NYCivic - The Greenhouse Effect

The Greenhouse Effect
Can a Benign Bloomberg Balance a Bloated Budget without Bloodshed or Bitterness ?
By Henry J. Stern
January 24, 2003

Mayor Bloomberg's second annual State of the City address, delivered in a sun-drenched greenhouse at Brooklyn Botanic Garden (not Botanical, like the New York, Queens and Staten Island BGs), was as honest as these orations can be.   If he had told the unvarnished truth, his popularity would have dropped to match the temperature. An important part of the mayor's job is to be sales manager and cheerleader for New York City.   He is also, of course, the CEO and since the Comptroller is independently elected, he serves in good part as his own CFO.

In each of these roles, he could have given a different speech, but as a multi-tasker, or more accurately, a multi-taskmaster, he had to make all the points himself, in series.   He was warmly received, which is always encouraging.   His speaking style has improved in the last year. He expounded on the city's great strengths, and judiciously ignored its weaknesses; he described its financial situation with optimism which remains to be justified by events. One reason for hope here is that you never know whether the big boys will help you in the end, when they have reduced you to abject begging. (Not to mention trying to make off with your airports.)

The Mayor described some of his administration's achievements with justified pride, and promised new ventures like the 311 phone system and a commission to streamline city procedures and reform the structure of agencies. He asked for the assistance of labor unions, whom he accurately described as necessary partners. At the same time, he said that city employees would receive no increases in pay, unless additional productivity gains were made beyond what he had already sought.

The speech was a brave one, evoking in a way the boy who stood on the burning deck, and we were proud to see him plugging away for New York City. The question is, and was, and will be, how will he get anyone else (Albany, Washington, unions, courts, the City Council) to take the steps that must be taken to meet the $3 billion budget gap for fiscal 2004. Yesterday, he carefully avoided the L-word, using this language:

"Without productivity improvements, we will simply not be able to support the current labor force – and will have no choice but to reduce our workforce faster than attrition and early retirement programs will accomplish."

The Mayor talked about partners and friends in government, and yes, they are fellow Republicans (although it is not at all clear to what extent they regard him as a true believer). However, even your partners and friends may not give you money or extend credit to bail out an operation they consider fiscally overgenerous and undisciplined.

One thing the Mayor did not mention is that there does remain fat and waste in the city budget. Hopefully his new commission will get at much of it. But no one can rationally argue that every dollar of the $42 billion budget is spent wisely or well. The Mayor's credibility will be enhanced when he comes to accept this disagreeable reality, and incorporates it in his overview of city government.

Another challenge lies in the fact that if the Governor will have to lay off thousands of state employees to balance his own budget (and his gap is $12 billion), why should he give the mayor, or allow the mayor to raise, money to avoid layoffs (and look like a miracle worker). It is bruited about (in the New York Observer's lead story) that Bloomberg aides, recalling how much the mayor helped, and he did help, to re-elect Pataki, wonder why no more state aid is forthcoming.   It may well be that the governor feels that the mayor's assistance to him simply reciprocated the governor's support for the mayor in the 2001 mayoral nomination and election, (it is rare for a recent convert to head a party ticket) and that now the two titans are even-Stephen.

On Wednesday afternoon, at the Waldorf, Governor Pataki spoke to a special meeting of the Association for a Better New York (ABNY) on the state's fiscal crisis.   He repeated the mantra 'No new taxes, no deferral of impending tax cuts, jobs before taxes.' He said it about seven times in a relatively short speech - the only thing left out was the first President Bush's ill-fated promise: "Read my lips. No new taxes". This brings the governor back into the Republican mainstream after his liberal aberration last year when he was running for re-election. Fortunately for him, there is no Republican gospel which opposes raising SUNY tuition 41% or other fees proportionately. The governor's position may be good party politics, although the selection of New York City for the convention should raise his odds in the Cheney succession sweepstakes from 100-1 to 500-1.

Pataki's regression to his first term is ominous for New York City, and probably fatal to any restoration of the commuter tax, which was given away in 1998 by Sheldon Silver and Denny Farrell (chair of the Assembly Ways & Means Committee, now New York State and New York County chair of the Democratic Party) in the most foolish and anti-City political move of the generation. However, both gentlemen have only prospered politically since their act. The governor's stated theory is that when economic growth comes, as a result of low taxes, the whole state will benefit economically, including the city. It should only be.

On Wednesday morning, and I don't want to sound like Samuel Pepys, there was an unusual conference at Baruch College. Nine budget directors of New York City, the incumbent Mark Page, and eight predecessors, going back to David Grossman who served under Mayor Lindsay, opined on the current fiscal crisis and told war stories about the last one. To jog your memory, the other participants were Jim Brigham, Alair Townsend, Philip Michael and Paul Dickstsein (Koch), Carol o'Clearican (Dinkins) and Abe Lachman and Adam Barsky (Giuliani). They were seated on a dais in an arc, which reminded me of the United States Supreme Court (seven men and two women). For me, the forum was a great nostalgia trip.

Their message was that Fiscal Crisis III was both more and less serious than Fiscal Crisis I (1974-76). It is less serious in that the city is not facing imminent bankruptcy because the banks would not renew billions of dollars of short-term debt. It is more serious in that there is a fundamental imbalance, with expenditures far exceeding revenues, aggravated by 9-11 and its costs, and the decline in Wall Street in particular and the economy in general.   Paul Dickstein gave the most pessimistic view, or was the most candid, depending on how you call it. One thing they all ignored, because the nine are basically very smart and verbal techies, was the role of politics and mayoral needs in setting budget priorities. Rule 20-X "That's not my department," (says Wernher von Braun).

Note of appreciation:

Many of you have written or said really nice things to me about my last column, Try a Large, Friendly Dog. Although I am touched by what people communicated to me, I hope that your expectations for these columns have not been raised unduly. I am not a professional writer, and I am also aware that some subjects are simply less interesting than others, although they may be just as important.
What I try to do is to enlighten people about city government, from the unique perspective of an insider, or former insider, who is not currently in bondage to any of the larger egos that inhabit politics. That is not said pejoratively; smaller egos generally do not seek public office. Anyway, thanks for your kind words, which give me great encouragement.