Gotham Gazette Gotham Gazette is an online publication covering New York policy and politics as well as news on public safety, transportation, education, finance and more. http://www.gothamgazette.com/component/tags/tag/citizens-budget-commission 2019-01-24T11:07:15+00:00 Webmaster webmaster@gothamgazette.com What's The [Data] Point? $175.2 Billion, Cuomo's Executive Budget 2019-01-17T05:00:00+00:00 2019-01-17T05:00:00+00:00 http://www.gothamgazette.com/state/8211-what-s-the-data-point-175-2-billion-cuomo-s-executive-budget Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 62</strong><strong> -- $175.2 Billion, Cuomo's Executive Budget, with Andrew Rein of CBC [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/img_7035.jpg" alt="img 7035" width="125" height="131" style="margin: 10px; float: left;" /></p> <p>$175.2 billion is the size of Governor Andrew Cuomo's Executive Budget plan for Fiscal Year 2020, unveiled earlier this week and now the basis for hearings and negotiations with the Legislature.</p> <p>The New York budget is one of the largest government budgets in the world, and it’s poised to grow 4 percent over this year’s budget for fiscal year 2019.&nbsp;The Governor has included proposals for everything from congestion pricing to recreation marijuana and sports gambling legalization. Of particular note are significant spending increases on priorities such as education that are backed by a five-year extension of the income tax surcharge on millionaires. Andrew Rein, new president of Citizens Budget Commission, joined the hosts to give an initial assessment of the Governor's budget plan.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/560645520%3Fsecret_token%3Ds-TndWB&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="185" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 62</strong><strong> -- $175.2 Billion, Cuomo's Executive Budget, with Andrew Rein of CBC [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/img_7035.jpg" alt="img 7035" width="125" height="131" style="margin: 10px; float: left;" /></p> <p>$175.2 billion is the size of Governor Andrew Cuomo's Executive Budget plan for Fiscal Year 2020, unveiled earlier this week and now the basis for hearings and negotiations with the Legislature.</p> <p>The New York budget is one of the largest government budgets in the world, and it’s poised to grow 4 percent over this year’s budget for fiscal year 2019.&nbsp;The Governor has included proposals for everything from congestion pricing to recreation marijuana and sports gambling legalization. Of particular note are significant spending increases on priorities such as education that are backed by a five-year extension of the income tax surcharge on millionaires. Andrew Rein, new president of Citizens Budget Commission, joined the hosts to give an initial assessment of the Governor's budget plan.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/560645520%3Fsecret_token%3Ds-TndWB&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="185" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
Agenda 2019: City & State Budgets on Mostly Solid Ground, with Major Questions Looming 2018-12-16T05:00:00+00:00 2018-12-16T05:00:00+00:00 http://www.gothamgazette.com/state/8147-agenda-2019-city-state-budgets-on-mostly-solid-ground-with-major-questions-looming Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2018/38830501065_76fa4325c9_z.jpg" alt="Cuomo budget presentation" width="600" height="400" /></p> <p>Gov. Cuomo (photo: The Governor's Office)</p> <hr /> <p style="text-align: center;"><em>This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project<br /><a href="http://www.gothamgazette.com/state/8029-agenda-2019" data-saferedirecturl="https://www.google.com/url?q=http://www.gothamgazette.com/state/8029-agenda-2019&amp;source=gmail&amp;ust=1542727012992000&amp;usg=AFQjCNFY2bJ6BA6AesUwakCrfkUOqoU35A">Find the rest of the series here</a></em></p> <p>New York’s economy has seen several rosy years in the decade since the Great Recession, with a run of steady growth, increasing job numbers, rising wages, and reliable tax revenue that has defied historical trends -- and led to growing city and state government budgets. But 2019 may be the peak of that economic swing as economic experts predict a long-expected slowdown to set in before 2020. New York City, the experts say, seems better equipped to weather any adverse effects of slowing growth and the state may struggle, presenting some hard choices for Democrats who will fully control state government come January and have a long list of priorities, some of which have financial costs attached.</p> <p>Also complicating the fiscal pictures as the state and city levels are projected budget gaps that must be closed, looming negotiations over how to fund the next MTA capital budget plan and its tens of billions of dollars to fix the subways, and the still unclear effects of recent federal tax reforms, among other outstanding questions. The finances of New York City continue to show a rosier picture than those of the state, with the city economy essential to the state’s ability to spend more each year, though the state has grown its budget in much more limited fashion than the city under Mayor Bill de Blasio.</p> <p>In January, Governor Andrew Cuomo will present his State of the State address and executive budget for the fiscal year that begins April 1. Afterward, de Blasio will respond to the governor’s budget plan -- which will set the stage for negotiations with the state Legislature, de Blasio, and others -- and release his own preliminary budget for the next city fiscal year, which will begin July 1. Once the state budget is finalized, the city will be able to take its details -- funding levels, new mandates, and more -- into account as it creates its own budget. The specifics of the annual struggle over what the state is asking or requiring of the city are to be seen, though Cuomo has already indicated he plans to seek more money for the MTA from de Blasio.</p> <p>Budgets are statements of values as much as they are financial planning documents and Cuomo and de Blasio, both Democrats, face pressure each year to balance their policy priorities with fiscal restraint, as well as the demands of others, especially members of the respective legislative bodies each must negotiate with. The governor prides himself on having passed eight on-time or nearly on-time budgets with a 2 percent cap on increased spending, though he is known to manipulate the numbers to say he has stuck to that limit even though some years he has not. De Blasio boasts of record amounts of savings, though watchdogs regularly say that he is not socking away enough given the extended economic boom while he is spending too much, especially in recurring costs like through a significant expansion of the city workforce.</p> <p>The agreed upon state budget was more than $168 billion for the current 2019 fiscal year, with savings that are far too minimal according to every expert. And the mayor’s administration, though praised by fiscal monitors for its responsible financial planning, has overseen ballooning expenditures, passing a nearly $90 billion budget for fiscal 2019 -- it was $72.7 in the final year of the Bloomberg administration.</p> <p>But New York City revenue is largely based on property taxes, which would remain relatively stable even in the event of an economic slowdown. The state on the other hand is far more vulnerable since personal income tax and sales tax contribute a bulk to state revenue.</p> <p>Barring any unforeseen circumstances, the current economic expansion, the second-longest in the country’s history, will continue through most of 2019, bolstered by the federal tax cuts passed in 2017 (even if many New Yorkers’ tax burdens increase due to the new cap on state and local deductibles). It should allow both the state and the city to keep spending, though experts warn that both should prepare for what will happen down the line. Both the Cuomo and de Blasio administrations, along with the state Legislature and City Council, respectively, should be putting more money towards rainy day funds, fiscal experts say; particularly the state, especially as necessary infrastructure investments loom large and add to already rising debt obligations.</p> <p><strong>New York State</strong><br />The state budget remains far more precariously placed in the case of a downturn, even though one isn’t expected to hit soon. The governor has reiterated in recent months that he will continue to abide by a self-imposed 2 percent limit on increased annual expenditures, which presents little wiggle room to add major spending initiatives, though it remains to be seen if the governor will employ one of his many budget maneuvers to obscure actual spending increases. For instance, the&nbsp;<a href="https://www.budget.ny.gov/pubs/press/2018/pr-enactfy19.html">State Fiscal Year 2019 budget</a>, which began April 1, included a provision that funnels Payroll Mobility Tax revenue directly to the MTA instead of going through the state, effectively shifting $1.5 billion out of the budget.</p> <p>“Part of the problem is they’ve technically abided by it but they’ve only done that by shifting things around and reclassifying things, not necessarily through stringent cost controls,” said David Friedfel, director of state studies at Citizens Budget Commission, a nonprofit watchdog. “The more they play those tricks, the harder they will be to find in the future if that’s how they choose to close the gap.”</p> <p>The New York State Division of Budget’s&nbsp;<a href="https://www.budget.ny.gov/pubs/archive/fy19/enac/fy19myfp.pdf">mid-year financial update</a>, released in November, predicted that the state will meet its revenue projections by the end of the fiscal year. Even at the state level, budget gaps remain manageable, at about $3.1 billion for fiscal year 2020, a number that is quickly cut if the 2 percent growth is factored in.</p> <p>State Comptroller Tom DiNapoli released his own&nbsp;<a href="https://www.osc.state.ny.us/reports/budget/2018/quick-start-report.pdf">financial update</a>&nbsp;in November, estimating that overall tax revenues would decrease by 1.8 percent by the end of the state’s 2019 fiscal year (end of March). Though personal income tax revenues are expected to fall by 2.5 percent, business and consumption taxes are set to increase by a total of 6.5 percent, the report estimated. Tax revenues are expected to increase by 5.9 in the 2020 fiscal year and then at a lower rate, 2.4 percent in the 2021 fiscal year.</p> <p>Similar to city representatives, officials in DiNapoli’s office said in a background briefing that they expect a soft landing for the economy, despite the volatility in national and international markets. They have yet to determine the full impacts of the federal tax code overhaul, which capped State and Local Tax (SALT) deductions at $10,000 annually, raising concerns that high earners facing larger tax bills would in some cases fold to out-migration pressures, leaving the state and taking their tax dollars with them. Given New York’s position as a high-tax state, even many upper middle class homeowners in expensive New York City suburbs, and in the city itself, will be facing increased tax burdens, though it is not immediately clear that these factors will lead to a significant increase in the number of higher earners leaving the state. New York has consistently seen out-migration each year and has lost a net of 1 million residents since 2010,&nbsp;<a href="https://www.empirecenter.org/publications/ny-out-migration-tops-1m-since-2010/">according</a>&nbsp;to The Empire Center, a think tank. A report issued by the center&nbsp;<a href="https://www.empirecenter.org/publications/checklist-2018/">in March</a>&nbsp;suggested that the state should undertake several reforms to encourage the economic competitiveness which could help reverse that trend.</p> <p>The state took measures to decouple state tax provisions from the federal tax code, including decoupling from the SALT limit to prevent higher state taxes, and changes to the child tax credit and the single filer deduction. The state also created two new programs -- the Employer Compensation Expense Program and the State Charitable Gifts Trust Fund -- in an effort to limit state taxpayers’ exposure to federal tax changes, but neither program appears to have caught on in any significant way. Officials in the state comptroller’s office said the impacts of the SALT deduction in particular wouldn’t be evident until during next fiscal year, particularly if it encourages people to move out of state.</p> <p>Other risks in federal funding to the state seen in recent years -- Republican proposals to repeal the Affordable Care Act and make drastic cuts to Medicaid -- have also mitigated, the officials said, since those proposals have failed to come to fruition. But federal funding does remain uncertain as Congress is in the middle of negotiating the current federal budget with President Donald Trump, who has threatened a government shutdown if Congress does not approve funding for a wall along the southern border that he had promised Mexico would pay for. The ballooning federal deficit incurred from the Trump-led tax cuts have also increased pressure on federal spending, which could trickle down to the aid that New York receives for transportation, health care, and education, among other things.</p> <p>“The state is in decent financial position but not when you consider the fact that we are nine years or so into an economic expansion,” CBC’s Friedfel said. “The state has been gifted with $12 billion in financial settlements and some additional revenues yet the state’s reserves are not where they should be or could be. They haven’t been added to in about four years. And liabilities are still out there.”</p> <p>As Friedfel noted, the state’s rainy day funds stand at only about $2 billion, a pittance when looked at in the context of a downturn. In the case of a recession, Friedfel estimated, the state could face up to $50 billion in combined losses over a four-year period. “California is doing a very good job on their reserves. They’re gonna have close to 10 percent of state operating spending in their reserves, which is really what New York should be aiming for,” he said. “Instead of $2 billion, we should be closer to $10 billion.”</p> <p>As with the city, the state’s debt also continues to rise, particularly with the governor having launched an ambitious infrastructure program that includes modernizing existing facilities and building new ones across the state, including bridges, airports and bus systems. The state’s debt service payments for fiscal year 2019 stood at $5.5 billion and are&nbsp;<a href="https://www.budget.ny.gov/pubs/archive/fy19/enac/fy19myfp.pdf">projected</a>&nbsp;to rise to $6.6 billion in 2020. New York currently&nbsp;<a href="https://www.osc.state.ny.us/finance/finreports/fcr/2018/debt.htm">ranks</a>&nbsp;second-highest in the country, behind California, in outstanding debt.</p> <p>Year after year, DiNapoli has waved a red flag over the state’s debt obligations and officials in his office are keeping a close eye on whether those will increase in the upcoming year. There will be particularly pressing needs -- the MTA, NYCHA -- where the state will have to work with the city to fund large capital improvements. The current 2015-2019 MTA capital plan remains underfunded and the Fast Forward Plan, proposed by New York City Transit President Andy Byford to modernize the city’s subway and bus systems, may cost nearly $40 billion, with no plan proposed to pay for it in its entirety. A congestion pricing program for New York City has been embraced by the governor and many in the state Legislature as a funding stream, but even if implemented quickly and without carve-outs it would fall far short of meeting the goal.</p> <p>“That’s one of the biggest questions,” said Gelinas from the Manhattan Institute, “especially if the economy continues to do well. How much does Governor Cuomo go after the city for MTA funding and in multiple billions of dollars...and does that cut into the city’s other priorities?”