Wall Street Cutbacks Pose Challenge as Bloomberg Prepares 2012 NYC Agenda

Bloomberg, 69, who is beginning the penultimate year of his third and final four-year term, plans to outline his 2012 agenda today in the annual State of the City address. The mayor of the most populous U.S. city has forecast a $2 billion gap in a $70 billion budget.

“This year will be the biggest challenge in a fiscal sense because the fragile nature of the U.S. economic recovery and the political climate in Washington and Albany doesn’t leave room for tax increases and borrowing,” said Kathryn Wylde, president of the Partnership for New York City, a nonpartisan association of corporate chief executives.

Wylde said her group expects Wall Street bonuses to drop as much as 40 percent this year as regulators curb banks’ risk- taking in a city where the financial industry accounted for 7 percent of tax revenue last year. That’s down from 14 percent in 2007, according to state Comptroller Thomas DiNapoli. New York’s finance, real estate, insurance and banking industries, which employ about 317,000, may shed 10,000 jobs this year, DiNapoli has said.