One of first things Mayor Bloomberg needs to do is to disabuse himself of the notion that the city's budget gap is mainly "a revenue problem," as he put it soon after the election.
Yes, revenue projections have fallen sharply in the wake of the World Trade Center attack. But the city faced a budget gap even pre-9/11 - and the fundamental reason is spending.
New York City's severe post-9/11 fiscal crunch has prompted fresh calls in some quarters for reinstating the city's commuter tax, which could generate as much as $500 million, to help close a projected budget gap of $3.5 billion.
In the wake of the attack on the World Trade Center, New York City faces a budget gap of at least $3.6 billion. As a result, Michael Bloomberg will confront the city’s most serious financial crisis in a decade.
Just before the attack on the World Trade Center, Mike Bloomberg said he couldn't "prudently promise" not to raise city taxes, "because you can't see the future."
Some members of New York's congressional delegation seem obsessed with worry that President Bush won't deliver every penny of the $20 billion in disaster relief he promised to the city in the wake of Sept. 11.
New York State's decision to roll the dice on more Indian casinos, video gaming and Powerball is ultimately expected to pump another $1 billion into the state treasury annually, but the inevitable court challenge may delay that payoff for several years. In the meantime, the state clearly faces a very real downturn in its economy and revenues.
The horrific attack on the World Trade Center will deal a severe blow to New York's economy and government revenues for some time. In one day, the city was plunged into its worst fiscal crisis since 1990 - which, if mismanaged, may yet become as bad as the brush with bankruptcy in the mid-1970s.
In the last five years, New York City’s economy has boomed and private sector employment has hit record levels. What, if anything, did lower taxes have to do with these achievements? And what are the implications for future tax policy?