</p> <p>IBO’s Lowenstein also echoed that concern. “The state has a great deal of leverage over the city and its own fiscal concerns and it would be unreasonable to expect these issues get resolved without city participation.”</p> <p>Last time Cuomo and de Blasio negotiated the MTA capital plan, the governor successfully convinced the mayor to significantly increase city funds for the authority. Cuomo has repeatedly stated publicly in recent months that he will be pushing the city to pay “its fair share” for the MTA. De Blasio has called for an added tax on high-earners to provide dedicated funding for the MTA, a proposal that Cuomo has publicly mocked as fantasy on several occasions.</p> <p>The state Legislature next year will also include several newly-elected Democrats who expressed support for increased education funding, per the Campaign for Fiscal Equity decision, which could add billions to the state budget. The state Board of Regents recently proposed a $2.1 billion increase in education funding for next year, which would be a significant jump from the current fiscal year’s increase.</p> <p>New York already spends nearly twice the national average on per-pupil funding, said CBC’s Friedfel, but doesn’t necessarily allocate funding to the districts that need it most. CBC has&nbsp;<a href="https://cbcny.org/research/better-foundation-aid-formula">argued</a>&nbsp;for changing the key formula, known as Foundation Aid, noting that many wealthy districts receive it despite already spending more than the national average and more than the already-high state average by leveraging local tax dollars.</p> <p>Another open question is what the state will do with about $900 million in unspent or unallocated one-time funds from Extraordinary Monetary Settlements, recovered from the financial industry in the wake of the 2008-09 market crash. Since state fiscal year 2015, the state has received nearly $11.2 billion in those settlements.</p> <p>Though the governor has repeatedly said he will divert those funds to capital investments, and he mostly has, he has also used them for budget balancing purposes, DiNapoli’s office noted.</p> <p>“The governor should be putting much more money of any one-time revenue sources aside for the MTA, things like court settlements or just better-than-expected revenues,” Gelinas said, noting the dire need to fund the transit agency. “We haven’t put enough of that money aside for the MTA.” Cuomo has, on the other hand, dedicated financial settlement money to his signature infrastructure projects, like the new Mario M. Cuomo Bridge.</p> <p>Unlikely to impact the next state budget, but certainly on the negotiating table in the new legislative year, is the push to revolutionize how New York provides health insurance and health care. Several legislators, long-time and newly elected, are pushing for the New York Health Act, which would establish a single-payer health care system in the state and could cost nearly $140 billion in additional state expenditure by 2022, according to&nbsp;<a href="https://www.rand.org/pubs/research_reports/RR2424.html">a RAND Corporation study</a>. Though the act could reduce total health care spending by 3 percent by 2031, the study found. Cuomo has said he supports a single-payer system, but has insisted that it should be implemented by the federal government rather than the state, and said that he does not see it make fiscal sense for New York.</p> <p>New York already has one of the largest Medicaid programs in the country, comprising a huge chunk of the state budget (education and Medicaid are the two biggest spending programs). But enrollment has been relatively flat over the last three years. If that trend continues, Friedfel said, the state could find more savings in the budget.</p> <p>Friedfel also noted at least one development on the horizon that could have a significant impact on state tax revenue. “The million pound gorilla in the room is what’s gonna happen with the state’s millionaire’s tax,” Friedfel said. The tax is due to expire on December 31, 2019, and though prominent elected officials have called for extending, and even expanding, the program, CBC’s position is that it should be allowed to sunset to help with the state’s economic competitiveness and to keep high-earners from leaving because of the SALT deduction cap.</p> <p>While Cuomo has overseen its repeated extension and he has dismissed calls to expand it,&nbsp;<a href="http://www.gothamgazette.com/state/8047-tax-issues-at-center-of-new-york-elections-albany-year-to-come">during the recent election cycle</a>&nbsp;he was mum about what he wants to do with the current millionaire’s tax.</p> <p><strong>New York City</strong><br />The city released its latest budget modification in November, revising spending up by $1.4 billion, for a total of $90.56 billion for the 2019 fiscal year, which ends June 30. That marks a high point for city spending, and an $18 billion increase from before de Blasio came to power in 2014. The city’s Office of Management and Budget projects a manageable $3.17 billion budget gap -- the difference between expected revenues and projected expenditures -- for the 2020 fiscal year starting July 1. OMB expects that gap to rise to $3.36 billion for fiscal year 2022, the end of the current four-year financial plan period, by when expenditures are projected to reach a whopping $99.6 billion.</p> <p>As City Comptroller Scott Stringer noted in his <a href="https://comptroller.nyc.gov/reports/annual-state-of-the-citys-economy-and-finances/?utm_source=Media-All&amp;utm_campaign=d8ec0a9cbb-EMAIL_CAMPAIGN_2017_12_08_COPY_01&amp;utm_medium=email&amp;utm_term=0_7cd514b03e-d8ec0a9cbb-109199453">latest financial report</a> released on Friday, OMB tends to issue more conservative estimates of revenues in upcoming years, allowing the administration more leeway to adjust spending. Stringer’s report estimates the budget gap to be lower, about $2.6 billion in FY2019 and $2.8 billion in FY2022. &nbsp;</p> <p>“We’ve come out of a run of a number of years of good economic conditions and good fiscal conditions here in the city...but we’re not seeing anything in the numbers that suggests it’s going to end anytime soon,” said Ronnie Lowenstein, director of the Independent Budget Office, a nonpartisan city-funded agency.</p> <p>In a background briefing, an official at Comptroller Stringer’s office acknowledged that there’s significant uncertainty, with even the Federal Reserve appearing divided about where the economy is heading. There are mixed signals in the market -- unemployment is markedly low which should lead to higher inflation, but hasn’t.</p> <p>But the comptroller’s office is cautiously optimistic and no economist currently projects a recession -- though one is never out of the question -- but rather a return to a slower rate of growth by the time 2020 rolls around.</p> <p>“[We’re] expecting a great deal more softness in economic growth,” said IBO’s Lowenstein. “Not a recession but a much softer U.S. economy. And as far as the local economy’s concerned, we’ve already begun to see the weakening.” She pointed to the drop in job growth over the last few months and also noted that though the job market has diversified with more jobs created outside the financial industry than before the last recession, most of the new jobs have been in lower-paying industries.</p> <p>But she said that slower growth won’t create out-of-control deficits. “We’re looking at gaps that are readily manageable, of the size that we’ve managed in the past,” she said.</p> <p>The official from the comptroller’s office agreed that the city has the capacity to manage outyear budget gaps, particularly with a strong budget surplus each year that has allowed the city to maintain a healthy, if not optimal, level of reserves. The de Blasio administration put away added rainy day funds in the current fiscal year, responding to demands from the City Council. The result included a total of $1.25 billion in the general reserve, $4.35 billion in the Retiree Health Benefits Trust Fund, and $250 million in the capital stabilization reserve.</p> <p>The city’s budget cushion has been increasing over the years and stood at about 11.2 percent at the start of the current fiscal year, though the comptroller has urged the administration to maintain levels between 12 and 18 percent, the lower range of which would have required more than $6.3 billion to hit the upper end.</p> <p><strong><a href="http://www.gothamgazette.com/state/8029-agenda-2019"><img src="http://www.gothamgazette.com/images/graphics/2018/agenda19v2-a.jpg" alt="agenda19v2 a" width="250" height="127" style="margin-right: 10px; float: left;" /></a></strong>There are of course various risks that the city must manage. One big vulnerability, according to the official from the comptroller’s office, is the size of the city’s workforce, which has added more than 30,000 workers under de Blasio.</p> <p>“If you look at the November budget update...the biggest issue is the increased expected spending on labor,” said Nicole Gelinas, senior fellow at the Manhattan Institute, a think tank. She noted that <a href="https://www1.nyc.gov/assets/omb/downloads/pdf/fp11-18.pdf">the report</a> increased the labor reserve for fiscal year 2020 by $704 million, for 2021 by nearly $1 billion and for 2022 by about $1.4 billion.</p> <p>“It just shows that these labor agreements that the mayor is making with the unions are costing a little bit more money than expected,” she said. “So the basic story is if the economy keeps doing well, we can probably squeak by with balancing next year’s budget...but if the economy does fall into a recession, with the higher labor costs making these deficits a little bit bigger over the next few years, they would pose a bigger problem for the city.”</p> <p>Gelinas said the city must take aggressive cost-cutting measures in labor agreements, particularly health care spending, to help avert layoffs and service cuts in the case of a recession. “Longterm, health care savings have to be much more aggressive,” she said. “The healthcare fringe benefit budget for the upcoming fiscal year will be almost $11.5 billion and it’s continuing to rise. It’s going to $12.5 billion by the end of the financial plan.”</p> <p>“No mayor has ever gotten through two terms without a recession,” she added on the eve of de Blasio’s sixth year in office.</p> <p>The city’s debt obligations have also been rising, owing to a massive capital program, which pays for building and maintaining the city’s infrastructure such as roads, parks, schools, and libraries.</p> <p>“Debt service is one of the two big sources of growth in city spending,” said IBO’s Lowenstein, referring to the annual debt payments that are included in the city’s expense budget. “It’s debt service and healthcare, and they’re both big and they’re both growing very fast.” Debt service -- which is accounted for in the city’s annual operating budget -- is budgeted at a total of $6.8 billion for fiscal year 2019, according to the November update, and is expected to rise to $8.3 billion by fiscal year 2022.</p> <p>Unlike most other municipalities, New York City’s capital program is funded entirely through borrowing, incurring massive debt that must necessarily be paid off every year, which could pose problems in the long run. “It’s less that we can’t continue to pay the debt service on the commitments that we’ve made but rather that they’re crowding out other things that the city might want to do,” Lowenstein said. “And our ability to expand those capital commitments is not unlimited. Especially in an era when interest rates are rising.”</p> <p>Rising debt service also gives the mayor and City Council “less leeway to budget for other things ranging from teachers to cops to road repair,” she said.</p> <p>Stringer has repeatedly raised the issue of rising debt, though it’s not yet out of control. The rule of thumb for his office is that debt service should not exceed 15 percent of tax revenues, a level it is well below currently. And the City Council has also attempted to make changes to the mismanaged capital funding process, creating a new subcommittee this year dedicated to examining the capital budget, finding ways to make it more efficient and reducing cost overruns. Upcoming City Council budget hearings may indicate whether that subcommittee and its focus are having any real impact.</p> <p>But there are big items that may add significantly to the city’s capital investments and therefore create an additional debt burden. Those include funding for the beleaguered New York City Housing Authority (NYCHA) and the state-run Metropolitan Transportation Authority (MTA). In both cases, the city may have no choice but to commit billions more dollars, particularly pending the outcome of negotiations with federal officials over NYCHA and with state officials over the MTA, for which the city typically kicks in significant capital funds.</p> <p>“The city may not have choices so the speed with which this occurs may be out of our hands,” Lowenstein said.</p> <p style="text-align: center;"><em>This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project<br /><a href="http://www.gothamgazette.com/state/8029-agenda-2019" data-saferedirecturl="https://www.google.com/url?q=http://www.gothamgazette.com/state/8029-agenda-2019&amp;source=gmail&amp;ust=1542727012992000&amp;usg=AFQjCNFY2bJ6BA6AesUwakCrfkUOqoU35A">Find the rest of the series here</a></em></p> <p>

***
by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

</p> <p>Note - This article has been updated to ntoe that the Capital Stabilization Reserve is $250 million, not $250 billion.&nbsp;</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2018/38830501065_76fa4325c9_z.jpg" alt="Cuomo budget presentation" width="600" height="400" /></p> <p>Gov. Cuomo (photo: The Governor's Office)</p> <hr /> <p style="text-align: center;"><em>This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project<br /><a href="http://www.gothamgazette.com/state/8029-agenda-2019" data-saferedirecturl="https://www.google.com/url?q=http://www.gothamgazette.com/state/8029-agenda-2019&amp;source=gmail&amp;ust=1542727012992000&amp;usg=AFQjCNFY2bJ6BA6AesUwakCrfkUOqoU35A">Find the rest of the series here</a></em></p> <p>New York’s economy has seen several rosy years in the decade since the Great Recession, with a run of steady growth, increasing job numbers, rising wages, and reliable tax revenue that has defied historical trends -- and led to growing city and state government budgets. But 2019 may be the peak of that economic swing as economic experts predict a long-expected slowdown to set in before 2020. New York City, the experts say, seems better equipped to weather any adverse effects of slowing growth and the state may struggle, presenting some hard choices for Democrats who will fully control state government come January and have a long list of priorities, some of which have financial costs attached.</p> <p>Also complicating the fiscal pictures as the state and city levels are projected budget gaps that must be closed, looming negotiations over how to fund the next MTA capital budget plan and its tens of billions of dollars to fix the subways, and the still unclear effects of recent federal tax reforms, among other outstanding questions. The finances of New York City continue to show a rosier picture than those of the state, with the city economy essential to the state’s ability to spend more each year, though the state has grown its budget in much more limited fashion than the city under Mayor Bill de Blasio.</p> <p>In January, Governor Andrew Cuomo will present his State of the State address and executive budget for the fiscal year that begins April 1. Afterward, de Blasio will respond to the governor’s budget plan -- which will set the stage for negotiations with the state Legislature, de Blasio, and others -- and release his own preliminary budget for the next city fiscal year, which will begin July 1. Once the state budget is finalized, the city will be able to take its details -- funding levels, new mandates, and more -- into account as it creates its own budget. The specifics of the annual struggle over what the state is asking or requiring of the city are to be seen, though Cuomo has already indicated he plans to seek more money for the MTA from de Blasio.