Latest News

He cited the improving national economy, the recovery on Wall Street and the city's increasingly diversified economy as reasons the city was in decent financial shape.

In his final budget proposal after 11 years in office, Mr. Bloomberg said that New York schools could be hit the hardest, mainly as a result of the failure to reach an agreement with the teachers' union over an evaluation system.

"We expect our schools to take a $250 million hit in the current fiscal year," Mr. Bloomberg said. That would mean that there would be hundreds of fewer teachers, mainly through attrition.

While noting the many challenges the city faces, he said the city's $70.1 billion budget would protect all vital services even as individual agencies worked to keep their spending in check.

"The financial plan presented today continues to protect critical services and foster economic growth, while also taking the responsible, budget-minded actions that have resulted in a more efficient city government," Mr. Bloomberg said.

Hurricane Sandy has cost the city $4.5 billion in emergency services and damage to public infrastructure, he said.

"We do expect that all of those costs will be covered by federal funding," he said.

The mayor's budget outline marks the starting point for what will most likely be months of negotiations with city lawmakers before the official start of the fiscal year on July 1.

By law, the mayor and the City Council must agree on a balanced budget each fiscal year.

Mr. Bloomberg said that the loss of education money would have an impact on schools across the city.

To make up for the lost money, the city would keep 700 fewer teachers on the payroll, with staff reductions coming mainly through attrition, "as well as the reduction of funds for extracurricular activities and after-school programming," according to a budget summary provided by the administration.

"The cuts would have a direct and dire impact on classrooms across the city and will be borne by the students who need and deserve high-quality education," according to the statement.

In outlining his budget, Mr. Bloomberg noted the city's continued commitment to education, saying that the $13.9 billion budget for education he proposed on Tuesday was $8 billion more than when he took office.

Mr. Bloomberg said that while there would be no tax increases, he expected tax revenues to be $222 million greater than initial projections.

"I am reasonably optimistic that we will have a small increase in our tax revenues," he said.

But the budget also relies heavily on the cost-cutting measures put in place by city agencies, which he said will result in $6.5 billion in savings in 2014.

Administration officials had already warned city agencies about the likelihood of deep cuts, projecting a steep budget shortfall.

Mr. Bloomberg reiterated his warnings of coming fiscal pain during testimony in Albany on Monday, when he urged the State Legislature to intervene so that the city did not lose hundreds of millions of dollars because it missed a deadline this month to finish negotiating a teacher evaluation system.

He had also hinted, more broadly, of belt-tightening in November, when he unveiled a plan to cope with a budget shortfall for the rest of the current fiscal year, which ends on June 30.

He noted that because his plan to sell 2,000 new yellow-taxi medallions was still tied up in the courts, and up in the air, and because any additional costs related to Hurricane Sandy had not yet been determined, he felt that he had to slash a slew of programs.

While there was talk in the administration about an increase in school-lunch fees to $2.50 from $1.50 — which would have netted the city an extra $4.4 million — the plan was not included in Tuesday's budget address.

The idea was shut down by Christine C. Quinn, the City Council speaker, according to city officials.

The mayor's proposed budget could change significantly after wrangling with lawmakers.

Last year, for instance, additional money that poured into the city's coffers enabled the city to avoid cutting child-care and after-school programs, and to keep open firehouses.

But this year's budget "sidesteps some crucial issues," according to the city's Independent Budget Office, like uncertain education funding, Medicaid reimbursements, taxi revenues and expired labor contracts.

"While projected budget gaps may currently appear modest — certainly when compared with gaps faced in some recent years — the next mayor and City Council are likely to face significant budget challenges," the budget office concluded.

When Mr. Bloomberg took office, he inherited a $4.8 billion deficit in a $42.3 billion budget.

Mr. Bloomberg vowed that he would not pass along a similar debt to his successor, making a habit of stashing away extra revenue in years when the city ran a budget surplus.

"I'm determined that when I leave the city, we won't have, my successor, the first year in office, won't have enormous deficits to deal with," Mr. Bloomberg said in 2007.

Despite the challenges the city faces, Mr. Bloomberg said he was determined to keep the budget balanced while not cutting essential services.

When asked to reflect on how he felt presenting his final preliminary budget proposal, Mr. Bloomberg sounded wistful and hardly ready to move on.

"I would be hard pressed to come up with anything that I have had to do in the last 11 years and almost one month that I did not enjoy and look at as a challenge," he said. He said that there were still 336 days left in his term and that he planned to make the most of them.

"The best days for this city are yet to come," he said.