By Joan Gralla
NEW YORK (Reuters) - New York City's agencies spent almost $1 billion more than expected in the current 2012 fiscal year, partly due to overtime for police and firefighters, a problem that will trigger more cuts in expenses, a mayoral aide said on Friday.
Mayor Michael Bloomberg, who already has ordered nearly a dozen rounds of budget cuts since 2007, forecast that the city will collect only an extra $81 million from now until the next fiscal year's budget ends on July 1, 2013.
Bloomberg, a political independent, will have dismantled one of his legacies as a fiscal conservative when he finishes his third and final term in 2013: the establishment of a fund to pay for city employees' retiree healthcare.
The last $2 billion remaining in that fund will be spent in the next two fiscal years, said the aide, who requested anonymity. But the city's outstanding obligation to its retirees is almost $84 billion.
The city's high overtime expenses are often criticized by fiscal monitors.
Last winter's spate of snowstorms and this summer's Hurricane Irene drove up overtime for sanitation workers.
The city's economy -- which would rank as the 18th largest in the world if it were a country -- depends heavily on Wall Street for revenue. But the European debt crisis has rattled markets and prompted tens of thousands of layoffs by banks and brokerages around the globe.
BAD DAY FOR THE MUSEUMS
New York City is expected to lay off about 250 workers this year -- about half of them at museums and performing art centers funded through the Department of Cultural Affairs. About 320 layoffs are planned for next year, according to Doug Turetsky, a spokesman for the Independent Budget Office.
The City Council, which is led by Democrats, must approve that plan.
Libraries and the Transportation Department are also targeted for layoffs next year. About 1,100 jobs this year and next will be cut through attrition.
The Department of Education was spared personnel cuts, a contrast with the early fall layoffs of school aides.
About $226 million in police overtime was added for this year and $240 million more a year after that, Turetsky said. The Police Department will have a hiring freeze for civilians; the Fire Department will cut 44 civilian jobs through attrition this year and 29 people next year.
Close to half of the savings after 2013 -- when the mayor's third and final term ends -- will not produce recurring savings, Turetsky said, noting this is a break from Bloomberg's usual policy. Specifically, the agencies will cut $1.5 billion this year and next, but in 2014, the savings shrink to about $630 million.
The mayor is counting on an extra $1 billion from selling more taxi medallions in next year's budget.
Funding increases include the Young Men's Initiative, which helps disadvantaged minorities. But a program by the Department of Homeless Services for apartments to be shared by small families with children will save $11 million in this year and next year.
(Reporting by Joan Gralla; Editing by Jan Paschal and Dan Grebler)