Tag: City Hall

With the Mayoral election nearly upon us, it is time to review what the Bloomberg Administration has done, and what (based on limited information) a Thompson administration might do. (Forget the campaign literature and promises: it’s misleading nonsense). The review is in three parts because the Mayoralty is in reality three jobs. Management, since the Mayor is the CEO of a $60 billion multi-function enterprise, the City of New York. Policy, because in combination with the City Council, State Legislature, Governor, and other local officials, the Mayor of New York City helps to determine the priorities and values of state and local government in New York. And Leadership, because the Mayor is a leader (one of many leaders in both the public and private sectors) of 8 million New Yorkers, with an ability to influence how they live and what they believe, above and beyond the role of local government to compel people to do or not do things. This post is on management.

Throughout this review, you will read about many, many examples of ways in which Mayor Bloomberg has been a great mayor of New York City, including some only those with experience in government are in a position to appreciate. But you will also hear about two disastrous, unjust, self serving, future-wrecking deals – deals with consequences that may be sufficiently severe to undo or exceed, over time, any and all of the good things Mayor Bloomberg has done. (The Mayor has done other, similar things, but has been able to reverse them at least in part; these are far worse and probably cannot be reversed). In recent decades, based on the decisions and non-decisions our elected officials have made, I’ve generally been able to follow a simple rule when voting: don’t vote for any NYC Democrats at the local level, don’t vote for any Republicans at the national level, and don’t vote for an incumbents of either party in the State of New York. The question I’ll have to answer by November 3 is whether to depart from that rule.

One of New York’s cycles of ever-increasing unearned privilege and injustice is the granting of special tax exemptions, exclusions, and benefits every time the economy is up (when doing so doesn’t require immediate and thus obvious sacrifices by those who don’t matter), and increasing tax rates every time the economy turns down (due to “circumstances beyond our control”). This bi-partisan policy is politically efficient: it shifts the cost of government to those who matter less, and forces them to pay for services and benefits for those who matter more.

Recently, however, there has been a partial retraction. The special $400 check to those rich enough to be able to own their homes is gone. And the special double income tax for the self-employed is gone for those earning $100,000 or less. I’ll give credit to the Freelancer’s Union and Councilmember Yassky for reducing the Unincorporated Business Tax, and remove blame from Mayor Bloomberg for the $400 check, accordingly.

Last year Governor Paterson and the state legislature covered up the state's fiscal problems until after the election, by passing a budget that was a fraud. This year, Mayor Bloomberg and the City Council have done the same. It happens over and over, and yet Paterson and Bloomberg are different. In each case, they are barely hiding from anyone who bothers to read the newspaper the fact that their budgets failed to address the facts they are thus hiding. "Make no mistake about it, we're going to have to start right now economizing if we're going to get through 2011," the Daily News reported.

The New York Observer is reporting that New York City will propose a relaxation of regulations that limit the opening of new supermarkets in low- and moderate-income neighborhoods. Leading the charge is City Planning director Amanda Burden. “With land use rule changes a centerpiece of the plan, Ms. Burden’s agency, the Department of City Planning, has been pushing the effort with the city’s Economic Development Corporation. Now, a Planning spokeswoman said the city hopes to launch the plan in coming months.” The proposal will apparently reduce parking requirements for new supermarkets, and allow them to open in manufacturing districts without a special permit that takes years to obtain, a restriction dating back to 1974 and the fear that competition from stores was responsible for the decline of manufacturing in the city. Among those quoted in the article is Richard Lipsky, who said “the draft policies were a ‘good step,’ but do not go far enough” to turn around the shrinking number of submarkets in the city. He wants the city to give precedence to new supermarkets when selling off new land.

I guess that since no one remembers what happened at point in time A people can pretty much ignore it once they get to point in time B, whether in public finance or in zoning. I don’t run into my former colleagues who still toil at DCP that often these days, but I can imagine how exasperated some of them are. Let’s take the Wayback Machine to the early-to-mid 1990s to put this issue in perspective, and then go Back to the Future an imagine what else might be prevented from coming along.

It's hard to get motivated to write about the city budget, given that it's too late to do anything about most of the things that have bothered me for so long. The vested interests are vested, powerful and insatiable, and its time to give up on public services for anyone else in the future, or even the basic needs of the less well off, even though this will still be a relatively rich country when it is through getting poorer. It's also hard to say something worth saying, given that what is out there as a proposal may bear little resemblance to what actually occurs from July 2009 to June 2010, and is misleading about even what is expected at this point. So rather than spend time to write a long analysis few people will read or care about anyway, I'm going to make just one point. As predicted and oh-so-predictable, the Mayor's proposal under-funds the massively costly pension benefits the powerful have promised to themselves, deferring while increasing their cost until after his re-election. Just as is happening elsewhere in the country. Are there any philosophers or theologians out there who can assure me that people actually have free will?

