Tin Cup Replaces Tin Box
By Henry J. Stern
February 24, 2003

    For ten months, I have been warning about New York City's fiscal condition, and the slowness of the city's reaction to it.  The prior columns are available on our website, www.nycivic.org.  The first one, "The Gathering Storm", was published on April 29, 2002.  It seems it has taken even more time for the city to attack the fiscal problem than the President has taken to go to war.

    Of course, there are justifications for all these delays, rounding up allies or partners, giving others a chance to mend their ways, seeking alternatives, etc.  And one must resist the writer's temptation to blame decent people for not doing things they may not have been ready, willing or able to do at an earlier time.  "The mills of God grind slowly..."

    Nonetheless, there are certain externally imposed deadlines.  The Mayor's executive (proposed) budget is due in April.  It must, by law, be balanced.  Even with the massive property tax increase, and the general belt-tightening that has been going on in city agencies, the budget is still over three billion dollars out of balance.  Something will have to happen relatively soon to narrow, and then close, this gap.

    We begin with the four horsemen of budget reduction:

1. Higher taxes, although they have already been raised.
2. Lower labor costs, which requires union cooperation on schedule and rules changes.
3. Additional state aid, which was not offered in the governor’s budget, except by passalongs of federal money and one shots (a quick fix for one year, non-recurring).
4. Reducing the workforce by layoffs, pursuant to Civil Service rules.
   

    There are other choices, possibly even less satisfactory than the four listed above:

1. Borrowing money, which is letting our children pay, with interest, for our excesses.
2. Sale of city assets, like the airports and the waterfront, maybe a few parks.
3. Taking an advance against tobacco receipts, or other future revenue streams.
4. The usual fiscal juggling, at which the city is necessarily expert, where certain revenues are collected before their due dates, and expenses deferred to the next fiscal year.

    The longer it takes to decide what to do, the more severe the inevitable cuts must be. Time does not favor procrastination.  But, to be fair, no one official can solve this problem, and we will have to wait until agreement is reached. That conflict resolution may be induced by a sense of great urgency and impending disaster. "Nothing concentrates (or clears) the mind like the whisper of the axe." (We couldn't find the citation tonight, if someone gives us the source we will let you know.)

    Our governmental parent is located in Albany, where this year the ruling triumvirs are said to hold each other in unusually low regard.   The State is unlikely to adopt its own budget for many months, long after the city’s deadline, which is June 30.  Our mayor tried to encourage celerity by issuing a budget message on January 28, one day before the release of the governor's proposed budget.  That appeal has so far been ignored, which is a tad better than being rejected.  Albany's apparent attitude evokes the T-shirt message, "What part of no don't you understand?"

    The Mayor's good manners did not, however, injure the city's cause.  He could have wailed like a banshee, denounced Albany, promised revenge, threatened litigation, or engaged in traditional New York street theater.  That would have attracted attention, for which the city would ultimately have had to pay.  He was smart to be polite, especially considering that the state holds all the face cards.  This great nation is, after all, the United States of America (See the Declaration of Independence and the Constitution.).

    The core problem: How can a city survive and prosper in a federal union of sovereign states ?

    Are there any old or new ideas in cyberspace on how to deal with this issue ?


P.S.: Secession is not the answer.  The South tried it in 1861, at enormous cost.  West Virginia seceded from Virginia in 1863, and made it stick with the help of the Grand Army of the Republic.  Staten Island tried it under Mayor Dinkins, but Shelly Silver, to his credit, frustrated their will, and the Island provided the votes to elect two Republican mayors, Giuliani and Bloomberg.  

    If we could secede, what would the remains of the state be called: Albania, Buffalonia, Ontario, Mohawk, Ronkonkoma? It could be named  for its largest casino.  Remember, New York City is the straw that stirs the drink, the cash cow and the golden goose, all in one. "Once you have found her, never let her go."

P.P.S.: If there is anything in this article you do not fully understand, please do not hesitate to call or e-mail Ginger Nut. He will cheerfully explain it you.

Henry J. Stern is the director of NYCivic.