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FY 2013 NYC Budget Agreement

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									                                   THE CITY OF NEW YORK
                                   O F F IC EO F TH E M AY O R
                                     N E W Y O R K , NY 1 0 0 0 7

                                                              FOR IMMEDIATE RELEASE
                                                              June 25, 2012
                                                              No. 242
                                                              www.nyc.gov

    MAYOR BLOOMBERG, SPEAKER QUINN AND MEMBERS OF THE CITY
  COUNCIL ANNOUNCE AGREEMENT FOR AN ON-TIME, BALANCED BUDGET

    No Tax Increases and Preservation of Essential Services as Result of Prudent Planning,
              Spending Restraint and an Increasingly Diversified City Economy

        Mayor Michael R. Bloomberg, City Council Speaker Christine C. Quinn and members of
the City Council today announced an agreement for an on-time, balanced budget for Fiscal Year
(FY) 2013 that includes no tax increases and preserves essential services. The budget remains
balanced through the use of prudently saved prior-year resources, billions in agency savings
actions and increased revenues from strong growth in the tech, film and television, tourism and
higher education sectors. The City Council is expected to vote on the FY 2013 budget agreement
this week, marking the 11th consecutive year Mayor Bloomberg and the City Council have
enacted an on-time, balanced budget.

         “Working with our partners in the Council, we’ve again produced an on-time, balanced
budget for our city that doesn’t raise taxes on New Yorkers, and that preserves the essential
services that keep our city strong,” said Mayor Bloomberg. “When times were better, the City
set aside surplus revenue – and when the first storm clouds gathered in 2007, we began cutting
budgets. These actions – and our work over the past decade to diversify the economy and make
it less reliant on Wall Street – have allowed us avoid the severe service cuts that many other
cities are facing. We face a significant challenge again next year, but given the effective and
fiscally responsible partnership we’ve had with the Council – and the leadership we know we
can rely on from Speaker Christine Quinn – I’m confident we’ll meet any challenges that arise.”

        “Working parents need to have their children protected and cared for while they are at
work. Children need to receive a high quality educational experience at an early age. We are
creating a program that responds to both of these needs,” said Speaker Quinn. “We are saying
that child care can and must be part of a lifelong education that continues with pre-K, through
Kindergarten and that ultimately leads to every child graduating high school ready for college.
That is our ultimate goal, and it begins with academic day care, and it begins with what we have
built here today.”

        “This budget saved jobs, maintained vital public services, and secured a strong financial
footing for our city going forward,” said Councilman and Finance Chair Domenic M. Recchia
Jr. “Most importantly, we made the right investment in our future and put children and families
at the forefront of this process. Now, tens of thousands of families throughout New York City
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can rest assured that the daycare, early childhood education, and afterschool programs they
depend on, will be there for them. I want to thank Speaker Christine Quinn for her leadership, as
well as Mayor Michael Bloomberg, for working with us to deliver a sound budget. I also want to
thank our Finance Division, my colleagues in the City Council, and most importantly, New
Yorkers. Members of the public from across all five boroughs told us what was important to
them and what needed to be done. This was a team effort and, considering the challenges we
faced from a struggling economy and reduced government aid, it was a success.”

 Balancing the Budget While Maintaining Services – Prudent Budgeting and Economic Growth

        The FY 2013 budget remains balanced without increasing taxes or major cuts to essential
services primarily through: 1) the use of prior-year resources that were prudently built up during
better economic times; 2) rounds of City agency deficit closing actions that began before the
national economic crisis began; and 3) a city economy that continues to grow and become more
diversified.

       The budget is supported by $2.4 billion of prior year resources carried from FY 2012 to
FY 2013 and $1 billion from the Retiree Health Benefits Trust – a fund that was created with
saved surplus resources in 2006 and 2007.

       The budget also relies on nearly $6 billion in savings for FY 2013 generated though 11
rounds of deficit closing actions taken by City agencies since 2007, including $1 billion in
savings enacted since last November.

