Tighten Belts, Bloomberg Tells Officials

Mayor Michael R. Bloomberg, responding to shrinking revenues from a cooling economy, imposed a hiring freeze for all agencies yesterday and directed commissioners to devise spending reductions of 2.5 percent this fiscal year and 5 percent in the next.

It is the first time officials have resorted to a citywide plan to make cuts since October 2002, when the budget was still reeling from the aftershocks of the Sept. 11 terror attack. Since then, the city’s superheated real estate market and fat payouts on Wall Street have led to surpluses, including a record $4.4 billion in the last fiscal year, which allowed the mayor to increase spending and services while cutting taxes and offering rebates.

But the mayor’s latest move, which came on the same day that the state comptroller said turmoil in the credit and housing markets would batter Wall Street and take a toll on tax revenues for the city and state, is a sign that Mr. Bloomberg’s regular predictions of tighter times are coming true.