Mayor Bloomberg has enough fiscal power to blow away the $4 billion cloud that looms over City Hall, but it will force him to make some politically unpopular decisions.
Several local economists believe the new mayor will be able to fill the massive budget gap that confronts him in the fiscal year that begins in July.
“The mayor will have to emphasize that this is a shared burden, and every major special interest and player in this town has to pay a price,” said Harvey Robbins, who ran the Mayor’s Office of Operations during the Dinkins administration.
Helping Bloomberg is the fact that virtually every major union is either working without a contract or has a contract that is expiring this year.
“There is an enormous and almost unprecedented opportunity for the city to demand some productivity improvements in these contract negotiations,” said Marcia Van Wagner, the head economist for the Citizens Budget Commission.
“The amount of money that the city could save simply on debt service alone is enormous if we scale back capital spending in the next four years,” said E.J. McMahon, a budget analyst for the Manhattan Institute.
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Some tough ideas several economists have proposed Mayor Bloomberg could use to help close the estimated $4 billion gap in the upcoming city budget:
* Save $400 million in debt service over four years by capping capital construction at $4 billion a year.
* Reducing city work force by 25,000 through attrition could save as much as $1.5 billion annually.
* Getting the state to reduce the city’s Medicaid load from 25 percent to 20 percent would save the city $700 million.
* Cut the pre-Sept. 11 police overtime from about $300 million a year to $200 million.
* Get the state to reinstate the commuter tax, which would bring in at least $400 million annually.
* Keeping the 14 percent personal income-tax surcharge would bring in $350 million a year.
* Requiring city workers to help pay for health insurance could bring in as much as $500 million a year.
* A tax-rate increase for one- and two-family homeowners could bring in about $500 million annually.