Friday, June 24, 2011

NYC faces layoffs despite having reserve cash: mayor

NEW YORK | Fri Jun 17, 2011 6:33pm EDT

(Reuters) - New York City is in the odd position of having both $500 million of cash reserve and a multibillion-dollar deficit, which Mayor Michael Bloomberg plans to close partly by laying off workers.

The cash reserve, called the Health Insurance Stabilization Fund, was set up over two decades ago to help deal with a spike in healthcare costs for city workers.

"There's $500 million sitting in the fund and there's no prospect it's ever going to be used for anything. It just sits there," Bloomberg said on his Friday WOR radio show.

New York City tapped the fund a couple of years ago partly to avoid layoffs.

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