New York City is looking for quick action from Albany to help balance its fiscal 2010 budget through tax increases, city officials said yesterday during the first day of hearings on the mayor's executive budget.
Budget director Mark Page said the city requires "virtually immediate action" so that it can start collecting an additional 0.5% sales tax overall, repealing an exemption on clothing purchases of less than $110.
Page called for the action on the taxes so collection could begin on June 1, a month before the new fiscal year begins.
"Without quick action, the effective date of the increase is likely to slip a quarter, costing approximately $250 million in FY 10," Page said in prepared testimony.
The city requires state approval to raise taxes other than property taxes.
Another revenue proposal requiring the New York Legislature's approval is a five-cent-per-bag fee on plastic bags given to store customers. The city expects this to raise $100 million in fiscal 2010.
"Since the council by law must adopt a budget that is balanced, if the mayor's proposals are not adopted something else will have to take their place," City Council finance committee chairman David Weprin said in prepared testimony. "Although the 2010 budget is balanced on paper, fiscal 2010 revenues are not, in fact, sufficient by themselves to support Fiscal 2010 spending."
Earlier this month, Mayor Michael Bloomberg proposed a $59.44 billion executive budget proposal for fiscal 2010. The boom times brought the city surpluses, which are used to prepay debt service and other expenses, but those days are over as the city faces large budget gaps in future years in the face of the recession.
"Between federal stimulus dollars and accumulated surplus, we are using close to $7 billion of resources which will not be available to us for future city operations," Page said.
The proposed budget also requires $400 million of concessions from labor unions.