Which is it, NYC, a Surplus or a Deficit?

I keep hearing from union leadership that NYC has a budget surplus and can easily afford to pay the faculty more. On the otherhand, I keep hearing the mayor talk about a deficit and call for austerity. So which is it? I'm confused.
The Gothamist report on the 2006 city budget notes a projected $3 billion dollar deficit. Similarly, Gothamist reports a state budget deficit. Is my union's leadership crazy or wrong? Where do they get this idea that there's a surplus?
According to the comptroller's office, there was an unprecedented budget surplus in fiscal year 2005, but that's being used to pay for the 2006 budget, which, they say is not in deficit, but is balanced. Where is all the money going then?
As the Daily News reports,
Some budget experts chided the mayor for allocating all of the surplus to next year, instead of distributing it over several years. Bloomberg projects a $4.5 billion deficit in the fiscal year beginning July 1, 2006. Nevertheless, the mayor wants to keep the $400 property tax rebate for homeowners, the centerpiece of his budget proposal from last year. He also proposed ending the sales tax on clothing and footwear purchases under $110, beginning June 1, a proposal that requires the Legislature's approval. If enacted, those changes would save taxpayers $500 million. Bloomberg proposed a slew of budget restorations to city agencies, including $50 million to the Education Department, $17 million to the Fire Department and $7 million to libraries. The mayor also reduced his federal aid request to $50 million from $250 million. He noted that the state failed to provide $183 million in requested aid. Randi Weingarten, head of the teachers union, blasted the mayor for saying yesterday he could look cops, firefighters and teachers in the eye and say "there is no money" for raises. "How can that possibly be when you have a nearly $3.3 billion surplus?" Weingarten asked. "It would have been more honest to simply say, 'You are not a priority.'"

Who else is getting our tax dollars in the projected 2006 budget? Isn't there a give-away to real-estate mogul, Michael Ratner in that budget? Does he REALLY need all those tax dollars? What about Goldman Sachs? Do they need the money? Even some republicans don't think so. And, as a final note, if you think that the budget surplus was there because of something called the Laffer curve (an economic theory that made it to the Wall Street Journal editorial page in the 80s from a cocktail napkin), you should read this article from the Center on Budget Policy and Priorities.