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Citizens Union

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A Recovery Package From Bloomberg

Gotham Gazette

The Place for New York Policy and politics

Citizens Union
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Trumpeting, both literally and metaphorically, New Yorkers' ability to get through tough times, Mayor Michael Bloomberg revealed a nine-part "recovery package" during his annual State of the City address Thursday, confirming to many attendees that the 2009 campaign season has started.

Meticulously orchestrated and equipped with its own theme ("New Yorkers. Together."), the mayor's address featured a small marching band brandishing the Brooklyn Dodgers label, a chorus from a Brooklyn elementary school and a documentary short courtesy of Ric Burns, which retold stories of triumph against tragedy in New York City.

The address, which the mayor usually uses to lay out his policy agenda for the coming year, focused primarily on getting the city through the current recession, including jump-starting a proposal to bring in 400,000 jobs. The mayor also focused on quality of life crimes, in an attempt to keep the city from reverting back to the 1970s, when core city services were cut amid an economic downturn.

"Our job is to help all those who are struggling -- help them improve their chances for a job, for keeping their homes, for making ends meet and to do it all without new funding -- because the city just doesn't have the money," the mayor said to a crowd of about 2,300.

Creating Jobs

In what could be his most ambitious proposal, Bloomberg suggested rescinding the unincorporated business tax -- a change that would need state approval -- and creating jobs through capital programs, including the construction of the recently approved Willets Point development in Queens. As of 2005, according to the city's Independent Budget Office, 22,900 sole-proprietor businesses were subject to the unincorporated business tax. The mayor's plan would rescind the tax for about 17,000 businesses at an estimated savings of $3,400 each.

Bloomberg also hopes to create thousands of "green" jobs by requiring private buildings to become more energy efficient. He intends on expanding job creation programs to accommodate 20,000 individuals instead of the usual 17,000 and hopes to make doing business with the city more accessible by putting certain permits online.

Many of the capital projects that Bloomberg attributed to future job growth in the city are nothing new, such as the expansion of the number 7 subway line and development of Hunter's Point South in Queens.

"If the speech only had those, it would have been fair to fault it for not having new, new jobs," said Council Speaker Christine Quinn. "But it had more than that."

Many of the mayor's proposals to spur job growth would need either approval from Albany or funding from the federal government, including his call for Washington to pay for new air traffic control systems at the city's airports.

Quality of Life

In addition to job creation, the mayor hopes to keep city streets safe and clean despite the lack of city resources. He wants to identify a dozen habitual quality of life offenders in each borough for "special attention" from law enforcement. He will call them "the dirty dozen."

Bloomberg will also ask the state legislature to approve a proposal making a seventh quality of life conviction in a year a felony. To combat the worst city crime, the mayor proposed to deploy cameras in the three neighborhoods with the highest murder rates.

Keeping in line with his development and education agenda, the mayor said the city would continue to landmark and rezone land in the outer boroughs and would urge the State Legislature to re-approve mayoral control of schools -- set to expire this year. Bloomberg also plans on launching a pilot 311 program, aimed specifically at getting information from the Department of Education to parents.

Cutting Costs

To address the city's skyrocketing pension costs, Bloomberg reiterated his call for pension reform, specifically creating a new tier that would save $5.4 billion over two decades. That proposal sparked applause from some fiscal advocates.

"It’s a very smart approach in our situation to try to do more with less, to try to get the most out of what we have," said Carol Kellermann, the president of the Citizens Budget Commission. "I was very, very happy to see pension reform."

DĂ©jĂ  Vu?

Some saw the mayor's address, held at Brooklyn College, as a kickoff to the mayoral campaign, when Bloomberg will be seeking a third term after winning a change in the city's term-limit law last year.

Welcoming the audience to his borough, Brooklyn Borough President Marty Markowitz said, "Now that term limits have been extended, so many in the city are looking forward to the mayor's massive job creation program -- by the way, it's also known as the Bloomberg re-election campaign."

The comment was met with laughter and applause.

While some attendees and city officials praised the mayor's address, others said the proposals were stale. Comptroller William Thompson, who is a declared candidate for mayor and is stepping up his criticism of the administration, said he has been working on many of the mayor's ideas for some time.

"There were a few things that you wanted to stand up and go, 'Uh wasn't that my idea?'" said Thompson. "I thought a lot of the vision the mayor put forward are things that I've recommended and suggested."