         Tax revenues continue to rebound as the city’s economy continues a gradual recovery,
with economically sensitive tax revenues – personal income, business, sales and real estate taxes
– growing again in FY 2013. While revenues from the financial sector have declined, tax
revenues have been bolstered by strong growth in the tech, film and television, tourism and
higher education sectors, areas where the Administration has focused its economic development
initiatives.

        New York City has regained more than 200 percent of the private sector jobs lost during
the recession, while the rest of the country has gained back only approximately 40 percent. The
city has now recovered all jobs lost during the recession and private employment in the city has
reached an all-time record high at approximately 3.3 million, surpassing the previous record in
1969 of 3.275 million.

                                           Education

       The budget agreement maintains the increases for education funding included in the
Mayor’s May Executive Budget, which will allow the City to increase the total number of
teachers in the school system this coming year by roughly 1,000 teachers, and maintain overall
funding levels to schools.

                              Child Care and Out-of-School Time

      The budget agreement adds approximately $150 million in combined funding to the
Administration for Children’s Services Child Care program and the Department of Youth and
Community Development Out-of-School Time from the levels in the May Executive Budget.

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The total combined funding level for the two programs in FY 2013 will now be approximately
$75 million more than the total for FY 2012.

        In June, the Mayor announced the transformation of the City’s child care system through
contract awards under the EarlyLearn NYC Request for Proposal, which standardizes the quality
of early care and education for the first time and makes significant quality improvements while
providing nutrition, health and mental health services; child assessments to track progress;
support services to children with special needs; and increased professional development for
center staff.

       The Mayor’s May Executive Budget enhanced the Out-of-School Time program to offer
more comprehensive services than ever before, including providing students with full-time, year-
round programming – rather than during the school year only for many slots – and with a focus
on academic enrichment.

                                Cultural Institutions and Libraries

        The budget agreement increases funding for the City’s cultural institutions by
approximately $50 million, which brings total funding for FY 2013 slightly above FY 2012
levels and maintains the City’s continued strong support of the cultural institutions that have
been an increasingly larger driver of tourism and economic activity in the city.

       The budget agreement adds nearly $90 million in funding to the City’s library system,
which will allow for, on average, more than five days of service throughout the system. The
budget also includes the more than $100 million in capital funding included in the Mayor’s May
Executive Budget for one of the largest renovation projects in the history of the library system.

                                               Taxis

        The updated FY 2013 budget reduces expected revenue from the sale of taxi medallions
in FY 2013, but increases overall expected revenue from the sale, which is now reflected over
the fiscal years 2013, 2014 and 2015. The May Executive budget included $1 billion in revenue
in FY 2013 from the sale of taxi medallions. Due to the delays caused by legal challenges to the
medallion sale, the FY 2013 budget now assumes $635 million in taxi medallion revenue. The
City now plans to extend the medallion sale over a longer period of time, with total revenue now
estimated at $1.46 billion from the sale of all medallions. The medallion revenue is now
budgeted as: FY 2013 – $635 million, FY 2014 – $365 million, and FY 2015 – $460 million.
The overall estimate of $1.46 billion in revenue from the sale of 2,000 medallions remains a
conservative estimate considering the typical sale price of taxi medallions.

                                    Other Changes Since May

        Other significant changes in estimates since the May Executive Budget include: debt
service savings of approximately $150 million in FY 2012 and $90 million in FY 2013 primarily
by taking advantage of low interest rates; the final estimate of the City’s actuary has resulted in a
reduction in pension costs of approximately $40 million in FY 2012 and $80 million in FY
2013; the City received approximately $150 million from a Federal settlement with ING Bank in
FY 2012; the collections for miscellaneous revenue collections (permits, licenses, fees) are now
approximately $70 million higher in FY 2012; and a re-estimate of the City’s reserve for State
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and Federal audits after a review with the auditors saves approximately $180 million in FY
2012.

                                        Out-Year Gap

        The budget agreement ensures a balanced budget for FY 2013, but New York City will
face a budget gap of approximately $2.5 billion in FY 2014.

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


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