This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

NYC Mayor-elect Will Face Immediate Fiscal Crisis

Last week, Bloomberg announced that his team had balanced the city's budget for Fiscal Year 2015, which begins in July, closing a projected $2 billion deficit. The city's budget must be balanced by law but doing so early sends a signal to the unions that the city's financial health is improving and could support larger raises.

Negotiations over the new contracts are expected to begin in January. De Blasio has been steadfastly noncommittal about retroactive raises, and his team declined to comment further.

"He's in both a political and fiscal bind," said Baruch College political science professor Douglas Muzzio. "It's damned if you do, damned if you don't. If you don't give the big raises, you're immediately alienating your base, who you need to work hard for you and help with your re-election."

"If you do, you're going to be attacked for being beholden to the unions, and you're blowing a hole in the budget," Muzzio said.

A compromise may be the most likely outcome, according to analysts. Instead of retroactive raises, de Blasio could offer one-time bonuses for employees that would not be factored into their future pensions, which are another financial drain.

He could also ask city workers to start contributing to their health care premiums. Currently, New York is one of only a handful of governments in the nation where workers don't pay any health care. The city's health insurance costs are growing at 7 percent a year.

The state's leading Democrat may have hinted this week that de Blasio will not roll over in negotiations.

"Going into the conversation, everyone needs a reality adjustment," Gov. Andrew Cuomo said in an unrelated Manhattan news conference. "The unions have understood that in the past, and they've acted accordingly, and my guess is that they will again."

But the fiscal challenges de Blasio faces won't end with the union contracts.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.64 0.00%
FB $118.57 0.00%
GOOG $698.21 0.00%
TSLA $241.80 0.00%
YHOO $36.53 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs