Bloomberg plots collision course with city's heroes

The new Mayor of New York, Michael Bloomberg, is demanding that heads of all the city's main agencies, including the police and fire departments, cut up to 20 per cent of staff to help the city face a post-11 September cash crisis of about $4bn (£2.8bn).

By directing his attention straight away to New York's looming budget difficulties, the Mayor sworn in on Tuesday to replace his immensely popular predecessor, Rudolph Giuliani, has ensured he will have no honeymoon period, at least not with the city's workers. The notoriously aggressive unions that represent the city workforce are unlikely to bend easily to any cuts.

"Everybody has just got to understand we have to find a way to do as much as we can with less," Mr Bloomberg said, pledging in his inaugural address to cut the staff of his own office by 20 per cent. He is also keeping his promise to take an annual salary from the city of only one dollar.

The economic slowdown in the city, aggravated by the fall-out from the events of 11 September, has wrecked its financial outlook. Free-falling tax revenues mean that New York faces grave budget shortfalls of between $4bn and 5bn annually for three or four years.

Mr Bloomberg ruled out raising taxes this week, which he believes would only drive more businesses out of town. The only alternative is to cut spending, he insists. "Clearly we are going to have a deficit and clearly, if we can't find other sources of revenue, we'll just have to do more with less."

He has added that he hopes to lose payroll numbers mostly through attrition. He will also look at other accounting means to save funds. "We're going to have to find some ways, whether it is payment later for services now, or adjusting pensions so that people still get their monies but the timing is different, or finding ways to do more with less so if people leave the system through retirement you just don't replace them," he added.

At least two of the city's premier arts institutions, the Lincoln Centre and the Metropolitan Museum of Art, are also likely to suffer from the Mayor's parsimony. Both are theoretically due lump sums from the city to help to fund expansion projects. But Mr Bloomberg has indicated the grants may have to be delayed.

That may be especially painful for the Lincoln Centre, which recently had Mr Bloomberg as a board member. The complex, which has detailed a 10-year rebuilding plan with a $1.2bn price tag, was expecting the city to contribute $240m. "It is like everything else, it is going to have to be put in line and we'll see," the Mayor said when asked about the project.

He also indicated that he favours the commercial redevelopment of the area now known as ground zero where the destroyed twin towers once stood. Mr Giuliani had publicly suggested that most of the space be reserved for a soaring monument to those that died in the terrorist attacks.

The new Mayor has also made a symbolic break with the past by eschewing what would have been his corner office in City Hall and taking a desk in a so-called bull-pen area – a maze of open-plan work stations with eye-level dividers.

He favoured the same arrangement at Bloomberg LP, the communications giant that he founded and used to head until this week.

In campaigning for Mayor, he said he would manage the city much like he did his very successful business. The bull-pen lay-out in City Hall suggests he means to stick by that promise.

"I'm a believer in openness," Mr Bloomberg boasted during one of several appearances this week on network television news shows. "It applies to me as well as it applies to everyone else. Sitting out in the open I think is the best way to encourage communications, to hear what's going on."

City officials meanwhile confirmed that some of the 13 bodies pulled from the wreckage of the World Trade Centre on New Year's Day were more or less intact. Most belonged tofirefighters, who were in the lobby of one of the towers when they collapsed.

Fears that the victims may have been living for days beneath the rubble of the structures are likely to be misplaced. The heavy clothing of the firemen might have protected their bodies but it seems probable that they died instantly from the trauma of the crushing force of the concrete.

A New York judge has sent a man to prison for 21 months for giving a false tip to the FBI about an Arab-American he falsely claimed was connected to the 11 September attacks.

Jack Barresi, 38, pleaded guilty at trial, saying he was "ashamed and embarrassed" for putting the FBI on to the Arab-American boss of his fiancée. He had previously argued with the man about his treatment of female employees.