How will taxi roadblock affect the city budget?

The Bloomberg Administration told a judge yesterday that it will not appeal a court injunction against the mayor’s move to license livery cars for street hails in the outer boroughs and add up to 2,000 more taxi cab medallions. The mayor had obtained approval from the state legislature after failing to win support of the City Council. Acting State Supreme Court Justice Arthur Engoron said in a decision last week granting a preliminary injunction that the mayor’s maneuver raised the question of whether the city violated the state constitution’s provision of home rule, which gives cities jurisdiction over their own affairs.

The taxi tangle has serious consequences for the city budget. The mayor’s executive budget had counted on revenue from the sale of new medallions and licenses to contribute $1 billion to the city’s $68 billion budget for next year. The clock is ticking. State law and the City Charter require New York City to balance its budget between revenues and expenses, and the mayor and City Council must come to an agreement by June 30.

So today’s question is: How will the mayor’s setback on taxi expansion affect next year’s budget?

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What we found

The court did issue an injunction, but keep in mind that it was temporary. Judge Engoron is still reviewing the case and has promised to make a final determination soon. “The challenged statute’s authorization of 2,000 new taxi medallions that are expected to generate $1 billion in revenue — and provide wheelchair-accessible taxis as well as safe and legal taxi service outside of Manhattan’s central business district, together with outer-boro service — makes this case’s prompt determination critical,” wrote Corporation Council Michael A. Cardozo in a statement to The New York World. “We believe that an immediate resolution, rather than appealing one interim ruling, is in everyone’s best interests.”

If the judge maintains his stance — and he has signaled he may, since he called the city’s action an “unconstitutional power grab” — the mayor would have until next November to modify the budget to accommodate the impact of the loss in anticipated revenue from the medallion sales. “A budget is a plan,” stressed Independent Budget Office’s Communications Director Doug Turetsky. ” Its estimates are not written in stone, and you make adjustments as the budget year proceeds.” According to the city, the court should make a decision within the next few weeks, just around the time that Bloomberg and the City Council must reach their budget deal.

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