All city agencies have been ordered to tighten their belts and make budget cuts for the new fiscal year.

Mark Page, the city?s budget director, sent a memo to all agency heads Tuesday announcing the plan. The agencies are being told to cut their budgets by 3 percent for the new fiscal year beginning in July.

The move is expected to help add $500 million to city coffers. The cuts are being ordered to help replace an estimated $700 million cut in state funds for the city.

Mayor Michael Bloomberg took aim at both the governor and state Tuesday, saying the $700 million being held back is money the city has been sending to Albany. According to Bloomberg, that money belongs to the city and should be sent back.

The budget cuts could be accompanied by property tax increases and a cut of more than $320 million for city schools.

State officials have responded to Bloomberg?s comments, calling his money estimates inaccurate and misleading.

AP wires contributed to this article.