Mayor Michael Bloomberg on Thursday unveiled a revised budget for the 2014 fiscal year, where he said that despite a increase in revenue from the capital gains tax planned cuts will move forward.
The mayor says the $69.8 billion budget remains balanced without raising taxes.
It includes $1 billion in new revenues fueled by an increase in capital gains taxes.
However, it projects a $2.2 billion shortfall for fiscal year 2015.
The mayor's financial plan updates a budget from January. Some things are better, as Wall Street profits jumped and city employment improved.
"The news today is, I think, reasonably good, as good as it's been in a long time," Bloomberg said. "The city is doing well. All the statistics - crime and school performance and tourists, number of jobs - all of those things are going in the right direction."
With the $1 billion additional revenue, the number of teachers also won't decrease after 700 school positions weren't filled this year.
Washington is also paying for cleanup from Hurricane Sandy.
However, the mayor's budget still calls for cutbacks. The budget still proposes that the city shutter 20 firehouses, reduce thousands of child care slots and cut 2,500 teaching and guidance counselor positions through attrition over the next year.
"We handled the flood in dramatic conditions like probably nobody's ever done before, and that's why we need all of our resources," said Fire Commissioner Salvatore Cassano. "And that's the case that I'll make in front of the City Council."
The City Council also has longer-term budget strains. Most city workers are without a contract, and the mayor sounds like he's given up expecting to reach deals.
No contracts may sound like cost savings for the city, but it's not. State law is seen as favorable to unions. It freezes benefits, meaning their total compensation still goes up after the expiration date.
City Hall said that total employment costs have gone up 71 percent since 2002, even though it said the city has 14,000 fewer employees.
Ruling out tax hikes, Bloomberg wants city workers to start paying part of their health care, like most private sector employees do.
"The next mayor, for the next four years, is going to have to face the fact that our expenses keep going up, and the public doesn't want to pay anymore," Bloomberg said.
Bloomberg noted pensions, benefits and union contracts are among the biggest expenditures.
"There is also this issue that people say, 'Oh, the next mayor will have to come up with retroactive pay raises.' That's just not possible. Bankrupting the city is overstating it, but taxes will have to rise dramatically," Bloomberg said.
There are other unknowns. The budget still banks on an as-yet resolved sale of 400 taxi medallions, which account for $300 million.
Negotiations over the plan will now begin in the City Council.
The final budget is due at the end of June.