</p> <p>Budgets are statements of values as much as they are financial planning documents and Cuomo and de Blasio, both Democrats, face pressure each year to balance their policy priorities with fiscal restraint, as well as the demands of others, especially members of the respective legislative bodies each must negotiate with. The governor prides himself on having passed eight on-time or nearly on-time budgets with a 2 percent cap on increased spending, though he is known to manipulate the numbers to say he has stuck to that limit even though some years he has not. De Blasio boasts of record amounts of savings, though watchdogs regularly say that he is not socking away enough given the extended economic boom while he is spending too much, especially in recurring costs like through a significant expansion of the city workforce.</p> <p>The agreed upon state budget was more than $168 billion for the current 2019 fiscal year, with savings that are far too minimal according to every expert. And the mayor’s administration, though praised by fiscal monitors for its responsible financial planning, has overseen ballooning expenditures, passing a nearly $90 billion budget for fiscal 2019 -- it was $72.7 in the final year of the Bloomberg administration.</p> <p>But New York City revenue is largely based on property taxes, which would remain relatively stable even in the event of an economic slowdown. The state on the other hand is far more vulnerable since personal income tax and sales tax contribute a bulk to state revenue.</p> <p>Barring any unforeseen circumstances, the current economic expansion, the second-longest in the country’s history, will continue through most of 2019, bolstered by the federal tax cuts passed in 2017 (even if many New Yorkers’ tax burdens increase due to the new cap on state and local deductibles). It should allow both the state and the city to keep spending, though experts warn that both should prepare for what will happen down the line. Both the Cuomo and de Blasio administrations, along with the state Legislature and City Council, respectively, should be putting more money towards rainy day funds, fiscal experts say; particularly the state, especially as necessary infrastructure investments loom large and add to already rising debt obligations.</p> <p><strong>New York State</strong><br />The state budget remains far more precariously placed in the case of a downturn, even though one isn’t expected to hit soon. The governor has reiterated in recent months that he will continue to abide by a self-imposed 2 percent limit on increased annual expenditures, which presents little wiggle room to add major spending initiatives, though it remains to be seen if the governor will employ one of his many budget maneuvers to obscure actual spending increases. For instance, the&nbsp;<a href="https://www.budget.ny.gov/pubs/press/2018/pr-enactfy19.html">State Fiscal Year 2019 budget</a>, which began April 1, included a provision that funnels Payroll Mobility Tax revenue directly to the MTA instead of going through the state, effectively shifting $1.5 billion out of the budget.</p> <p>“Part of the problem is they’ve technically abided by it but they’ve only done that by shifting things around and reclassifying things, not necessarily through stringent cost controls,” said David Friedfel, director of state studies at Citizens Budget Commission, a nonprofit watchdog. “The more they play those tricks, the harder they will be to find in the future if that’s how they choose to close the gap.”</p> <p>The New York State Division of Budget’s&nbsp;<a href="https://www.budget.ny.gov/pubs/archive/fy19/enac/fy19myfp.pdf">mid-year financial update</a>, released in November, predicted that the state will meet its revenue projections by the end of the fiscal year. Even at the state level, budget gaps remain manageable, at about $3.1 billion for fiscal year 2020, a number that is quickly cut if the 2 percent growth is factored in.</p> <p>State Comptroller Tom DiNapoli released his own&nbsp;<a href="https://www.osc.state.ny.us/reports/budget/2018/quick-start-report.pdf">financial update</a>&nbsp;in November, estimating that overall tax revenues would decrease by 1.8 percent by the end of the state’s 2019 fiscal year (end of March). Though personal income tax revenues are expected to fall by 2.5 percent, business and consumption taxes are set to increase by a total of 6.5 percent, the report estimated. Tax revenues are expected to increase by 5.9 in the 2020 fiscal year and then at a lower rate, 2.4 percent in the 2021 fiscal year.</p> <p>Similar to city representatives, officials in DiNapoli’s office said in a background briefing that they expect a soft landing for the economy, despite the volatility in national and international markets. They have yet to determine the full impacts of the federal tax code overhaul, which capped State and Local Tax (SALT) deductions at $10,000 annually, raising concerns that high earners facing larger tax bills would in some cases fold to out-migration pressures, leaving the state and taking their tax dollars with them. Given New York’s position as a high-tax state, even many upper middle class homeowners in expensive New York City suburbs, and in the city itself, will be facing increased tax burdens, though it is not immediately clear that these factors will lead to a significant increase in the number of higher earners leaving the state. New York has consistently seen out-migration each year and has lost a net of 1 million residents since 2010,&nbsp;<a href="https://www.empirecenter.org/publications/ny-out-migration-tops-1m-since-2010/">according</a>&nbsp;to The Empire Center, a think tank. A report issued by the center&nbsp;<a href="https://www.empirecenter.org/publications/checklist-2018/">in March</a>&nbsp;suggested that the state should undertake several reforms to encourage the economic competitiveness which could help reverse that trend.</p> <p>The state took measures to decouple state tax provisions from the federal tax code, including decoupling from the SALT limit to prevent higher state taxes, and changes to the child tax credit and the single filer deduction. The state also created two new programs -- the Employer Compensation Expense Program and the State Charitable Gifts Trust Fund -- in an effort to limit state taxpayers’ exposure to federal tax changes, but neither program appears to have caught on in any significant way. Officials in the state comptroller’s office said the impacts of the SALT deduction in particular wouldn’t be evident until during next fiscal year, particularly if it encourages people to move out of state.</p> <p>Other risks in federal funding to the state seen in recent years -- Republican proposals to repeal the Affordable Care Act and make drastic cuts to Medicaid -- have also mitigated, the officials said, since those proposals have failed to come to fruition. But federal funding does remain uncertain as Congress is in the middle of negotiating the current federal budget with President Donald Trump, who has threatened a government shutdown if Congress does not approve funding for a wall along the southern border that he had promised Mexico would pay for. The ballooning federal deficit incurred from the Trump-led tax cuts have also increased pressure on federal spending, which could trickle down to the aid that New York receives for transportation, health care, and education, among other things.</p> <p>“The state is in decent financial position but not when you consider the fact that we are nine years or so into an economic expansion,” CBC’s Friedfel said. “The state has been gifted with $12 billion in financial settlements and some additional revenues yet the state’s reserves are not where they should be or could be. They haven’t been added to in about four years. And liabilities are still out there.”</p> <p>As Friedfel noted, the state’s rainy day funds stand at only about $2 billion, a pittance when looked at in the context of a downturn. In the case of a recession, Friedfel estimated, the state could face up to $50 billion in combined losses over a four-year period. “California is doing a very good job on their reserves. They’re gonna have close to 10 percent of state operating spending in their reserves, which is really what New York should be aiming for,” he said. “Instead of $2 billion, we should be closer to $10 billion.”</p> <p>As with the city, the state’s debt also continues to rise, particularly with the governor having launched an ambitious infrastructure program that includes modernizing existing facilities and building new ones across the state, including bridges, airports and bus systems. The state’s debt service payments for fiscal year 2019 stood at $5.5 billion and are&nbsp;<a href="https://www.budget.ny.gov/pubs/archive/fy19/enac/fy19myfp.pdf">projected</a>&nbsp;to rise to $6.6 billion in 2020. New York currently&nbsp;<a href="https://www.osc.state.ny.us/finance/finreports/fcr/2018/debt.htm">ranks</a>&nbsp;second-highest in the country, behind California, in outstanding debt.</p> <p>Year after year, DiNapoli has waved a red flag over the state’s debt obligations and officials in his office are keeping a close eye on whether those will increase in the upcoming year. There will be particularly pressing needs -- the MTA, NYCHA -- where the state will have to work with the city to fund large capital improvements. The current 2015-2019 MTA capital plan remains underfunded and the Fast Forward Plan, proposed by New York City Transit President Andy Byford to modernize the city’s subway and bus systems, may cost nearly $40 billion, with no plan proposed to pay for it in its entirety. A congestion pricing program for New York City has been embraced by the governor and many in the state Legislature as a funding stream, but even if implemented quickly and without carve-outs it would fall far short of meeting the goal.</p> <p>“That’s one of the biggest questions,” said Gelinas from the Manhattan Institute, “especially if the economy continues to do well. How much does Governor Cuomo go after the city for MTA funding and in multiple billions of dollars...and does that cut into the city’s other priorities?”</p> <p>IBO’s Lowenstein also echoed that concern. “The state has a great deal of leverage over the city and its own fiscal concerns and it would be unreasonable to expect these issues get resolved without city participation.”</p> <p>Last time Cuomo and de Blasio negotiated the MTA capital plan, the governor successfully convinced the mayor to significantly increase city funds for the authority. Cuomo has repeatedly stated publicly in recent months that he will be pushing the city to pay “its fair share” for the MTA. De Blasio has called for an added tax on high-earners to provide dedicated funding for the MTA, a proposal that Cuomo has publicly mocked as fantasy on several occasions.</p> <p>The state Legislature next year will also include several newly-elected Democrats who expressed support for increased education funding, per the Campaign for Fiscal Equity decision, which could add billions to the state budget. The state Board of Regents recently proposed a $2.1 billion increase in education funding for next year, which would be a significant jump from the current fiscal year’s increase.</p> <p>New York already spends nearly twice the national average on per-pupil funding, said CBC’s Friedfel, but doesn’t necessarily allocate funding to the districts that need it most. CBC has&nbsp;<a href="https://cbcny.org/research/better-foundation-aid-formula">argued</a>&nbsp;for changing the key formula, known as Foundation Aid, noting that many wealthy districts receive it despite already spending more than the national average and more than the already-high state average by leveraging local tax dollars.</p> <p>Another open question is what the state will do with about $900 million in unspent or unallocated one-time funds from Extraordinary Monetary Settlements, recovered from the financial industry in the wake of the 2008-09 market crash. Since state fiscal year 2015, the state has received nearly $11.2 billion in those settlements.</p> <p>Though the governor has repeatedly said he will divert those funds to capital investments, and he mostly has, he has also used them for budget balancing purposes, DiNapoli’s office noted.</p> <p>“The governor should be putting much more money of any one-time revenue sources aside for the MTA, things like court settlements or just better-than-expected revenues,” Gelinas said, noting the dire need to fund the transit agency. “We haven’t put enough of that money aside for the MTA.” Cuomo has, on the other hand, dedicated financial settlement money to his signature infrastructure projects, like the new Mario M. Cuomo Bridge.</p> <p>Unlikely to impact the next state budget, but certainly on the negotiating table in the new legislative year, is the push to revolutionize how New York provides health insurance and health care. Several legislators, long-time and newly elected, are pushing for the New York Health Act, which would establish a single-payer health care system in the state and could cost nearly $140 billion in additional state expenditure by 2022, according to&nbsp;<a href="https://www.rand.org/pubs/research_reports/RR2424.html">a RAND Corporation study</a>. Though the act could reduce total health care spending by 3 percent by 2031, the study found. Cuomo has said he supports a single-payer system, but has insisted that it should be implemented by the federal government rather than the state, and said that he does not see it make fiscal sense for New York.</p> <p>New York already has one of the largest Medicaid programs in the country, comprising a huge chunk of the state budget (education and Medicaid are the two biggest spending programs). But enrollment has been relatively flat over the last three years. If that trend continues, Friedfel said, the state could find more savings in the budget.</p> <p>Friedfel also noted at least one development on the horizon that could have a significant impact on state tax revenue. “The million pound gorilla in the room is what’s gonna happen with the state’s millionaire’s tax,” Friedfel said. The tax is due to expire on December 31, 2019, and though prominent elected officials have called for extending, and even expanding, the program, CBC’s position is that it should be allowed to sunset to help with the state’s economic competitiveness and to keep high-earners from leaving because of the SALT deduction cap.</p> <p>While Cuomo has overseen its repeated extension and he has dismissed calls to expand it,&nbsp;<a href="http://www.gothamgazette.com/state/8047-tax-issues-at-center-of-new-york-elections-albany-year-to-come">during the recent election cycle</a>&nbsp;he was mum about what he wants to do with the current millionaire’s tax.</p> <p><strong>New York City</strong><br />The city released its latest budget modification in November, revising spending up by $1.4 billion, for a total of $90.56 billion for the 2019 fiscal year, which ends June 30. That marks a high point for city spending, and an $18 billion increase from before de Blasio came to power in 2014. The city’s Office of Management and Budget projects a manageable $3.17 billion budget gap -- the difference between expected revenues and projected expenditures -- for the 2020 fiscal year starting July 1. OMB expects that gap to rise to $3.36 billion for fiscal year 2022, the end of the current four-year financial plan period, by when expenditures are projected to reach a whopping $99.6 billion.