Bloomberg Orders $1.5 Billion In Budget Cuts

NEW YORK (CBS) ― Prepare for economic pain. That's Mayor Michael Bloomberg's message to the city as he orders his agencies to come up with $1.5 billion in budget cuts over the next two years. But the pain might not hurt as much as it could. Think of the city's economy as suffering from a cold or flu. It needs an over-the-counter remedy, not antibiotics. Just the same, it needs budget cuts, not tax hikes. "At this moment, I don't believe that tax hikes would be necessary," said Mark Page, the city's budget director. Those are heartening words from Page even as the city prepares to deal with a down turn in the real estate industry and Wall Street by slashing spending by $1.5 billion. Wall Street woes play a big part. In 2006, city income from Wall Street was $20.9 billion. This year, the city expects it to be only $14.8 billion -- a 30 percent drop. Wall Street cuts can have a ripple effect on the local economy. According to the state comptroller, the loss of just one job on Wall Street can mean the loss of as many as three jobs in other industries in the city and the suburbs. So how does the loss of a Wall Street job ripple through the economy? "If somebody has lots of money, what do they do with it? Well they probably buy a nice place to live, they probably eat meals in restaurants, they probably buy things, they pay sales tax, the restaurant hires people," Page said. The cuts are not expected to mean a drop in police, firefighters, and teachers. But the workforce will shrink. The agencies have about three weeks to decide what to cut. They'll go into effect in January at City Hall.

** All I have to say is that a lot of money!! **

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