Angry New Yorker

Tuesday, June 10, 2003
These Budgets Unravel Again and Again and Again
By Harvey Robins, June 4, 2003, Copyright © 2003, Newsday, Inc.

"Have we learned so little from the 1970s' debacle that we need to be at the brink again for our civic leaders to act?

In the coming days, the mayor and the City Council will adopt the budget for fiscal 2004, which begins July 1. Afterwards, I see a much harsher place in which to live, thanks to the four men who have put Mayor Michael Bloomberg in a fiscal straightjacket: Gov. George Pataki, Assembly Speaker Sheldon Silver, former Mayor Rudolph Giuliani and former Council Speaker Peter Vallone.

We're in this dire strait for reasons beyond the U.S. recession and the aftermath of 9/11. In the last two years of his term, Mayor Giuliani, a Republican, created a $3-billion budget gap while increasing spending 7 percent and 9 percent, respectively, as the city's economy was tanking. Speaker Silver, a Democrat and a resident of the Lower East Side, lost the city $500 million a year by repealing the commuter tax in 1999 for shortsighted political reasons. Former Council Speaker Vallone, a Queens Democrat, was legislatively cowardly, freezing the relatively low property tax for 10 years as the pressure built for this year's 18.5-percent increase. Republican Gov. Pataki has been AWOL for the past two years, in denial about the worst fiscal crisis since the 1970s - some say since the Great Depression. These four men dug the fiscal hole the city is now in.

Last June, Mayor Bloomberg and the City Council passed a budget that unraveled within weeks, and we are headed for a repeat this year. All the players and the schedule of events are in place for this year's budget fandango. Some significant service restorations will be made as a compromise for passage of the fiscal 2004 budget. The Financial Control Board and the bond-rating agencies will "bless" it, while expressing some vague concerns.

By September, the city will need to modify its current budget to keep it in balance because Albany and Washington will have failed to contribute significant and sustained revenues, and because the municipal labor unions will have rejected the mayor's proposals for cost efficiencies leading to greater productivity, such as expanding the work hours, changing the work rules and rolling back benefits.

Albany's recently passed budget will also unravel, requiring the State Legislature and the governor to reconvene in the fall to rework it. And more red ink is projected in the out years.

As contentious as the state budget process was, it did not bring lasting fiscal reform. The governor failed to press the Port Authority to pay the mayor $600 million in back rent for JFK and LaGuardia airports and agree to $90 million in annual future rent. The Legislature failed to approve East River bridge tolls and "congestion pricing" on Hudson and East River crossings to generate $200 million in annual revenue to the city. No progress was made in changing the mass-transit aid formula in which the city gets only 63 percent of the aid even though it has 84 percent of the ridership. This aid inequity translates into an annual loss of $325 million or an equivalent 35 cents of the 50-cent recent fare hike.

Neither the governor nor the Legislature found a way to restore the city commuter tax, which has lost the city $2 billion over the last four years. They also failed to control skyrocketing Medicaid costs, eliminate the Wicks law to cut the cost of public construction or tackle tort reform to prohibit outrageous lawsuit claims.

On the city's budget front, both the mayor and the City Council have not made enough progress in the last two years to streamline government services, nor have they secured structural tax and labor reform. Until these tough choices are made, structural budget balance will continue to be little more than rhetoric. Furthermore, the gap is estimated to be $2.9 billion in fiscal 2005, according to City Comptroller William Thompson. In fact, according to the Independent Budget Office, revenues will grow at 1.6 percent while spending will grow at 3.6 percent, or more than twice as fast, over the next two years.

On the city's service front, our parks will be littered with glass and other dangerous debris. The few public toilets in them will fall into disrepair, no more useful than the upside down john placed in an art exhibit by Marcel Duchamp in 1917. City streets will be noticeably dirtier, and rats, always a health menace, will multiply unchecked. Libraries, museums, recreation facilities and senior centers will reduce hours and programs. Some senior centers and health clinics are likely to close entirely. Albany will hit students at CUNY's four-year colleges with a 25-percent tuition hike for what were once free universities, even in much leaner times than these. And, tragically, we can expect the homeless population to grow beyond the 10,000 families the city now shelters.

Moreover, despite a 33-percent increase in the subway and bus fares today, it is very likely that the fares will increase again in 2005 as the city and state cut their operating subsidies to the MTA-shifting the burden to riders once again.

The dismal quality of our civic leadership mirrors this mediocre period in our history. Although solutions to our crisis abound-in fact, most of these ideas have been around for decades-what's missing is the political will to do what is absolutely necessary."

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