</p> <p>As City Comptroller Scott Stringer noted in his <a href="https://comptroller.nyc.gov/reports/annual-state-of-the-citys-economy-and-finances/?utm_source=Media-All&amp;utm_campaign=d8ec0a9cbb-EMAIL_CAMPAIGN_2017_12_08_COPY_01&amp;utm_medium=email&amp;utm_term=0_7cd514b03e-d8ec0a9cbb-109199453">latest financial report</a> released on Friday, OMB tends to issue more conservative estimates of revenues in upcoming years, allowing the administration more leeway to adjust spending. Stringer’s report estimates the budget gap to be lower, about $2.6 billion in FY2019 and $2.8 billion in FY2022. &nbsp;</p> <p>“We’ve come out of a run of a number of years of good economic conditions and good fiscal conditions here in the city...but we’re not seeing anything in the numbers that suggests it’s going to end anytime soon,” said Ronnie Lowenstein, director of the Independent Budget Office, a nonpartisan city-funded agency.</p> <p>In a background briefing, an official at Comptroller Stringer’s office acknowledged that there’s significant uncertainty, with even the Federal Reserve appearing divided about where the economy is heading. There are mixed signals in the market -- unemployment is markedly low which should lead to higher inflation, but hasn’t.</p> <p>But the comptroller’s office is cautiously optimistic and no economist currently projects a recession -- though one is never out of the question -- but rather a return to a slower rate of growth by the time 2020 rolls around.</p> <p>“[We’re] expecting a great deal more softness in economic growth,” said IBO’s Lowenstein. “Not a recession but a much softer U.S. economy. And as far as the local economy’s concerned, we’ve already begun to see the weakening.” She pointed to the drop in job growth over the last few months and also noted that though the job market has diversified with more jobs created outside the financial industry than before the last recession, most of the new jobs have been in lower-paying industries.</p> <p>But she said that slower growth won’t create out-of-control deficits. “We’re looking at gaps that are readily manageable, of the size that we’ve managed in the past,” she said.</p> <p>The official from the comptroller’s office agreed that the city has the capacity to manage outyear budget gaps, particularly with a strong budget surplus each year that has allowed the city to maintain a healthy, if not optimal, level of reserves. The de Blasio administration put away added rainy day funds in the current fiscal year, responding to demands from the City Council. The result included a total of $1.25 billion in the general reserve, $4.35 billion in the Retiree Health Benefits Trust Fund, and $250 million in the capital stabilization reserve.</p> <p>The city’s budget cushion has been increasing over the years and stood at about 11.2 percent at the start of the current fiscal year, though the comptroller has urged the administration to maintain levels between 12 and 18 percent, the lower range of which would have required more than $6.3 billion to hit the upper end.</p> <p><strong><a href="http://www.gothamgazette.com/state/8029-agenda-2019"><img src="http://www.gothamgazette.com/images/graphics/2018/agenda19v2-a.jpg" alt="agenda19v2 a" width="250" height="127" style="margin-right: 10px; float: left;" /></a></strong>There are of course various risks that the city must manage. One big vulnerability, according to the official from the comptroller’s office, is the size of the city’s workforce, which has added more than 30,000 workers under de Blasio.</p> <p>“If you look at the November budget update...the biggest issue is the increased expected spending on labor,” said Nicole Gelinas, senior fellow at the Manhattan Institute, a think tank. She noted that <a href="https://www1.nyc.gov/assets/omb/downloads/pdf/fp11-18.pdf">the report</a> increased the labor reserve for fiscal year 2020 by $704 million, for 2021 by nearly $1 billion and for 2022 by about $1.4 billion.</p> <p>“It just shows that these labor agreements that the mayor is making with the unions are costing a little bit more money than expected,” she said. “So the basic story is if the economy keeps doing well, we can probably squeak by with balancing next year’s budget...but if the economy does fall into a recession, with the higher labor costs making these deficits a little bit bigger over the next few years, they would pose a bigger problem for the city.”</p> <p>Gelinas said the city must take aggressive cost-cutting measures in labor agreements, particularly health care spending, to help avert layoffs and service cuts in the case of a recession. “Longterm, health care savings have to be much more aggressive,” she said. “The healthcare fringe benefit budget for the upcoming fiscal year will be almost $11.5 billion and it’s continuing to rise. It’s going to $12.5 billion by the end of the financial plan.”</p> <p>“No mayor has ever gotten through two terms without a recession,” she added on the eve of de Blasio’s sixth year in office.</p> <p>The city’s debt obligations have also been rising, owing to a massive capital program, which pays for building and maintaining the city’s infrastructure such as roads, parks, schools, and libraries.</p> <p>“Debt service is one of the two big sources of growth in city spending,” said IBO’s Lowenstein, referring to the annual debt payments that are included in the city’s expense budget. “It’s debt service and healthcare, and they’re both big and they’re both growing very fast.” Debt service -- which is accounted for in the city’s annual operating budget -- is budgeted at a total of $6.8 billion for fiscal year 2019, according to the November update, and is expected to rise to $8.3 billion by fiscal year 2022.</p> <p>Unlike most other municipalities, New York City’s capital program is funded entirely through borrowing, incurring massive debt that must necessarily be paid off every year, which could pose problems in the long run. “It’s less that we can’t continue to pay the debt service on the commitments that we’ve made but rather that they’re crowding out other things that the city might want to do,” Lowenstein said. “And our ability to expand those capital commitments is not unlimited. Especially in an era when interest rates are rising.”</p> <p>Rising debt service also gives the mayor and City Council “less leeway to budget for other things ranging from teachers to cops to road repair,” she said.</p> <p>Stringer has repeatedly raised the issue of rising debt, though it’s not yet out of control. The rule of thumb for his office is that debt service should not exceed 15 percent of tax revenues, a level it is well below currently. And the City Council has also attempted to make changes to the mismanaged capital funding process, creating a new subcommittee this year dedicated to examining the capital budget, finding ways to make it more efficient and reducing cost overruns. Upcoming City Council budget hearings may indicate whether that subcommittee and its focus are having any real impact.</p> <p>But there are big items that may add significantly to the city’s capital investments and therefore create an additional debt burden. Those include funding for the beleaguered New York City Housing Authority (NYCHA) and the state-run Metropolitan Transportation Authority (MTA). In both cases, the city may have no choice but to commit billions more dollars, particularly pending the outcome of negotiations with federal officials over NYCHA and with state officials over the MTA, for which the city typically kicks in significant capital funds.</p> <p>“The city may not have choices so the speed with which this occurs may be out of our hands,” Lowenstein said.</p> <p style="text-align: center;"><em>This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project<br /><a href="http://www.gothamgazette.com/state/8029-agenda-2019" data-saferedirecturl="https://www.google.com/url?q=http://www.gothamgazette.com/state/8029-agenda-2019&amp;source=gmail&amp;ust=1542727012992000&amp;usg=AFQjCNFY2bJ6BA6AesUwakCrfkUOqoU35A">Find the rest of the series here</a></em></p> <p>

***
by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

</p> <p>Note - This article has been updated to ntoe that the Capital Stabilization Reserve is $250 million, not $250 billion.&nbsp;</p>
What's The [Data] Point? 2,268, 'Deinstitutionalization' in New York 2018-12-13T05:00:00+00:00 2018-12-13T05:00:00+00:00 http://www.gothamgazette.com/city/8140-what-s-the-data-point-2-268-deinstitutionalization-in-new-york Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 61</strong><strong> - 2,268, 'Deinstitutionalization' in New York, with Stephen Eide of the Manhattan Institute [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/wtdp-stephen-eide.jpg" alt="wtdp stephen eide" width="277" height="184" style="margin: 10px; float: left;" /></p> <p>Stephen Eide, a senior fellow at the Manhattan Institute for Policy Research, is the author of <a href="https://www.manhattan-institute.org/sites/default/files/R-SE-1118.pdf" target="_blank" rel="noopener">a new report</a>&nbsp;about New York’s inpatient mental healthcare system, the state push toward deinstitutionalization, and what it has meant for people with serious mental illness and New York City. "Cuts to state psychiatric hospital beds has coincided, in recent years, with increasing mental illness-related pressures on the city’s homeless services and criminal justice systems," Eide argues.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/544477803&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="180" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 61</strong><strong> - 2,268, 'Deinstitutionalization' in New York, with Stephen Eide of the Manhattan Institute [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/wtdp-stephen-eide.jpg" alt="wtdp stephen eide" width="277" height="184" style="margin: 10px; float: left;" /></p> <p>Stephen Eide, a senior fellow at the Manhattan Institute for Policy Research, is the author of <a href="https://www.manhattan-institute.org/sites/default/files/R-SE-1118.pdf" target="_blank" rel="noopener">a new report</a>&nbsp;about New York’s inpatient mental healthcare system, the state push toward deinstitutionalization, and what it has meant for people with serious mental illness and New York City. "Cuts to state psychiatric hospital beds has coincided, in recent years, with increasing mental illness-related pressures on the city’s homeless services and criminal justice systems," Eide argues.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/544477803&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="180" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
What's The [Data] Point? 18.6%, New York's Inequality & Social Safety Net 2018-11-30T05:00:00+00:00 2018-11-30T05:00:00+00:00 http://www.gothamgazette.com/city/8113-what-s-the-data-point-18-6-new-york-s-inequality-social-safety-net Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 60</strong><strong> -- 18.6%, Inequality and the Social Safety Net, with Greg David and Cara Eisenpress [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/gregdavid-caraepress-amazon.jpg" alt="gregdavid caraepress amazon" width="221" height="147" style="margin: 10px; float: left;" />18.6% is the poverty rate in New York City. Greg David and Cara Eisenpress, both from Crain's New York Business and the Craig Newmark Graduate School of Journalism at CUNY, discuss <a href="https://www.crainsnewyork.com/features/state-inequality-new-yorks-safety-net-made-possible-very-inequity-it-targets" target="_blank" rel="noopener">their recent reporting</a> exploring New York City's safety net, how it's funded, and how it compares to other places, while showing that the city's robust safety net is made possible by the city's vast inequality and tax structure.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/537970857&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="180" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 60</strong><strong> -- 18.6%, Inequality and the Social Safety Net, with Greg David and Cara Eisenpress [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/gregdavid-caraepress-amazon.jpg" alt="gregdavid caraepress amazon" width="221" height="147" style="margin: 10px; float: left;" />18.6% is the poverty rate in New York City. Greg David and Cara Eisenpress, both from Crain's New York Business and the Craig Newmark Graduate School of Journalism at CUNY, discuss <a href="https://www.crainsnewyork.com/features/state-inequality-new-yorks-safety-net-made-possible-very-inequity-it-targets" target="_blank" rel="noopener">their recent reporting</a> exploring New York City's safety net, how it's funded, and how it compares to other places, while showing that the city's robust safety net is made possible by the city's vast inequality and tax structure.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/537970857&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="180" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
A Closer Look at the Tax Incentives in the Amazon Deal 2018-11-28T05:00:00+00:00 2018-11-28T05:00:00+00:00 http://www.gothamgazette.com/state/8110-a-closer-look-at-the-tax-incentives-in-the-amazon-deal Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2018/govcoumo-realestate.jpg" alt="govcoumo realestate" width="600" height="327" /></p> <p>Cuomo, de Blasio &amp; an Amazon rep celebrate (photo: Kevin P. Coughlin/Governor's Office)</p> <hr /> <p>Amazon’s decision to put a corporate campus in Long Island City after a year-long, somewhat-public search for a host city and a series of incentives from New York City and State has drawn skepticism and outrage in Queens and beyond for a number of reasons.</p> <p>Some activists and elected officials oppose the secretive process by which Amazon got its land, tax breaks and grant, others feel like the company isn’t a corporate entity the city and state should be welcoming because of labor, political and other practices. But all of the opponents to the Amazon deal seem to agree that that package of roughly $3 billion in incentives the trillion-dollar corporation is getting from New York is out of bounds, an inappropriate giveaway based on old economics, in the midst of both a strong overall city economy with low unemployment on one hand and affordable housing, public housing, and transportation crises on the other.</p> <p>And while a look at the programs in question reveals that Amazon doesn’t appear to be getting tax incentives or breaks that wouldn’t be available to other large employers who set up shop in New York, economists and budget watchdogs suggest the outrage over the tax break package Amazon is getting presents an opportunity to reexamine New York’s use of subsidies to entice companies. (Note: there is one discretionary capital grant in the deal for roughly $500 million that is separate from the $2.5 billion in city and state tax incentives.)</p> <p><strong>Where does the money come from?</strong><br /> The three largest incentives Amazon is getting from New York come from three as-of-right (that is, incentives available to any company that meets the requirements) programs: the <a href="https://cdn.esd.ny.gov/businessprograms/data/excelsior/excelsiorjobsprogramoverview.pdf" target="_blank" rel="noopener">Excelsior Jobs Credit Tax Program</a>, the <a href="https://www1.nyc.gov/site/finance/benefits/business-reap.page" target="_blank" rel="noopener">Relocation and Expansion Assistance Program</a> (REAP) and the <a href="https://www1.nyc.gov/site/finance/benefits/benefits-industrial-and-commercial-abatement-program-icap.page" target="_blank" rel="noopener">Industrial and Commercial Abatement Program</a> (ICAP). The latter two tax breaks are incentives established by the state government that affect the city tax rolls, while the former program affects state tax rolls.</p> <p>“They’re state created, like 421-a,” John Kaehny, the Executive Director of Reinvent Albany, told Gotham Gazette about ICAP and REAP, with reference to the tax break known as 421-a that seeks to incent housing development with some affordability included. “So the New York City Department of Finance administers them, but they have to, they're made to by state law. Basically it's money that the state is directing be taken out of the city's tax revenue.”