 Mayor Giuliani inherited a deficit from his predecessor, David Dinkins.During its first term, the Giuliani administration cut taxes, cut spending, and reduced the municipal payroll, thereby closing the budget gap.By Giuliani's second term, the upward swing of the mid-late 1990s dot-com bubble, which especially benefited New York's financial sector, resulted in greatly increased tax revenues for the city; soon there was a budget surplus of .