NYC mayor, council reach budget deal

NEW YORK -- The City Council and the mayor have reached a tentative agreement on an 18 percent property tax hike to help fill a $1.1 billion budget deficit, council Speaker Gifford Miller said Saturday.

New York Mayor Michael Bloomberg had originally proposed boosting property taxes by 25 percent to help balance the budget for this fiscal year, which ends next June 30. But the council opposed an increase that large, administration officials said.

A vote on the agreement is expected before Thanksgiving, city officials said. The tax hike would take effect in January.

"We don't pretend it's a painless measure. It's a painful measure," Miller said. "But when you are hemorrhaging money, you have to take painful measures."

City Council members also agreed to find $844 million in savings through service cuts and debt re-servicing, Miller said, but the details of where the savings would come from differed somewhat from a plan Bloomberg released earlier this month.

The tentative agreement calls for restoring some funding for libraries, the City University of New York, child care and foster care programs.

The plan also puts on hold Bloomberg's plan to close eight of 478 fire companies. Instead, Miller said, a commission will be appointed to study how the New York Fire Department can save $2.2 million, including determining which -- if any -- firehouses should be closed.

Ed Skyler, a spokesman for Bloomberg, confirmed the agreement has been reached with the mayor "in principle."

The city's budget woes don't end with this fiscal year. A budget deficit of $6.4 billion is projected for the next fiscal year.