</p> <p>Along with their as-of-right nature, all three programs require a company actually delivers jobs in order to take advantage of the breaks. In that sense, Amazon is no different from <a href="https://www.syracuse.com/state/index.ssf/2016/06/cuomo_announces_at_hotel_syracuse.html" target="_blank" rel="noopener">a hotel company</a> or <a href="https://globenewswire.com/news-release/2017/03/31/947547/0/en/Akoustis-Receives-Incentive-Package-Providing-Up-to-8-Million-in-Tax-Credits-Related-to-Its-Planned-Expansion-into-Upstate-New-York.html" target="_blank" rel="noopener">mobile phone infrastructure company</a> or <a href="https://commercialobserver.com/2016/04/tishman-speyer-seeks-city-state-tax-incentives-for-707m-lic-project/" target="_blank" rel="noopener">real estate company</a> in applying for the programs. In the case of the Excelsior program, Amazon is taking advantage of a refundable tax credit equal to 6.85 percent of the total wages per new full-time job they create, and a capital investment credit equal to 2 percent of a company’s total qualified investments that result in new jobs.</p> <p>For the city tax breaks, ICAP is a tax abatement program that may last up to 25 years, available to companies who undertake new commercial construction in areas outside of some exempted sections of Manhattan. It appears Amazon will be eligible for a 15-year ICAP that begins to decline in year 12. REAP is a per-job tax credit in which companies from either outside New York City or below 96th Street in Manhattan get a $3,000 per employee credit for 12 years for each employee that moves into the new office outside the REAP area.</p> <p>In addition to the above programs, Amazon is also getting a cash grant from the state called an <a href="https://esd.ny.gov/regional-council-capital-fund-program" target="_blank" rel="noopener">Empire State Development Capital Grant</a> that’s potentially worth $505 million and is supposed to help defray some of the costs from building the new corporate campus. And because New York State is taking over the land where the office will be located and making it tax-exempt, Amazon will make payments in lieu of taxes (PILOTs) that the city has said will be equal to the property tax bill the company would pay on the land otherwise. Half of the money from the PILOT will go to the city’s general fund, and half of it will go towards infrastructure improvements around Long Island City.</p> <p>All told, the tax breaks from the jobs credit, ICAP and REAP and the capital grant could wind up adding up to $3 billion in incentives to Amazon, if the company delivers the 25,000 jobs it’s promised over the course of 10 years.</p> <p><strong>What’s the problem exactly?</strong><br />In his media appearances and statements to defend the incentive package, Governor Cuomo has suggested that these kinds of tax breaks are <a href="https://www.wnyc.org/story/gov-cuomo-talks-amazon-state-senate-primaries-and-more/" target="_blank" rel="noopener">just the cost of doing business in America</a>. But some economists, like James Parrott, the Director of Economic and Fiscal Policies at the Center for New York Affairs, say the programs are working off of a somewhat dated economic model, especially since he found that the city gave up almost $6 billion in tax revenue in Fiscal Year 2018 thanks to a stew of incentive programs like ICAP and REAP.</p> <p>The predecessors to ICAP and REAP arrived in “a different historical economic context, coming on the heels of the 1970s when there was a lot of corporate headquarters movement out of New York City,” Parrott told Gotham Gazette. “With the loss of 600,000 jobs between 1973 and 1979, it was a really difficult economic period for the city. So in the 1980s the city put in place, and ramped up its commitment to subsidize corporations to stay in New York City, to relocate to New York City and to add employment.” But these days, Parrott says the city’s economy is healthy enough to function without massive incentives.</p> <p>“We're now at a point where the total employment level in New York City is 4.3 million, almost 700,000 to 800,000 higher than it's ever been before,” he said. “Arguably New York City doesn't need to do anything to subsidize new economic development investments, given the very rapid employment growth we've had in recent years.”</p> <p>Though he continues to stress that his administration refuses cash grants to companies, de Blasio also continues to defend the Amazon deal, including the use of the subsidies involved, again doing both during <a href="http://www.ny1.com/nyc/all-boroughs/inside-city-hall/2018/11/27/mondays-with-the-mayor-bill-de-blasio-defends-incentives-amazon-received-for-hq2" target="_blank" rel="noopener">his weekly NY1 appearance</a> on Monday. “[W[hat we need to move towards is a society where it’s not about cities competing” over companies, the mayor told host Errol Louis. “The specific incentives were automatic and part of state law,” was also part of his defense, and he suggested that if people want to see an end to the as-of-right programs, people should debate that in the future.</p> <p>Parrott said he could understand the use of the Excelsior programs upstate, given the region’s struggling economy and what he said was a better oversight process than the program’s predecessor, the <a href="https://www.nytimes.com/2005/04/06/nyregion/development-program-gets-new-life-but-not-without-debate.html" target="_blank" rel="noopener">extremely</a> <a href="https://dailygazette.com/article/2008/02/11/0211_dinapoli" target="_blank" rel="noopener">troubled and criticized</a> <a href="https://www.syracuse.com/state/index.ssf/2017/08/empire_zones_nys_failed_aid_to_companies_keep_costing_taxpayers_3_billion_plus.html" target="_blank" rel="noopener">Empire Zone program</a>. But the entire program also has an annual cap ($183 million in 2019 and steadily decreasing to $36 million in 2024 <a href="https://cbcny.org/research/breaking-down-amazon-hq2-deal?utm_source=Breaking+Down+the+Amazon+HQ2+Deal%3A+Facts+and+Takeaways&amp;utm_campaign=Breaking+Down+the+Amazon+HQ2+Deal%3A+Facts+and+Takeaways&amp;utm_medium=email" target="_blank" rel="noopener">per the Citizens Budget Commission</a>) that will have to be raised by the state Legislature if Amazon creates all of the jobs it’s promised, leaving Parrott to wonder, “why on Earth, if you have these limited tax credit resources, you spend those in New York City? The one place in the state that that least needs economic development subsidies?”</p> <p>Kaehny sees some self-promotion as a motivating factor in giving state money to Amazon, specifically on the part of the governor. “Cuomo wants to create a narrative that shows that he had some agency, that he was the one that closed this deal with Amazon, that he did something that caused this deal to happen,” Kaehny said. “If Amazon says, ‘Well we don't care about the subsidies at all, we really just wanted New York City and this terrific dynamic place with a huge job market of talented people, the kind that we want working for Amazon and we don't really need subsidies,’ well then what's Cuomo’s role in landing the deal?”</p> <p>It’s an especially pertinent question according to Kaehny and others who insist that Amazon was probably going to come to New York anyway. Both <a href="https://bnanews.bna.com/daily-labor-report/amazon-hq2-losers-say-tech-talent-was-sticking-point" target="_blank" rel="noopener">before</a> and <a href="https://nypost.com/2018/11/14/amazon-says-3b-in-tax-breaks-didnt-sway-hq2-decisions/" target="_blank" rel="noopener">after</a> identifying Long Island City as one of its landing spots, Amazon officials said that the ease of recruiting tech talent was the key ingredient in their search. A request for information <a href="http://www.wbur.org/bostonomix/2018/11/21/amazon-somerville-pitch-rfi" target="_blank" rel="noopener">that Amazon sent to Somerville, Massachusetts</a> included one question about the incentive package the city could offer, but multiple questions about quality of life and the area’s working populations.</p> <p>That in turn raises the issue of where New York should actually invest, in businesses or in infrastructure, according to Jonas Shaende, the chief economist at the Fiscal Policy Institute. “Should we just give [companies] tax subsidies outright or should we invest in what makes New York so attractive and so vibrant and so great? In the things that that are the real factors in in their decision making, things like the transportation system, the affordable housing the access to to labor, to education facilities those kinds of things.”</p> <p>Shaende wasn’t alone in that line of thinking, as redirecting state subsidies from corporations towards local infrastructure was a centerpiece of the <a href="https://www.nydailynews.com/news/politics/ny-pol-molinaro-business-payments-20180622-story.html" target="_blank" rel="noopener">Marc Molinaro</a> and <a href="https://www.timesunion.com/local/article/Churchill-Stephanie-Miner-has-an-upstate-state-13012078.php" target="_blank" rel="noopener">Stephanie Miner</a> campaigns for governor.</p> <p><strong>It’s real money</strong><br /> Another one of the governor’s defenses of the incentive package is that New York isn’t actually paying Amazon anything at all, but rather is letting the company pay slightly less in taxes than it would otherwise. In his “op-ed” published to the governor’s official website, <a href="https://www.governor.ny.gov/news/op-ed-governor-andrew-m-cuomo" target="_blank" rel="noopener">Cuomo writes</a>:</p> <blockquote>“Our proposal offered that, when and if those revenues are realized, the government would effectively reduce their $1 billion payment by about $100 million for a net to New York of approximately $900 million. New York doesn't give Amazon $100 million. Amazon gives New York $900 million.”</blockquote> <p>It’s a rhetorical sleight of hand that doesn’t pass muster with any expert Gotham Gazette spoke to. “I mean, that's just fundamentally wrong because essentially all economists left, right, wherever agree that a tax abatement or tax credit is a form of expenditure by government and is rightly called a subsidy,” Kaehny said, pointing out that the Governmental Accounting Standards Board (which sets the rules for financial reporting by government entities) <a href="https://www.gasb.org/jsp/GASB/Document_C/GASBDocumentPage?cid=1176166283745&amp;acceptedDisclaimer=true" target="_blank" rel="noopener">now has a rule that counts subsidies as expenditures</a>.</p> <p>And in the case of the capital grant Amazon is getting, the cash is very much real. “It's clearly a case where it's a budget choice [Cuomo's] making, here's $500 million in taxpayer resources we're going to give to Amazon rather than use it for something else,” Parrott said.</p> <p>“[Cuomo] happens to have a reserve of resources, out of which it’s very likely that this money is going to come,” Parrott said, talking about New York settlements reached with banks who are alleged to have committed mortgage securities and other financial fraud. “Although there wasn't anything said in the memorandum of understanding with [Empire State Development] and the state and the city that said where the capital monies are going to come from, my guess is it will come out of the reserve,” he said. Cuomo has indicated he does not need legislative approval for the capital grant, but legislators, especially those opposing the deal like Queens state Senator Michael Gianaris, are exploring all their options to block or change the deal.</p> <p>The Citizens Budget Commission was measured in its critique of the grant, comparing the reimbursement-style payments as better than upfront costs the state has taken on with, for instance, the <a href="https://www.nytimes.com/2018/07/02/nyregion/cuomo-buffalo-billion-ny-kaloyeros.html" target="_blank" rel="noopener">$750 million solar panel plant it built in Buffalo</a>. But CBC still criticized the <a href="https://www.politico.com/states/new-york/albany/story/2018/11/15/cuomo-administration-contradicts-itself-on-amazon-deal-approval-700871" target="_blank" rel="noopener">ongoing lack of oversight</a> for where the money would come from. The grant has also been criticized in <a href="https://nypost.com/2018/11/13/blame-unions-for-new-yorks-pricey-giveaway-to-amazon/" target="_blank" rel="noopener">multiple</a> <a href="https://www.bloomberg.com/opinion/articles/2018-11-15/amazon-s-hq2-costs-more-in-new-york-because-of-unions" target="_blank" rel="noopener">corners</a> as a sop to Cuomo-friendly construction unions, with critics charging the state is essentially paying Amazon to use union labor.</p> <p>And the subsidies also open New York up to the double whammy of even more companies asking for the kinds of tax breaks Amazon is set to receive while at the same time trying to provide services and pay for them in a state budget operating under the governor’s self-imposed 2 percent cap on annual spending increases.</p> <p>“It’s not a fiscally responsible way of running government,” Shaende said. “It could be potentially highly problematic for the state, because the state still relies on taxes. And we have the 2 percent spending growth cap, we have all sorts of measures that that the governor adopted to show that he's running a very fiscally responsible shop. He saves money, let's say, by cutting services, by finding efficiencies, in joint services between municipalities. So he saves, you know, a couple of nickels here a couple of dimes over there, and then he just splurges like this.”</p> <p><strong>Could this spur change?</strong><br /> As lawmakers scramble to find a way to stop or change Amazon’s incentive package, there’s at least some hope among reformers that the publicity surrounding the deal can lead to a change in how the state and city use tax incentives. The incentives all going towards one company has already brought more attention to the ways New York uses them than their use for the Hudson Yards development, Parrott said, despite the fact that “the total cost of the Hudson Yards tax breaks rival the amount of the city and state subsidy to Amazon.”</p> <p>The surrounding outrage may also give new life to the proposed subsidy tracker known as the “<a href="http://www.gothamgazette.com/opinion/7542-sunlight-for-subsidies" target="_blank" rel="noopener">Database of Deals</a>,” an idea that Reinvent Albany’s Alex Camarda pointed out “is not rocket science” in Assembly testimony for more accountability in the state’s economic development funds last year. It is a transparency measure Comptroller Tom DiNapoli has called for but Cuomo has opposed; it passed the Republican-led state Senate earlier this year, but was not given a vote in the Democrat-led Assembly.</p> <p>According to Shonede, the database not only could provide transparency to what’s going on in the state, but a better template for future spending.</p> <p>“As a community of experts, we need to stress some basic accountability, how many jobs we get per dollar spent, and what kind of jobs they are,” Shoende told Gotham Gazette. “And if we do that, in a consistent and serious way, a basic accounting of these efforts, it’s going to be obvious that the best way to improve the situation with income inequality, and lack of good jobs in vulnerable communities and improving the business climate have to do with what the traditional role of the government is supposed to be. And that is making sure that people are safe, that they are well prepared for the market, and that the infrastructure is such that it minimizes the business costs for the businesses that you see operate in the neighborhoods,” he said.</p> <p>And so in his own way, despite resisting intensive oversight of the state’s economic development initiatives, the governor may have inadvertently dragged the state’s subsidy programs further towards daylight. “This is kind of a like peeling the onion of Albany dysfunction and scurviness in a microcosm, this deal,” said Kaehny. “Because there's all this stuff baked in here that's been going on for a long time time. But it's like for the first time people in New York City were like ‘Oh s***,’ but reality is they've been doing this for many, many years.”</p> <p>

***
by Dave Colon, Gotham Gazette
     

Read more by this writer.

