Mayor Bloomberg and the City Council reached a deal on a new fiscal budget, which will restore $17 million to the FDNY, officials said. That would prevent layoffs in the fire department as well as closures of firehouses.

Four fire companies had been marked for closure in July: Ladder 53 in the Bronx, Engine 4 in Manhattan, Engine 161 on Staten Island, and Engine 271 in Brooklyn. The prior proposal also called for the closure of another 12 companies in January 2010. The budget deal would allow the city to avoid these closures and also keep open a firehouse on Governors Island during events there.

"I'm gratified that we are able to announce an agreement to protect core city services, and keep New Yorkers healthy," said Majority Leader Joel Rivera. "In these most difficult economic times we are able to protect the most vulnerable New Yorkers in restoring budget cuts to the Administration for Children's Services, and we're also able keep people safe and firehouses open."

The budget includes a sales tax increase of .5 percent, which the mayor said will raise more than $500 million in fiscal 2010. If Albany approves the hike, the city's sales tax would go up to 8.875 percent.

Officials said the city was facing a $6.6 billion budget hole in 2010.