January 30, 2006

NYC mayor’s budget seeks healthcare reserve: source

NEW YORK (Reuters) - New York City Mayor Michael Bloomberg
wants to start saving for retiree health care by reserving $1
billion in both the current 2006 budget and the next one, a
source familiar with the issues said on Monday.

The proposal is part of the Republican mayor's new 2007
budget plan, which he will unveil on Tuesday, added the source,
who declined to be named.

A Bloomberg spokesman declined comment. Last Friday, the
mayor estimated this health-care liability at $50 billion.

The mayor's new budget does not include tax cuts, though he
wants the state to extend a $400 a year rebate for homeowners,
the source said.

The mayor also is boosting the current surplus to $3.2
billion from $1.7 billion in November, added the source.

But this surplus does not include about $1 billion in
pension savings from an actuarial change. That is the money the
mayor earmarked for retirees' future health-care costs in 2006,
he added.

The city's 2007 budget gap totals about $750 million, and
it will be partly closed with tax revenues from Wall Street,
the source added.

The actuarial change will save the city around $525 million
in fiscal 2007, which starts on July 1. Bloomberg will use that
sum, plus funds from other sources, to produce the other $1
billion in saving for retiree health care, the source added.