring at a faster rate than the rest of the nation.

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 • Wall Street profits continuing to exceed expectations.
• A record 48.7 million visitors to New York City in 2010.
• New York City’s commercial real estate market remaining the strongest in the U.S.

Capital Spending

In order to reduce the increasing costs of annual debt service payments, the Executive
Budget reduces the City’s ten-year capital construction program, excluding water projects, by 10
percent – from $39.8 billion to $36.0 billion.

Headcount

The City’s full-time and full-time equivalent headcount currently stands at 295,735, a
reduction of 16,069 positions since the start of the Bloomberg Administration. The City’s December
31, 2001 full-time and full-time equivalent headcount was 311,804.

Out-Year Gaps

The Mayor also announced today that while the Preliminary Budget for FY 2012 presents a
balanced budget, New York City will still face budget gaps of approximately $4.8 billion in FY
2013, $5.1 billion in FY 2014 and $5.3 billion FY 2015.

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Contact: Stu Loeser / Marc La Vorgna (212) 788-2958