Bloomberg Explains Rainy-Day Fund, Triborough Renaming Costs
By Azi PaybarahHere are some highlights from Michael Bloomberg’s weekly radio interview with WOR’s John Gambling this morning.
In discussing the fiscal crisis, Bloomberg said the city is obligated to balance its budget each year and cannot hold onto surpluses because it’s prohibited from creating a rainy-day fund.
Gambling said, “That doesn’t make much sense, does it?" Bloomberg said it does because funds like that usually lead to more spending by the government, not less.
Asked about legal challenged to his plan to rescind the $400 rebate for homeowners, Bloomberg said, “We’ll never get to that because we’ll come up with something,” indicating, as Lew Fidler said yesterday, that this whole thing may be a negotiating tactic. Bloomberg said he’d be “happy” to send out the checks if there were another source of revenue.
Towards the end of the interview, a caller asked the mayor why, during a fiscal crisis, officials spending $4 million to rename the Triborough Bridge after Robert F. Kennedy. Bloomberg said the city is only spending about $100,000--the rest is being paid for by the state.
“While $4 million is nothing to sneeze at,” if the state’s deficit is $12 billion, “saving $4 million is not going to make much of a difference, although every little bit helps.”
Bloomberg went on to say that some of the signs with the bridge’s old name had to be replaced anyway.
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NYC's rainy day fund
I missed the interview, so it's possible that Bloomberg did talk about what he has done to get around the law, but he should because it's one of his better accomplishments.
During the good years, when NYC was running a surplus, that extra money was "rolled over" to pay future obligations in advance. That way, the city didn't "show" a surplus, even though we had one. City pension payments, healthcare payments -- many of these payments were made ahead of schedule, out of the "surplus" funds. This is the way Mayor Bloomberg created a de facto "rainy day fund," without formally doing so.
This fiscal year, which began on July 1, the city is dipping into that rainy day fund, to the tune (I believe) of about $2 billion of the $6.6 billion we have. Obviously, we'll be dipping further into that fund next year, as the economy shrinks.
It's a good thing we have this money, or the budget cuts that will be made would have been far worse. In addition, we could have seen another 18% increase in property taxes, as well as other tax increases.
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