KAI RYSSDAL: We don't need to remind you 2006 was a banner year for New York City. A real estate market that seems to have weathered the slump. Record highs on Wall Street. And for those in the finance business, bonuses up in the five or six figures. Maybe eight figures sometimes.
That all translated into big tax profits for the city. And now residents will get a piece of it back, because Mayor Michael Bloomberg announced a billion dollars in tax cuts today.
Marketplace's Alisa Roth reports.
ALISA ROTH: Mayor Bloomberg is expecting a record budget surplus for the city this year. Thanks, among other things, to lots of expensive real estate transactions. And a good year on Wall Street. Today, he told the city he wants to share that windfall.
MAYOR MICHAEL BLOOMBERG: I believe that a good portion of the surplus revenues we anticipate in the current fiscal year should go back to the New Yorkers who made sure that this city's recovery . . . the ones who made sure this city's recovery from 9/11 exceeded our wildest dreams.
It was right after 9/11 that Mayor Bloomberg upped the city's property taxes by nearly 20 percent to help balance the city's budget. Today, he proposed a billion-dollar, tax-relief package. The plan would cut property taxes by about 5 percent. It would also get rid of the sales tax on clothing and shoes.
It's a big switch from last year, when Bloomberg put $5 billion surplus back into the budget to help pay future expenses.
Roni Lowenstein is director of the New York City Independent Budget Office, a nonprofit agency. She says this year's solution is clever.
RONI LOWENSTEIN: He's crafted a way of dealing with those additional funds that don't commit him to many years of additional spending or many years of additional tax cuts that the city might not be able to afford.
But Marilyn Rubin is less sure. She teaches public policy at John Jay College.
MARILYN RUBIN: I'd like to see other options. I mean, there are a lot of things that the city could do with the money.
Maybe next time. Many are already expecting another surplus for the city next year.
In New York, I'm Alisa Roth for Marketplace.