From ABC News:
With tax revenues continuing to drop, New York City faces a $4 billion deficit for fiscal year 2010 and could resort to layoffs and attrition from the city’s 310,000-member workforce to close the gap, city officials said late Thursday.
The cuts and layoffs could result in the elimination of more than 23,000 jobs, or just more than 6.5 percent of the current workforce, a number that has been projected by ABC News for the past several months.
On Friday, Mayor Michael Bloomberg will lay out his plan to close the budget gap, including new initiatives and about $1 billion in cuts for city agencies.
The initiatives are aimed at reducing long-term spending on health care and pensions as well as Medicaid costs and debt service, among other programs.
The city is seeking to require all city workers to contribute to their health care costs. Right now some contribute nothing, others a token amount.
For the city to reduce its long term pension costs — one of the heaviest budget burdens — it will require a change in state law. That change, which New York Governor David Paterson indicated he would support, would reduce the city’s pension contribution for new workers and require workers to work 25 years rather than the current 20 under the “20-and-out” system.
The city’s deficit projection is driven, in part, by the fact that tax revenues are forecast to have dropped by $800 million in 2009 and another $2 billion in 2010.
The preliminary budget proposal is the gloomiest news yet from Bloomberg, who has incrementally spooned out bad news over the past several months in a process one City Hall insider called “pain management.”
New York City employees weren’t the only municipal workers to get bad news today. California Gov. Arnold Schwarzenegger won approval from a Sacramento County Superior Court judge to order twice-monthly furloughs for 238,000 state employees.
In other economic news, from The New York Times:
On yet another morning of grim economic news, President Obama sought to further distance himself from his predecessor on Friday as he announced steps that he said would strengthen organized labor and improve the lot of middle-class Americans.
At a White House ceremony, the president signed three executive orders that he said would “reverse many of the policies towards organized labor that we’ve seen these last eight years, policies with which I’ve sharply disagreed.”
Soon afterward, Vice President Biden drew applause when he flung another dart at former President George W. Bush and former Vice President Dick Cheney (on Mr. Cheney’s 68th birthday) as he told labor officials in the audience, “Welcome back to the White House.”
Mr. Obama, following up on his Thursday condemnation of “shameful” bonuses for Wall Street bankers, seized on the latest economic numbers to push yet again for enactment of his $800 billion-plus economic stimulus package. He and Mr. Biden spoke not long after the nation’s gross domestic product reflected its greatest contraction in a quarter-century.
The orders [Obama] signed, which union officials say will undo Bush administration policies that tilted toward employers, would require federal contractors to offer jobs to current workers when contracts change, and would make it more difficult for federal contractors to discourage union activities.
In addition, Mr. Biden said the first meeting of the previously announced task force “to bring together those Cabinet members who have the greatest impact on the well-being of the middle class” would be Feb. 27 in Philadelphia. The task force will look at issues as diverse as health care and college opportunities, Mr. Biden said, and will focus on “restoring the balance in the workplace.”
The task force will be led by Jared Bernstein, a prominent liberal economist who has been writing a study on the impact of Mr. Obama’s stimulus plan.
The president and vice president did not precisely define the “middle class,” a term used in conversation and politics to describe aspirations as well as income levels. But it was clear that they were not speaking of the Wall Street people who shared in the enormous bonuses that Mr. Obama denounced on Thursday.
When Mr. Bush was president, he often used virtually identical language in describing American workers, but he generally emphasized entrepreneurship and small business more than Mr. Obama and Mr. Biden did today.
“I do not view the labor movement as part of the problem,” Mr. Obama said. “To me, it’s part of the solution.”
But the president said there need not be a conflict between “the interests of workers and the interests of shareholders,” and that American business and industry could be “lean and mean” and thus competitive in the global marketplace.
Mr. Biden said that, by lifting the middle class, the new administration would improve life for the poor — “and by the way, the wealthy do better as well. Everyone does better.”