Hard economic realities are hitting New York City, with Mayor Michael Bloomberg deciding on Thursday to cut City Hall's workforce by 3,000 and end contracts of 1,000 police officers, news reports said.
Bloomberg also plans to raise income tax for residents by either 7.5 percent or 15 percent, depending on their incomes.
News reports said the job cuts will be just the beginning of a slew of other measures to deal with a budget shortage and severe drop in the city's revenues from sales tax, caused by the economic downturn and the Wall Street slump. New York City's sales tax stands at 8.5 percent, one of the highest in the US.
"The gravity of the budget situation requires us to propose both deep spending cuts and revenue increases," Bloomberg said. He also reneged on a promise to give residents $400 in property tax rebate.
"Every city agency must push each dollar further," Bloomberg said. "We're going to do that, and doing that means making hard choices that will not be popular with everyone or perhaps anyone."
Some City Council members have already voiced opposition to the drastic measures at a time of economic hardship brought on by the financial crisis.