</p> <p>Note: this article has been updated with more clear description of Amazon's eligibility for ICAP.</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2018/govcoumo-realestate.jpg" alt="govcoumo realestate" width="600" height="327" /></p> <p>Cuomo, de Blasio &amp; an Amazon rep celebrate (photo: Kevin P. Coughlin/Governor's Office)</p> <hr /> <p>Amazon’s decision to put a corporate campus in Long Island City after a year-long, somewhat-public search for a host city and a series of incentives from New York City and State has drawn skepticism and outrage in Queens and beyond for a number of reasons.</p> <p>Some activists and elected officials oppose the secretive process by which Amazon got its land, tax breaks and grant, others feel like the company isn’t a corporate entity the city and state should be welcoming because of labor, political and other practices. But all of the opponents to the Amazon deal seem to agree that that package of roughly $3 billion in incentives the trillion-dollar corporation is getting from New York is out of bounds, an inappropriate giveaway based on old economics, in the midst of both a strong overall city economy with low unemployment on one hand and affordable housing, public housing, and transportation crises on the other.</p> <p>And while a look at the programs in question reveals that Amazon doesn’t appear to be getting tax incentives or breaks that wouldn’t be available to other large employers who set up shop in New York, economists and budget watchdogs suggest the outrage over the tax break package Amazon is getting presents an opportunity to reexamine New York’s use of subsidies to entice companies. (Note: there is one discretionary capital grant in the deal for roughly $500 million that is separate from the $2.5 billion in city and state tax incentives.)</p> <p><strong>Where does the money come from?</strong><br /> The three largest incentives Amazon is getting from New York come from three as-of-right (that is, incentives available to any company that meets the requirements) programs: the <a href="https://cdn.esd.ny.gov/businessprograms/data/excelsior/excelsiorjobsprogramoverview.pdf" target="_blank" rel="noopener">Excelsior Jobs Credit Tax Program</a>, the <a href="https://www1.nyc.gov/site/finance/benefits/business-reap.page" target="_blank" rel="noopener">Relocation and Expansion Assistance Program</a> (REAP) and the <a href="https://www1.nyc.gov/site/finance/benefits/benefits-industrial-and-commercial-abatement-program-icap.page" target="_blank" rel="noopener">Industrial and Commercial Abatement Program</a> (ICAP). The latter two tax breaks are incentives established by the state government that affect the city tax rolls, while the former program affects state tax rolls.</p> <p>“They’re state created, like 421-a,” John Kaehny, the Executive Director of Reinvent Albany, told Gotham Gazette about ICAP and REAP, with reference to the tax break known as 421-a that seeks to incent housing development with some affordability included. “So the New York City Department of Finance administers them, but they have to, they're made to by state law. Basically it's money that the state is directing be taken out of the city's tax revenue.”</p> <p>Along with their as-of-right nature, all three programs require a company actually delivers jobs in order to take advantage of the breaks. In that sense, Amazon is no different from <a href="https://www.syracuse.com/state/index.ssf/2016/06/cuomo_announces_at_hotel_syracuse.html" target="_blank" rel="noopener">a hotel company</a> or <a href="https://globenewswire.com/news-release/2017/03/31/947547/0/en/Akoustis-Receives-Incentive-Package-Providing-Up-to-8-Million-in-Tax-Credits-Related-to-Its-Planned-Expansion-into-Upstate-New-York.html" target="_blank" rel="noopener">mobile phone infrastructure company</a> or <a href="https://commercialobserver.com/2016/04/tishman-speyer-seeks-city-state-tax-incentives-for-707m-lic-project/" target="_blank" rel="noopener">real estate company</a> in applying for the programs. In the case of the Excelsior program, Amazon is taking advantage of a refundable tax credit equal to 6.85 percent of the total wages per new full-time job they create, and a capital investment credit equal to 2 percent of a company’s total qualified investments that result in new jobs.</p> <p>For the city tax breaks, ICAP is a tax abatement program that may last up to 25 years, available to companies who undertake new commercial construction in areas outside of some exempted sections of Manhattan. It appears Amazon will be eligible for a 15-year ICAP that begins to decline in year 12. REAP is a per-job tax credit in which companies from either outside New York City or below 96th Street in Manhattan get a $3,000 per employee credit for 12 years for each employee that moves into the new office outside the REAP area.</p> <p>In addition to the above programs, Amazon is also getting a cash grant from the state called an <a href="https://esd.ny.gov/regional-council-capital-fund-program" target="_blank" rel="noopener">Empire State Development Capital Grant</a> that’s potentially worth $505 million and is supposed to help defray some of the costs from building the new corporate campus. And because New York State is taking over the land where the office will be located and making it tax-exempt, Amazon will make payments in lieu of taxes (PILOTs) that the city has said will be equal to the property tax bill the company would pay on the land otherwise. Half of the money from the PILOT will go to the city’s general fund, and half of it will go towards infrastructure improvements around Long Island City.</p> <p>All told, the tax breaks from the jobs credit, ICAP and REAP and the capital grant could wind up adding up to $3 billion in incentives to Amazon, if the company delivers the 25,000 jobs it’s promised over the course of 10 years.</p> <p><strong>What’s the problem exactly?</strong><br />In his media appearances and statements to defend the incentive package, Governor Cuomo has suggested that these kinds of tax breaks are <a href="https://www.wnyc.org/story/gov-cuomo-talks-amazon-state-senate-primaries-and-more/" target="_blank" rel="noopener">just the cost of doing business in America</a>. But some economists, like James Parrott, the Director of Economic and Fiscal Policies at the Center for New York Affairs, say the programs are working off of a somewhat dated economic model, especially since he found that the city gave up almost $6 billion in tax revenue in Fiscal Year 2018 thanks to a stew of incentive programs like ICAP and REAP.</p> <p>The predecessors to ICAP and REAP arrived in “a different historical economic context, coming on the heels of the 1970s when there was a lot of corporate headquarters movement out of New York City,” Parrott told Gotham Gazette. “With the loss of 600,000 jobs between 1973 and 1979, it was a really difficult economic period for the city. So in the 1980s the city put in place, and ramped up its commitment to subsidize corporations to stay in New York City, to relocate to New York City and to add employment.” But these days, Parrott says the city’s economy is healthy enough to function without massive incentives.</p> <p>“We're now at a point where the total employment level in New York City is 4.3 million, almost 700,000 to 800,000 higher than it's ever been before,” he said. “Arguably New York City doesn't need to do anything to subsidize new economic development investments, given the very rapid employment growth we've had in recent years.”</p> <p>Though he continues to stress that his administration refuses cash grants to companies, de Blasio also continues to defend the Amazon deal, including the use of the subsidies involved, again doing both during <a href="http://www.ny1.com/nyc/all-boroughs/inside-city-hall/2018/11/27/mondays-with-the-mayor-bill-de-blasio-defends-incentives-amazon-received-for-hq2" target="_blank" rel="noopener">his weekly NY1 appearance</a> on Monday. “[W[hat we need to move towards is a society where it’s not about cities competing” over companies, the mayor told host Errol Louis. “The specific incentives were automatic and part of state law,” was also part of his defense, and he suggested that if people want to see an end to the as-of-right programs, people should debate that in the future.</p> <p>Parrott said he could understand the use of the Excelsior programs upstate, given the region’s struggling economy and what he said was a better oversight process than the program’s predecessor, the <a href="https://www.nytimes.com/2005/04/06/nyregion/development-program-gets-new-life-but-not-without-debate.html" target="_blank" rel="noopener">extremely</a> <a href="https://dailygazette.com/article/2008/02/11/0211_dinapoli" target="_blank" rel="noopener">troubled and criticized</a> <a href="https://www.syracuse.com/state/index.ssf/2017/08/empire_zones_nys_failed_aid_to_companies_keep_costing_taxpayers_3_billion_plus.html" target="_blank" rel="noopener">Empire Zone program</a>. But the entire program also has an annual cap ($183 million in 2019 and steadily decreasing to $36 million in 2024 <a href="https://cbcny.org/research/breaking-down-amazon-hq2-deal?utm_source=Breaking+Down+the+Amazon+HQ2+Deal%3A+Facts+and+Takeaways&amp;utm_campaign=Breaking+Down+the+Amazon+HQ2+Deal%3A+Facts+and+Takeaways&amp;utm_medium=email" target="_blank" rel="noopener">per the Citizens Budget Commission</a>) that will have to be raised by the state Legislature if Amazon creates all of the jobs it’s promised, leaving Parrott to wonder, “why on Earth, if you have these limited tax credit resources, you spend those in New York City? The one place in the state that that least needs economic development subsidies?”</p> <p>Kaehny sees some self-promotion as a motivating factor in giving state money to Amazon, specifically on the part of the governor. “Cuomo wants to create a narrative that shows that he had some agency, that he was the one that closed this deal with Amazon, that he did something that caused this deal to happen,” Kaehny said. “If Amazon says, ‘Well we don't care about the subsidies at all, we really just wanted New York City and this terrific dynamic place with a huge job market of talented people, the kind that we want working for Amazon and we don't really need subsidies,’ well then what's Cuomo’s role in landing the deal?”</p> <p>It’s an especially pertinent question according to Kaehny and others who insist that Amazon was probably going to come to New York anyway. Both <a href="https://bnanews.bna.com/daily-labor-report/amazon-hq2-losers-say-tech-talent-was-sticking-point" target="_blank" rel="noopener">before</a> and <a href="https://nypost.com/2018/11/14/amazon-says-3b-in-tax-breaks-didnt-sway-hq2-decisions/" target="_blank" rel="noopener">after</a> identifying Long Island City as one of its landing spots, Amazon officials said that the ease of recruiting tech talent was the key ingredient in their search. A request for information <a href="http://www.wbur.org/bostonomix/2018/11/21/amazon-somerville-pitch-rfi" target="_blank" rel="noopener">that Amazon sent to Somerville, Massachusetts</a> included one question about the incentive package the city could offer, but multiple questions about quality of life and the area’s working populations.</p> <p>That in turn raises the issue of where New York should actually invest, in businesses or in infrastructure, according to Jonas Shaende, the chief economist at the Fiscal Policy Institute. “Should we just give [companies] tax subsidies outright or should we invest in what makes New York so attractive and so vibrant and so great? In the things that that are the real factors in in their decision making, things like the transportation system, the affordable housing the access to to labor, to education facilities those kinds of things.”</p> <p>Shaende wasn’t alone in that line of thinking, as redirecting state subsidies from corporations towards local infrastructure was a centerpiece of the <a href="https://www.nydailynews.com/news/politics/ny-pol-molinaro-business-payments-20180622-story.html" target="_blank" rel="noopener">Marc Molinaro</a> and <a href="https://www.timesunion.com/local/article/Churchill-Stephanie-Miner-has-an-upstate-state-13012078.php" target="_blank" rel="noopener">Stephanie Miner</a> campaigns for governor.</p> <p><strong>It’s real money</strong><br /> Another one of the governor’s defenses of the incentive package is that New York isn’t actually paying Amazon anything at all, but rather is letting the company pay slightly less in taxes than it would otherwise. In his “op-ed” published to the governor’s official website, <a href="https://www.governor.ny.gov/news/op-ed-governor-andrew-m-cuomo" target="_blank" rel="noopener">Cuomo writes</a>:</p> <blockquote>“Our proposal offered that, when and if those revenues are realized, the government would effectively reduce their $1 billion payment by about $100 million for a net to New York of approximately $900 million. New York doesn't give Amazon $100 million. Amazon gives New York $900 million.”</blockquote> <p>It’s a rhetorical sleight of hand that doesn’t pass muster with any expert Gotham Gazette spoke to. “I mean, that's just fundamentally wrong because essentially all economists left, right, wherever agree that a tax abatement or tax credit is a form of expenditure by government and is rightly called a subsidy,” Kaehny said, pointing out that the Governmental Accounting Standards Board (which sets the rules for financial reporting by government entities) <a href="https://www.gasb.org/jsp/GASB/Document_C/GASBDocumentPage?cid=1176166283745&amp;acceptedDisclaimer=true" target="_blank" rel="noopener">now has a rule that counts subsidies as expenditures</a>.</p> <p>And in the case of the capital grant Amazon is getting, the cash is very much real. “It's clearly a case where it's a budget choice [Cuomo's] making, here's $500 million in taxpayer resources we're going to give to Amazon rather than use it for something else,” Parrott said.