New York City is entering one of it's most difficult periods in more than 30 years. Not since the fiscal crisis of the 1970s has the Big Apple been in such a financial crunch - including the aftermath of 9-11.
In the public sector, it is estimated that there is a $3.8 billion budget deficit facing NYC in 2009 and an even greater deficit coming in 2010 and beyond. In the private sector, it is estimated that nearly 200,000 jobs will be lost in NYC over the next two years, with recently laid off people already desperately looking for work. The unemployment rate, already a full percentage point above last year's rate, is expected to grow significantly.
Due to this recent crisis, the City Council, the Mayor and an important billionaire have decided that "expert" financial manager, Michael Bloomberg, should stay in office for a third term. He, they claim, is too important to lose at this critical time. Mr. Bloomberg has recently stated, "We all know there's a train coming down the road and it's headed straight towards us and we have to address these issues no matter how difficult they are."
In 2002, Mayor Bloomberg faced a similar problem. Unlike 2001, this fiscal crisis is not the type of event that more directly affected the City of New York more than any other part of the country. Today's crisis is a global economic slowdown and may require a more nuanced solution.
Yet, I believe that the best way to determine if Mayor Bloomberg is so "indispensible," and worthy of a third term, would be to evaluate how well he handled the fiscal crisis of 2002 - of course, with the advantage of hindsight. Surely if he's desperately needed now, Mr. Bloomberg would be able to show a glimpse of what he would do going forward with today's crisis from his past work.
Before he proposed his 2003 budget - the first one he was responsible for, he said...''We will not solve that problem without pain,'' Mr. Bloomberg warned yesterday. ''We are going to have to stop doing certain things. And that is going to be contentious, painful.''
That phrase is, surely, the type of rhetoric one would expect to hear from a Mayor who is tauted as a fiscal/economic expert deserving of an extra-legal, unprecedented third term. Today's supporters of Bloomberg, like those of the past, expected the "pain" the Mayor was talking about to be represented by reductions in government services, reductions in pay for public employees, reduction in public employee headcount, etc...Cost cutting "pain." At a minimun, even if not painful, there was an expectation that this Mayor would be able to institute some cost efficiencies into City government.
But did those strong words match the reality for 2003 and beyond? Unfortunately for the Mayor's supporters, the answer appears to be "no"...
Spending for NYC increased from $41 billion in 2002 to $45 billion in 2003 - an increase of nearly $4 billion year to year or 10%. Where was the "pain?" What "things" did NYC have to "stop doing" to balance the 2003 budget? It seems that little on the spending side was curtailed to help get NYC out of the crisis created by 9-11 and the economic downturn.
Instead, Bloomberg and the City Council decided to overwhelm NYC residents and businesses with significantly increased tax collections - increasing the revenue side of the balance sheet from $27 billion to $31 billion from 2002 to 2003. Surprisingly, spending AND revenues increased by $4 billion or 10%. So much for "doing more with less" - a phrase repeated again and again by candidate Bloomberg in 2001.
Ah, I think we've found the "pain" - $4 billion in new taxes.
Does it really take a financial genius to do that? How much "skill" as a manager does a person need to soak taxpayers to cover a budget deficit? Wasn't the argument then, as it is now, that Mr. Bloomberg is specifically skilled to handle the economic crisis? Honestly, I guess that means Freddy Ferrer must be a financial "expert" too.
Surprisingly, the "pain" has continued. Not satisfied with "financially managing" the crisis, Mr. Bloomberg has continued to display his economic "skills" by increasing the budget year after year after year well above the rate of inflation. The expense side of the budget has gone from 2002's level of $41 billion to $63 billion today - a whopping 54% increase. To cover this demonstration of "economic genius," the revenue side of the City's budget has gone from 2002's level of $27 billion to 2008's of $46 billion - an amazing 70% increase.
Looking at the facts, it is clear that there was some confusion on what the Mayor meant when he said the word "pain." The "pain" he was talking about back in 2002 was really to the taxpayer, and consequently, to the quality of life and economic future of the city - exactly the opposite of what we thought, and were promised, was going to happen.
Bloomberg's tax and spending largesse has contributed to making residents leave in droves, contributed to the loss of 250,000 jobs, kept us mired in 10 quarters (40 months!) of recession after 9-11 - even though the rest of the country only spent 8 months in recession, and has led to the most expensive average commerical rents in the nation at $83 per square foot - more than double the national average and consequently rapidly increasing commercial real estate vacancies. Essentially, NYC has become, far and away, the most over-taxed locality in the United States.
So is this why so many people are rallying to get the Mayor an unprecedented third term - higher taxes? We "need" this particular Mayor to radically increase taxes and spending? Why not just pick Charles Barron or Christine Quinn? Why not just randomly select the next person you see walking down the street?
Michael Bloomberg has not made noteworthy economic and/or fiscal management decisions with NYC government. He's governed from the political Left over the last 7 years and is really no better or worse than any Democrat who would successfully come out of the Primary process. For that reason, New York City needs to go in a different direction next November.
The next Mayor should cut spending and taxes to cover the projected deficit - high taxes retard population and economic growth. The next Mayor should be wise enough to be able to either predict the fiscal future and/or find a way to keep enough budget reserves to cover unanticipated circumstances - and if that's not legal right now, fight to make it so. The next Mayor should be a real financial expert who understands that by improving the business climate of NYC, the future of the City is protected because the revenue that supports it's critical spending is protected. The next Mayor should understand that a city without a Middle Class is not a City that will last through time and that excessive property, sales and personal income taxes force Middle Class families to other, less expensive, parts of the country. The next Mayor should do more with less.
