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Teacher Impasse Hovers Over N.Y.C. Mayor's $70B Plan

Mayor Michael Bloomberg on Tuesday introduced a $70.1 billion preliminary budget for New York City, while the lack of an agreement with the teachers union hovers over city finances.

New York stands to lose $724 million in state education said because the city and the United Federation of Teachers are at a standstill over an agreement on a teacher evaluation system.

Lacking an agreement, the city will lose $250 million in the current fiscal year and forfeit the same amount in the next fiscal year, as well as $224 million included in the state executive budget. Without an evaluation agreement, according to Bloomberg, the city may also lose an additional $1 billion in education aid from the state and federal governments.

"The council has serious concerns about the negative consequences reflected as a result of the absence of a deal on teacher evaluations. A further failure to strike a deal would be potentially devastating to our city's students," said Council Speaker Christine Quinn said. "As I've said before, it is imperative that all relevant parties get back into the room and reach a deal as soon as possible so that the city is not subjected to an even greater loss in vital funding that our children's educations and futures depend on.

City Comptroller John Liu said Bloomberg's budget "illustrates the Mayor's continuous refusal to negotiate contracts with our city's workforce, which he is leaving for the next administration. His reliance on one-shots and a 'my way or the highway' negotiation strategy has led us here.

"In order to make up the budget shortfall resulting from City Hall's failed negotiating strategy on teacher evaluations, the mayor has decided to scapegoat our city's public school teachers," Liu added. "The real fault, however, lies with his own misguided ideology."

Bloomberg's budget, which calls for no tax increases, includes an estimated $4.5 billion in costs related to Hurricane Sandy, all of which the city expects the federal government to reimburse.

Of that total, $1.4 billion is for emergency response and debris removal and is part of the executive budget. The remaining $3.1 billion, according to the mayor, consists of long-term repair needs for damaged infrastructure that will be incurred over time in the capital budget.

Total Sandy-related expenses, he said, include $310 million for the schools, $812 million for hospitals, $1 billion for housing and $601 million for parks.

"The financial plan presented today continues to protect critical services and faster economic growth, while also taking the responsible, budget-minded actions that have resulted in a more efficient city government," said Bloomberg, whose three-term tenure will conclude at the end of the year.

Council Finance Chairman Domenic Recchia Jr. worried about the closure of fire companies. "We should have learned from our experience with Sandy that we have no slack capacity in our emergency response capability," he said.

The council expects to begin budget hearings the week of March 4, with passage required by June 30.

Moody's Investors Service rates the city's general obligation bonds Aa2, while Standard & Poor's and Fitch Ratings assign AA ratings.

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