</p> <p>“[Cuomo] happens to have a reserve of resources, out of which it’s very likely that this money is going to come,” Parrott said, talking about New York settlements reached with banks who are alleged to have committed mortgage securities and other financial fraud. “Although there wasn't anything said in the memorandum of understanding with [Empire State Development] and the state and the city that said where the capital monies are going to come from, my guess is it will come out of the reserve,” he said. Cuomo has indicated he does not need legislative approval for the capital grant, but legislators, especially those opposing the deal like Queens state Senator Michael Gianaris, are exploring all their options to block or change the deal.</p> <p>The Citizens Budget Commission was measured in its critique of the grant, comparing the reimbursement-style payments as better than upfront costs the state has taken on with, for instance, the <a href="https://www.nytimes.com/2018/07/02/nyregion/cuomo-buffalo-billion-ny-kaloyeros.html" target="_blank" rel="noopener">$750 million solar panel plant it built in Buffalo</a>. But CBC still criticized the <a href="https://www.politico.com/states/new-york/albany/story/2018/11/15/cuomo-administration-contradicts-itself-on-amazon-deal-approval-700871" target="_blank" rel="noopener">ongoing lack of oversight</a> for where the money would come from. The grant has also been criticized in <a href="https://nypost.com/2018/11/13/blame-unions-for-new-yorks-pricey-giveaway-to-amazon/" target="_blank" rel="noopener">multiple</a> <a href="https://www.bloomberg.com/opinion/articles/2018-11-15/amazon-s-hq2-costs-more-in-new-york-because-of-unions" target="_blank" rel="noopener">corners</a> as a sop to Cuomo-friendly construction unions, with critics charging the state is essentially paying Amazon to use union labor.</p> <p>And the subsidies also open New York up to the double whammy of even more companies asking for the kinds of tax breaks Amazon is set to receive while at the same time trying to provide services and pay for them in a state budget operating under the governor’s self-imposed 2 percent cap on annual spending increases.</p> <p>“It’s not a fiscally responsible way of running government,” Shaende said. “It could be potentially highly problematic for the state, because the state still relies on taxes. And we have the 2 percent spending growth cap, we have all sorts of measures that that the governor adopted to show that he's running a very fiscally responsible shop. He saves money, let's say, by cutting services, by finding efficiencies, in joint services between municipalities. So he saves, you know, a couple of nickels here a couple of dimes over there, and then he just splurges like this.”</p> <p><strong>Could this spur change?</strong><br /> As lawmakers scramble to find a way to stop or change Amazon’s incentive package, there’s at least some hope among reformers that the publicity surrounding the deal can lead to a change in how the state and city use tax incentives. The incentives all going towards one company has already brought more attention to the ways New York uses them than their use for the Hudson Yards development, Parrott said, despite the fact that “the total cost of the Hudson Yards tax breaks rival the amount of the city and state subsidy to Amazon.”</p> <p>The surrounding outrage may also give new life to the proposed subsidy tracker known as the “<a href="http://www.gothamgazette.com/opinion/7542-sunlight-for-subsidies" target="_blank" rel="noopener">Database of Deals</a>,” an idea that Reinvent Albany’s Alex Camarda pointed out “is not rocket science” in Assembly testimony for more accountability in the state’s economic development funds last year. It is a transparency measure Comptroller Tom DiNapoli has called for but Cuomo has opposed; it passed the Republican-led state Senate earlier this year, but was not given a vote in the Democrat-led Assembly.</p> <p>According to Shonede, the database not only could provide transparency to what’s going on in the state, but a better template for future spending.</p> <p>“As a community of experts, we need to stress some basic accountability, how many jobs we get per dollar spent, and what kind of jobs they are,” Shoende told Gotham Gazette. “And if we do that, in a consistent and serious way, a basic accounting of these efforts, it’s going to be obvious that the best way to improve the situation with income inequality, and lack of good jobs in vulnerable communities and improving the business climate have to do with what the traditional role of the government is supposed to be. And that is making sure that people are safe, that they are well prepared for the market, and that the infrastructure is such that it minimizes the business costs for the businesses that you see operate in the neighborhoods,” he said.</p> <p>And so in his own way, despite resisting intensive oversight of the state’s economic development initiatives, the governor may have inadvertently dragged the state’s subsidy programs further towards daylight. “This is kind of a like peeling the onion of Albany dysfunction and scurviness in a microcosm, this deal,” said Kaehny. “Because there's all this stuff baked in here that's been going on for a long time time. But it's like for the first time people in New York City were like ‘Oh s***,’ but reality is they've been doing this for many, many years.”</p> <p>

***
by Dave Colon, Gotham Gazette
     

Read more by this writer.

</p> <p>Note: this article has been updated with more clear description of Amazon's eligibility for ICAP.</p>
What's the [DATA] Point? 1981, New York's Property Tax System 2018-11-17T05:00:00+00:00 2018-11-17T05:00:00+00:00 http://www.gothamgazette.com/state/8081-what-s-the-data-point-1981 Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 59</strong><strong> - 1981 [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/tempsnip.png" alt="tempsnip" width="188" height="171" style="margin: 10px; float: left;" /></p> <p>The data point for today is 1981, the year in which the State Legislature enacted S7000A, the landmark bill that formalized the current property tax system for New York City. A response to the Hellerstein case, which found the system was in violation of State law, S7000A essentially codified the status quo.</p> <p>In doing so, it established a system of property classification, fractional assessments, caps, phase-ins, and class shares that is still with us 37 years later. These structural features and statutory requirements are the root of the system’s inequities and complexities. A home worth $500,000 can face the same tax bill as a home worth $1.5 million, while the value of a condominium unit, according to the City, is a fraction of its sale price. In fact, some buildings have values that are below the sale price of individual units. And commercial and rental property faces a higher average property tax burden than 1-, 2- and 3-family homes.</p> <p>These inequities and problems have led to repeated calls for reform, including pending litigation. This past May, Mayor de Blasio and Speaker Johnson formed the Advisory Commission on Property Tax Reform. In September, the Citizens Budget Commission, the Regional Plan Association, and NYC Robert Wagner School of Public Service held a panel to discuss the problem, inequities and potential reforms</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/531040065&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="180" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 59</strong><strong> - 1981 [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/tempsnip.png" alt="tempsnip" width="188" height="171" style="margin: 10px; float: left;" /></p> <p>The data point for today is 1981, the year in which the State Legislature enacted S7000A, the landmark bill that formalized the current property tax system for New York City. A response to the Hellerstein case, which found the system was in violation of State law, S7000A essentially codified the status quo.</p> <p>In doing so, it established a system of property classification, fractional assessments, caps, phase-ins, and class shares that is still with us 37 years later. These structural features and statutory requirements are the root of the system’s inequities and complexities. A home worth $500,000 can face the same tax bill as a home worth $1.5 million, while the value of a condominium unit, according to the City, is a fraction of its sale price. In fact, some buildings have values that are below the sale price of individual units. And commercial and rental property faces a higher average property tax burden than 1-, 2- and 3-family homes.</p> <p>These inequities and problems have led to repeated calls for reform, including pending litigation. This past May, Mayor de Blasio and Speaker Johnson formed the Advisory Commission on Property Tax Reform. In September, the Citizens Budget Commission, the Regional Plan Association, and NYC Robert Wagner School of Public Service held a panel to discuss the problem, inequities and potential reforms</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/531040065&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="180" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
What's the [DATA] Point? 3, with Cesar Perales, Charter Commission Chair 2018-11-01T04:00:00+00:00 2018-11-01T04:00:00+00:00 http://www.gothamgazette.com/city/8035-what-s-the-data-point-3-with-cesar-perales-charter-commission-chair Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 58</strong><strong> -- 3, Cesar Perales, chair of the mayor’s 2018 charter revision commission [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/cesarpic.jpg" alt="cesarpic" width="194" height="180" style="margin: 10px; float: left;" />Cesar Perales, chair of Mayor Bill de Blasio's 2018 Charter Revision Commission, joined the podcast to discuss the commission's work and the three ballot proposals it put forth that go before voters on Election Day: Tuesday, November 6, which deal with campaign finance reform, creating a civic engagement commission, and term limits for community board members, among other details.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/523308720&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="175" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 58</strong><strong> -- 3, Cesar Perales, chair of the mayor’s 2018 charter revision commission [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/cesarpic.jpg" alt="cesarpic" width="194" height="180" style="margin: 10px; float: left;" />Cesar Perales, chair of Mayor Bill de Blasio's 2018 Charter Revision Commission, joined the podcast to discuss the commission's work and the three ballot proposals it put forth that go before voters on Election Day: Tuesday, November 6, which deal with campaign finance reform, creating a civic engagement commission, and term limits for community board members, among other details.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/523308720&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="175" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
What's the [DATA] Point? 8, with David Friedfel and Patrick Orecki 2018-10-24T04:00:00+00:00 2018-10-24T04:00:00+00:00 http://www.gothamgazette.com/state/8016-what-s-the-data-point-8-with-david-friedfel-and-patrick-orecki Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 57</strong><strong> -- 8, David Friedfel and Patrick Orecki [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/andrew-marc.jpg" alt="andrew marc" width="277" height="139" style="margin: 10px; float: left;" />Citizens Budget Commission experts David Friedfel and Patrick Orecki joined the podcast to discuss their recent in-depth report on Governor Andrew Cuomo's two-term record and how the debate between Cuomo and Republican challenger Marc Molinaro touched (and didn't) on elements of that record.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/519374367&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="180" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 57</strong><strong> -- 8, David Friedfel and Patrick Orecki [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/andrew-marc.jpg" alt="andrew marc" width="277" height="139" style="margin: 10px; float: left;" />Citizens Budget Commission experts David Friedfel and Patrick Orecki joined the podcast to discuss their recent in-depth report on Governor Andrew Cuomo's two-term record and how the debate between Cuomo and Republican challenger Marc Molinaro touched (and didn't) on elements of that record.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/519374367&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="180" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