Using any reasonable standard, Michael Bloomberg should not be the next Mayor of New York City. UE readers and the GOP must ensure that a strong candidate is on the GOP and/or Conservative line come November 2009 to send Mayor Mike packing. Let him bring some "pain" to the private sector for a while...
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written by Will McCabe , October 29, 2008
Send'em packing indeed! With a city as great and large as this, it is beyond arrogant to suggest that you’re the only person who can save the city and megalomaniacal if you believe it as well! Great point Jay.
written by Daniel Peterson , October 29, 2008
We're gonna need to make some tough choices in the coming year. We'll need to see some cuts and I wouldn't mind shrinking the size of the city's bureacracy.
1. Privatize Sanitation
2. Privatize 311
3. Privatize all MTA Buses throughout the 5 boroughs and leave the MTA to just rail service.
I think the first step for NYers is to vote out incumbents on the State Level this November. It's a week away and these are the folks that spent well over the rate of inflation to put the state in the current situation its in. As for Bloomberg, he's had the luck of the Bush Tax Cuts and has been able to squirrel some money into a rainy-day fund, but he's also battling council members who squirrel money into faux-agencies.
Next year's goal should be to get ten to fifteen Reform Republicans into City Hall. Fifteen may not "balance" the council, but it can improve the "checks" and we could use some more checks on these folks. I may be dreaming on getting fifteen, but if we target certain districts for victory, run strong candidates in other districts that can pull liberal resources from these competitive districts, perhaps we can bring some real change.
written by Jay Golub , October 29, 2008
what you just wrote, Danny, is part of the point.
Bloomberg hasn't done ANYTHING creative related to either the economy or budgeting for NYC. No new way of doing things. No signs of expertise.
You have offered a few ways of "doing more with less." What has Bloomberg offered to that regard?
NOTHING.
It's so sad that he's getting a pass in this area.
Just because you are rich doesn't mean you know how to manage resources...
written by greg vitarbo , October 29, 2008
Bloomberg has been buying everyone in NYC off. Why do you guys do a piece on that?
For what it's worth, the above piece is more detailed and more accurate than anything i have ever seen in the NY media before.
It's time to get rid of this guy already...
written by Jay Golub , October 29, 2008
http://www.politickerny.com/az...washington
I'm starting to like this Patterson guy and this is another issue that Michael Bloomberg has talked about, along with others...
, but has not delivered on. The Balance of Payments deficit is the single most important issue facing New York.
I think the gap numbers that Patterson used are a little high ($61.2 billion in 2006 and $86.9 billion in 2007), but the point is very accurate.
NY State, and NYC, can not afford to overpay the feds by $50 or $60 billion dollars a year and be able to balance the budget...
written by Daniel Peterson , October 30, 2008
I won't dispute that NYC and NYS pay more than its share of taxes and Washington "spreads our wealth around" to other states, but the root of all evils is the Albany legislature. These guys see green and their eyes light up. When informed about potential storm clouds down the road, they don't care. It's here and now. Spend, Spend, Spend. Create new agencies and increase allocated funds with the money that comes in. Not once have they ever thought about not increasing the budget below inflation.
I agree that Patterson makes a good point of giving more than we get back, but seriously. If Albany thought it that important, it would've been more frugal with its spending over the years.
written by Jay Golub , October 30, 2008
the spending done in D.C. - on OUR dime, BTW - is not much different than the spending in Albany or NYC or, more importantly, than by the American consumer.
Overspending was the trend. Debt/credit was the trend.
Albany is no more or less guilty of that than everyone else.
...i will have more on this in an upcoming post...
written by Jay Golub , November 04, 2008
http://www.nypost.com/seven/11...136854.htm
"I just think three terms makes more sense than two."
What's to stop him from saying, "i just think four terms makes more sense than three" a few years from now?
written by Jay Golub , November 04, 2008
http://www.nypost.com/seven/11...136855.htm
"If we are going to find ways to do more with less, we need a workforce that can focus on the job rather than wonder how they're going to pay the rent," he said.
"It's fair to say there's no large-scale [layoffs]. If there were some small ones in some small agencies, I would do everything I can to try to find other jobs in other agencies in the city for those people," he said.
Is the Mayor kidding? This is how he plans to hold on for a third term, by making sure city workers can "pay their rent?" And then he promises no "large-scale" layoffs as well?
How is Bloomberg going to balance a budget when he takes off the table both cuts in wages and employment at the city level?
Giving 4% raises to a bunch of inefficient and unessential workers is NOT the way out of our financial crisis.
Oh where is the fiscal conservative Freddy Ferrer when we need him??....;(
written by Jay Golub , November 06, 2008
Bloomberg is now proposing excessive tax hikes AND cuts in government employment/services/spending.
this is the direct opposite of what this crisis needs...
written by Jay Golub , November 11, 2008
http://www.nypost.com/seven/11...138072.htm
the lawsuit has no chance of success. the council may have acted "unfairly," but they didn't act illegally.
written by Jay Golub , November 11, 2008
http://www.nypost.com/seven/11...138081.htm
Crisis??? What crisis???
Bloomberg's priorities are so off...
