Bloomberg vows to 'rebuild, renew' New York

Michael Bloomberg takes the oath of office Tuesday from New York state Chief Judge Judith Kaye, left, at City Hall. Bloomberg's daughter Georgina, second from left, and his mother, Charlotte, also were on hand.

NEW YORK (CNN) -- Billionaire businessman Michael Bloomberg took office Tuesday as New York's 108th mayor, vowing to rebuild the city in the aftermath of the September 11 terrorist attacks and to build on the successes of his predecessor, Rudy Giuliani.

"We will rebuild, renew and remain the capital of the free world," Bloomberg said in his inaugural address on the steps of City Hall, not far from where the World Trade Center's twin towers once stood.

Bloomberg said his administration would work to honor the memory of those killed in the attacks.

"Here in New York, we understand all too well the price of liberty," he said. "Just half a mile from these steps, we lost 3,000 of our friends, family, neighbors, co-workers, including more than 400 heroes who gave their lives to save others.

"On the worst day in our city's history, we were at our best."

VIDEO Succeeding Rudy Giuliani as mayor of New York, Michael Bloomberg will face the task of rebuilding and paying off debt (January 1) Play video (QuickTime, Real or Windows Media) As mayor of New York, Rudy Giuliani could not afford to let his compassionate side to show -- until September 11. CNN's Deborah Feyerick reports (January 1) Play video (QuickTime, Real or Windows Media)

Bloomberg, 59, takes over from the popular Giuliani at a time when the city must not only overcome the destruction of September 11 but also faces a $4 billion budget deficit. The fiscal crunch, Bloomberg said, will force cutbacks in city services. He pledged to reduce the mayor's office staff by 20 percent and challenged other city leaders to do the same.

Despite his call for fiscal sacrifice, the new mayor said he will work with local, state and federal officials to see the city through to gains in the long term. He vowed to hold the line on taxes and focus on neighborhood services, public safety and the creation of jobs.

Bloomberg said he would push to reform and improve the city's under-performing school system, a goal that eluded Giuliani during his eight years in office. The new mayor also said he would work to ensure that city streets are safe -- maintaining the focus on crime reduction that is one of Giuliani's biggest legacies.

"We will go forward," Bloomberg said. "We will never go back."

The new mayor began his inaugural speech by praising Giuliani, who earned national and international acclaim for his resiliency, compassion and poise in the aftermath of the September 11 attacks.

"In our darkest hour, he was a ray of hope, a voice of reassurance to millions," Bloomberg said. "He made us all proud, and he reminded the world that New Yorkers don't quit."

Bloomberg -- a former Democrat who ran for mayor as a Republican -- was elected in November, winning his first bid for public office after spending $69 million of his own money on the campaign. He was considered a heavy underdog in a city where Democrats far outnumber Republican voters.

But an endorsement from Giuliani -- a fellow Republican -- propelled him to a late surge in polls and to victory.

Before entering public office, Bloomberg started and ran Bloomberg L.P., a global communications company that provides news and financial services worldwide.

He took the oath of office -- administered by New York state Chief Judge Judith Kaye -- in chilly weather in a ceremony attended by many of the state's political luminaries, including Gov. George Pataki and former Mayors Edward Koch and David Dinkins.

Entertainer Bette Midler sang the national anthem at the invitation-only ceremony, which was the third swearing-in since Monday morning. In an unmistakable sign that Giuliani -- a devoted Yankee fan -- was no longer mayor, the master of ceremonies was Al Leiter, ace pitcher for the cross-town rival New York Mets.