In the last month I received a couple of financial communications from the City of New York: a $400 property tax refund check and a $170 property tax increase bill. Even factoring in the cost of the stamp and the hassle of going to the bank to deposit the check, I guess this makes me a “winner” in the special deal sweepstakes that is our government. A winner, that is, assuming that I don’t care about anyone who is a renter, and thus did not get a check, is likely worse off than I am, and if they are in a rent regulated apartment will have the cost of the property tax increase passed onto them (my guess is that in the coming real estate environment market-rate landlords will be eating that increase and much else). And assuming that either my employer does not have a commercial lease that allows such increases in cost to be passed on, or can absorb a higher tax burden without adversely affecting my job. And assuming that I won’t be interested in, or forced to seek, a job with another firm that might be discouraged from opening here by the higher commercial tax burden. But here on Room Eight let’s not talk about what the $400 check means to me. Let’s talk about what it means to Mayor Bloomberg and the New York City Council.

Ever since I started tabulating and analyzing data from the Governments division of the U.S. Census Bureau in the early 1990s, I’ve found that the results are something that no one of any political persuasion has wanted to see. My former supervisors at City planning once presented the data, along with a bunch of other information, to former NYC economic development czar John Dyson. He was so upset that most of NYC’s extra local government taxes as a share of personal income, over and above the U.S. average, went to categories of spending that no business person would consider “public services” that he started ranting “New York stinks” at a conference that very evening. When presented with the same data his boss, former Mayor Giuliani, was not happy to see that NYC’s staffing and spending levels were so high for police and low for education, given that he wanted to make them higher and lower respectively. A housing advocate and city planner grew upset with me when I pointed out New York City’s comparatively high spending on housing and low spending on services such as education and parks, accusing me of immorally “trading off one need against another,” as if that wasn’t what the data showed had already happened. And when I presented the data to the City Planning Commission as part of the preparation of the charter-mandated Planning and Zoning Report, former commissioner Ron Shiffman felt the comparison with the U.S. average made NYC look unfairly bad. “At least compare us with other cities for God’s sake,” I recall him saying. Very well Professor Shiffman, this post and the attached tables contain the comparison you asked for.

Most people who were paying attention saw this fiscal disaster coming from a long way off. Lots of interests affiliated with the public sector decided they had as much right to exploit the rest of us, in exchange for next to nothing, as the Wall Street Robber Barons, since while the money was rolling in they could pretend those Robber Barons would pay for it all. Now, predictably, the money is rolling out. Yet for the Mayor and Council, representing the private and public overlords respectivley, the problem seems to have arisen over the past 24 hours. Remember that a year from now, before the 2009 election.

You have three castes in New York: the executive caste, the political caste, and the serfs. The executive caste rides around in taxis and black cars, or drives their own luxury cars to paid-for corporate parking spaces, lives in the wealthier parts of Manhattan or the more affluent suburbs, and sends its children to private or suburban schools. Its capital gain and investment income is taxed at favorable rates, but this caste nonetheless pays much of the city’s taxes. The political caste drives its own or city cars to public parking spaces reserved for it by placard, receives much its pay in tax-advantaged retirement income and employer-financed health care, lives in the middle-caste suburbs (even if required to live within the city) or in a limited number of suburban-type city neighborhoods, and sends its children to suburban or “special” city public schools. To the extent that in the past there were special “middle income” housing deals on offer, such as Mitchell-Lamas, the political caste got them.

It seems that both the political caste and the executive caste are in favor of extending, in fact repealing, term limits. And based on the polls, the serfs are not.

From what I understand, the Mayor and City Council are having trouble agreeing to a New York City budget because they disagree how bad the city’s fiscal situation is likely to get. The Mayor wants to raise taxes on the less important people who don’t get Bloomberg checks, don’t sell clothes, and are not retired, and reduce services that less important people rely on, to start getting people used to what the future will hold. The Council wants to pretend all will be well, but tax people from out of town staying in hotels at a much higher rate than is paid in tax for other services, while continuing to allow out-of-towners to buy expensive clothes made in China with cheap dollars without paying any city sales tax at all. Like most U.S. politicians, if they aren’t creating a future which is truly horrible, the Council Members feel they haven’t done enough today to “fight for the people” who don’t care about that future.

My own view is that both the Mayor and Council are underestimating how bad things will get. The city’s revenue base is somewhat insulated from the coming recession because the property bubble is only partially reflected in property tax revenues here, and (if we don’t discourage them from coming and make they pay it) spending by foreign visitors will support sales tax revenues even as city residents become poorer and spend less. But the city is heading for a massive decline in personal and corporate income tax revenues. More importantly, the state will be hit even harder by those declines, because such taxes are a bigger part of its revenue base, it the likely result will be state tax increases and spending cuts specifically targeted to hurt New York City as much as possible while sparing other parts of the state, as in the past. We are heading for a crisis a bad as the early- to mid-1990s, with the exception that this time most of the country will be even worse off, not better off as it was back then. In the face of this, I suggest the following…