Thompson referred to his support of small businesses and attempting to increase the number of self-employed.

Others said the mayor's address provided evidence that he is equipped, ready and the right person to lead the city for the next four years.

"He reassured New Yorkers that we are going to have a positive approach to dealing with the economy, and we're not going to sit around and wait for the federal government to take charge," said New York University Professor Mitchell Moss.

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Gotham Gazette

The Place for New York Policy and politics

Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

The Symbol and Reality of Finance

By Rosemary Scanlon

New York City seems to be a place where we make advertising slogans, news broadcast, operas and plays, great restaurant meals, bagels and packets of sugar. But what we really make in New York City is money. We make it, we trade it, we store it for a fee, we loan it, we invest it, and we create new instruments for it for which we can charge a fee.

Those earnings from money, be they profits, dividends, wages or bonuses, are what fills the treasuries of our state and local government and the national government. It is the money that hires the consultants and lawyers, architects and builders, and that buys the tickets for airlines, sports events and Broadway plays. When that money moves out into the city and into the metropolitan area as wages and bonuses, this is the money that we economists would say drives the income multiplier or the job multiplier. Well over one third of all the net growth in incomes, including earned incomes and bonuses, in New York City during the 1990s boom came from one industry. That was Wall Street.

The 1969 recession was financial led, the 1989 recession was financial led and the current recession is also financial led.

The early planners of the World Trade Center recognized the key role of finance in the city. They were able to look ahead to the future and say that the dynamics of trade in the future would not be in the goods handling, the physical handling, but in the transactions, finance, and the links to commerce. So, the World Trade Center was designed to be a global center of finance and to handle the transactions of trade. It had largely fulfilled that mission.

As a place of work, the World Trade Center firmly anchored the financial functions of the city and the nation. That did not happen all at once. It took a while, for example, for the development of the World Trade Center to lead to Battery Park City. Even though we saw part of the financial world migrate to midtown Manhattan and the suburbs, the World Trade Center remained the reality and the symbol of finance. With its destruction, not only the economy of our city, but the nation and the world has been plunged into a recession.

The bombing of the World Trade Center in 1993 made it clear that all businesses had to have backups, had to diversify. And firms did come back and new firms moved in. But that was not clear in the spring in 1993 as we wrestled with what the economic impact of what has happened and what would be.

Clearly New York City today has two problems in economic terms. One is what the shock waves of the terrorists' destruction of the World Trade Center will do to our economy over the next few months. Secondly, we have the long-term problem of what will happen to businesses and individuals and where they will locate.

We can assume there will be money from insurance and promised money from the federal government. That money will help us rebuild, but what has occurred today is so horrific that it 1s very difficult to think through, let alone consider how events will eventually unfold.

Whatever does happen will take place against a backdrop of 30 years of major structural change. We have seen the wave of suburban development that began in the late 1950s and the decline of manufacturing, first in the city and then in the suburbs. We have also seen the decline of the port and the ascendancy of the financing business services function.

But during the 1990s we saw the rise again of the central city as pivotal to the growth and redevelopment of the greater metropolitan area economy. We have seen proof that local policies do matter and that infrastructure is important, education is important, crime and safety are important, and tax policy as it is carried out at the city and state levels is important.

Above all, the openness of our city economy is really important. New York was what it was in the 1980s and 1990s because of that openness. Similarly, London was important but not Tokyo and not some other cities in the world that did not do as well in the 1990s.

We have also seen through the 1990s that the availability of technology is not necessarily a guarantee of its obvious results. The technology of the information and communication and computer revolution in the 1990s favored dispersal, and people could move off to Vermont or where I come from in Nova Scotia and do their work from there. But the opposite happened. We all gathered together because we wanted to work together in complexes such as the World Trade Center, we wanted to live together, wanted to move on the streets together, eat in restaurants etc. and partake in the cultural life of the city.

The attack on the World Trade Center hit at our major industry, finance. Any decisions we make about the future must clearly be to protect that industry, and, we hope, protect our open economy. Any decisions we make in the midst of our current pain will be tied again to the decisions of individuals about where they want to work.

Rosemary Scanlon of the Real Estate Institute at New York University was former deputy New York State comptroller, and chief economist for the Port Authority of New York and New Jersey.

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Read Robert Fitch's article - A Mistake In The First Place

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Gotham Gazette the Place for Politics and Policy

Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

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