8 Steps to Fix New York Transit and Get New Yorkers Moving Again 2018-10-22T04:00:00+00:00 2018-10-22T04:00:00+00:00 http://www.gothamgazette.com/city/8008-8-steps-to-fix-new-york-transit-and-get-new-yorkers-moving-again Ben Max <p><img src="http://www.gothamgazette.com/images/36331224861_de0a0a4bc6_z.jpg" alt="Cuomo subway repairs" width="600" height="400" /></p> <p>Gov. Cuomo underground (photo: The Governor's Office)</p> <hr /> <p>With the transit system in New York City in constant crisis over a sustained period of time, from delayed trains underground to ever-dropping bus speeds on the streets, the question of how exactly to fix mass transit has been on the minds of elected and appointed officials, advocates and analysts, and, of course, frustrated commuters. In the aftermath of the short-term Subway Action Plan, the <a href="https://www.villagevoice.com/2018/07/24/we-cant-tell-if-the-subway-action-plan-worked-which-was-the-mtas-whole-idea/" target="_blank" rel="noopener">effectiveness of which was somewhat difficult to quantify</a> and apparently underwhelming, officials are trying to focus on how to provide more long-term physical and fiscal stability for the beleaguered Metropolitan Transportation Authority (MTA).</p> <p>While the ambitious plan to upgrade train signals, bus routes, and MTA spending practices that MTA New York City Transit president Andy Byford has called <a href="http://www.gothamgazette.com/opinion/7938-to-save-the-mta-push-fast-forward-ahead-quickly-and-responsibly" target="_blank">Fast Forward seems to be a universally agreed-on blueprint</a> to improve city transit, how the plan gets funded and implemented is somewhat more muddled thanks to political disagreements between state and city leaders.</p> <p>Governor Andrew Cuomo <a href="http://www.gothamgazette.com/state/7999-the-path-forward-for-cuomo-s-one-real-answer-congestion-pricing" target="_blank">has embraced congestion pricing</a>, a plan that would fund the MTA through tolls on vehicles entering Manhattan south of 60th Street, <a href="http://fixnyctransit.org/assets/pdf/fix-nyc-infographic.pdf" target="_blank" rel="noopener">what the Fix NYC panel</a> has determined should be the border of Manhattan’s central business district. Cuomo called the scheme -- which is aimed at both funding the MTA and reducing Manhattan roadway congestion -- an “<a href="https://www.nytimes.com/2017/08/13/nyregion/cuomo-rethinks-opposition-to-tolls-to-ease-manhattan-traffic.html" target="_blank" rel="noopener">idea whose time has come</a>” last year, but the only part of the proposal that was <a href="https://www.nytimes.com/2018/03/31/nyregion/congestion-pricing-new-york.html?rref=collection/sectioncollection/nyregion&amp;action=click&amp;contentCollection=nyregion&amp;region=stream&amp;module=stream_unit&amp;version=latest&amp;contentPlacement=5&amp;pgtype=sectionfront" target="_blank" rel="noopener">agreed upon by state leaders this year</a> was new fees on taxis and app-basd for-hire vehicles ($0.75 added to for-hire-vehicle carpool rides, $2.50 on taxi trips and $2.75 on FHV trips that go into Manhattan south of 96th Street), leaving the more difficult matter of adding a toll cordon in Manhattan to be dealt with later -- perhaps in the 2019 state budget, as Cuomo has indicated.</p> <p>Cuomo is also demanding the New York City “<a href="http://www.nystateofpolitics.com/2018/10/cuomo-with-li-dems-finds-common-ground-with-pledge/" target="_blank" rel="noopener">pay its fair share</a>” for any subway upgrades, an ask that <a href="https://www.politico.com/states/new-york/albany/story/2018/08/31/cuomo-continues-his-ping-pong-approach-to-subway-ownership-588765" target="_blank" rel="noopener">observers have called dubious</a> and one that seems wrapped up in his running feud with Mayor Bill de Blasio.</p> <p>For his part, de Blasio has resisted embracing congestion pricing, calling it “regressive” even in the face of data showing <a href="https://ny.curbed.com/2018/8/1/17631480/nyc-subway-transit-crisis-congestion-pricing-progressive" target="_blank" rel="noopener">car owners are wealthier than regular city transit riders</a>, and has instead pushed a millionaires tax as a way of providing the MTA a new revenue stream. The mayor’s resistance to congestion pricing has drawn criticism from subway advocates, who have put together <a href="https://ny.curbed.com/2018/10/2/17929588/nyc-transit-congestion-pricing-fix-subway-coalition" target="_blank" rel="noopener">an advocacy coalition</a> made up of anti-poverty and transit groups to push for the toll, and the millionaires tax is an idea Cuomo and <a href="http://www.nydailynews.com/news/politics/ny-pol-de-blasio-nixon-senate-democrats-cuomo-millionaire-tax-republicans-20180603-story.html" target="_blank" rel="noopener">even Democratic state Senators have dismissed</a> as not having much support in Albany. In recent months de Blasio <a href="https://nyc.streetsblog.org/2018/02/06/de-blasio-sounds-ready-to-negotiate-on-congestion-pricing/" target="_blank" rel="noopener">has appeared warmer to congestion pricing</a>, perhaps seeing the writing on the wall as it gains support and appears to be a top Cuomo priority for the new year, pending his own reelection.</p> <p>There’s also <a href="https://signalfail.com/how-to-fix-the-subways/" target="_blank" rel="noopener">a coalition of elected officials</a> who feel like the answer is to institute congestion pricing and the millionaires tax, in addition to reinstituting the commuter tax and getting the federal government to end the carried interest loophole. With the expected price for Fast Forward coming to close to $40 billion, these officials argue that neither congestion pricing nor a millionaires tax would provide the needed revenue for the MTA even when combined with contributions by the city and state.</p> <p>Along with the policy-makers themselves, New York’s other top transit minds, who often influence policy outcomes, continue to assess ways to improve the subway and bus systems. Asked by Gotham Gazette how city, state, and MTA leaders can make real improvements, experts outlined roughly eight key steps, ranging from instituting the much-discussed congestion pricing and Fast Forward plans to more ambitious proposals that would encourage the city and state to look at mass transit as an all-encompassing ecosystem instead of separate pieces that happen to operate under a single public authority.</p> <p><strong>1. Fast Forward</strong><br />The transit experts who spokes to Gotham Gazette pegged moving ahead with Fast Forward as an important next step in the life of the MTA. “The Regional Plan Association has long advocated for modernizing the signaling system in the subways, improving bus service, and making all stations ADA accessible, these are fundamental parts of Fast Forward,” said Kate Slevin, the senior vice president of programs and advocacy at RPA.</p> <p>Not only does the Fast Forward plan include the physical improvements that Slevin noted, but it signals to riders and employees at the agency that there could be a new way of doing things going forward. “The MTA finally has a big picture vision, which is important for aligning the priorities of the many projects and fixes that have to be done,” Liam Blank, the advocacy manager at the Tri-State Transportation Campaign told Gotham Gazette. “They've lacked that for a number of years, and as a result we've gotten hodgepodge improvements that don't really show benefits to a majority of commuters.”</p> <p>It’s the signal system upgrade at the heart of the plan, though, that Byford has suggested can be done on 11 line segments in 10 years, that could make the biggest difference according to Nicole Gelinas, a senior fellow at the Manhattan Institute with a focus on transit. “The single-biggest thing we need to do is get more people onto the trains more reliably, and you can't really do that with the signal system the way it is,” she said. “Even if [the signal upgrades] aren’t on the exact schedule the Fast Forward plan laid out, it's a high-priority, I think it's important,” Gelinas said, noting that the communications-based train control-equipped L train has on-time performances over 90 percent compared to averages of 60 percent performance across the rest of the system, which Gelinas, Byford, and everyone else paying attention wants upgraded to CBTC as quickly as possible.</p> <p><strong>2. Congestion Pricing</strong><br />Of course, implementing Fast Forward will require a large infusion of money for the MTA in order to get this work done. For revenue, and other reasons, transit experts peg congestion pricing as a necessary step to improve city mobility and livability. “There should be costs to bringing a large metal vehicle into the city,” Gelinas said, noting the effect that car traffic has on pedestrians walking around cars in crosswalks and cyclists having to dodge cars in bike lanes.</p> <p>Not only would congestion pricing compel drivers to pay what Blank called “their fare share” for using public infrastructure, it would also free up street space in Manhattan which helps improve bus speeds there. “Fewer cars on the road means that the buses can start to move at speeds comparable to other cities. Right now they're stuck in the same traffic as the rest of the cars, so we have a transit system that's ineffective down below and on the surface,” Blank said.</p> <p>And the need for it, according to Slevin of RPA, is almost impossible to overstate. “I can't stress enough how the key is congestion pricing to help us fix the subway, fix the buses, and provide the revenue for Fast Forward. And we have to get it done in 2019, we have to,” she said.</p> <p><strong>3. Control Costs</strong><br />Whether or not a new revenue source for the MTA comes to fruition, the authority must look at how it actually spends the money it has at its disposal, according to transit watchers. The good news, on that front, is that members of the MTA board have spoken up about cost-controls recently, including <a href="http://web.mta.info/mta/news/books/docs/Cost-Containment062018.pptx" target="_blank" rel="noopener">a well-received report by Scott Rechler</a> that laid out how the MTA could cut costs by reforming the agency’s bidding and project management processes.</p> <p>“I think the board has laid out some common sense changes to how the MTA does business that will make things more cost effective and done in a more timely manner,” Slevin said, about proposals like <a href="https://www.wsj.com/articles/mta-vows-to-cut-construction-costs-1529529382" target="_blank" rel="noopener">simplifying contracts and making it easier to change projects on the fly</a>. “But the leadership of the MTA and the whole agency has to be on board with implementing those changes and explain to the public how they're going about that.”</p> <p>Like with many governmental agencies and authorities, personnel costs loom large. A coming jump in employee healthcare costs to $2.6 billion in 2022, according to Gelinas, means the authority should take a look at those and other costs as a preparation to make a bigger ask. “I would like to see a full audit of every single cost. Not even start with cutting health benefits, but are there better ways to deliver this healthcare, look at the labor rules, really justify spending every dollar before you do congestion pricing and say, ‘Oh by the way we need more money too.’"</p> <p>There’s also an upcoming opportunity for the MTA and the Transportation Workers Union to find savings in staffing rules when they negotiate a contract in 2019, according to Jamison Dague, the director of infrastructure studies at the Citizens Budget Commission.</p> <p>“What you'd like to see is some coordination between management and labor to improve productivity,” Dague said. “Whether looking at some of the work rules and the staffing as far as how flexibly you can deploy certain workers for different types of tasks, or even when it comes to hiring, can you can be less specific in the types of job requirements.”</p> <p>Public-facing introspection could help make the case for more funding. “Byford could use a set of talking points on how the MTA is changing inside,” said Jon Orcutt, director of communications and advocacy at TransitCenter. “The line station managers are achieving X, we brought this project to a close under budget, we have our procurement process under review and will be instituting reforms by X month and so forth.”</p> <p>Part of the spending fix can be as simple as the MTA taking a more active role in buying work materials. “Contractors and subcontractors buy the materials like cement and steel,” Gelinas said. “You'd think it would make sense for the MTA to buy those because it's a much bigger purchaser on the world market, and then give them to the contractors. Materials procurement is very opaque and there's a lot of room for corruption and middle men and padding and all kinds of things there,” she said, but the process still flies under the radar and delays projects that are as simple as repairing some stairs.</p> <p><strong>4. Use Current Projects as Proof Points</strong><br />It’s also important for the MTA to prove they can actually improve the lives of New Yorkers, in order to build political support for the authority’s larger plans. The upcoming completion of the 7 train’s much-delayed CBTC signaling system is another opportunity for the MTA to show off what service improvements actually look like, while also explaining how other lines will be upgraded more efficiently, per Fast Forward.</p> <p>“[Andy Byford] needs to deliver on that, and he needs a huge communications push to show why it's gotten better,” Orcutt said. “It would be great for everyone in Queens and also the whole city to see, ‘We re-signaled a line and it's great. And if you want more of that on your subway you have to fund Fast Forward. Delivering something tangible is really key for them.”</p> <p>“The more the MTA can do to build its credibility in the near term will help with some of these longer term funding discussions,” said Slevin of RPA. “The L train shutdown is an opportunity to show you can get a big project done faster and cheaper by ripping off the Band-Aid and having a shorter period of time when there's more pain for riders,” she said, an especially salient point as Fast Forward fixes will <a href="https://nypost.com/2018/05/22/mta-plans-decade-of-hell-to-finally-fix-subways/" target="_blank" rel="noopener">most likely come with massive service disruptions</a>.</p> <p><strong>5. Remember the Buses</strong><br />There is one area where New York City government can exert more control on its own, advocates say, which is the bus system. “The city has [bus lane enforcement] cameras,” Orcutt said. “They can move them around, they can broadcast the fact that the cameras are out there more vigorously,” he said, and can also ask the NYPD to actually enforce the rules against driving and parking in bus lanes, a subject that Orcutt said the mayor “has been completely obtuse about.”</p> <p>And as budget season starts in 2019, Blank of Tri-State Transportation said the city and MTA should lobby state lawmakers for even more bus lane cameras, an improvement that advocates called for in a recent “<a href="http://busturnaround.nyc/wp-content/uploads/2018/07/BusTurnaroundAction-Plan.pdf" target="_blank" rel="noopener">Fast Bus, Fair City</a>” report. Blank also said the city should follow another one of the report’s recommendations and add 100 miles of bus lanes in the next five years, on top of the city’s existing 120 miles of lanes.</p> <p>Gelinas of the Manhattan Institute suggested a more radical redesign of the city’s streets if human-based enforcement didn’t speed the buses up. “The city can do more with the physical infrastructure itself, something like building out a curb so the traffic can't easily get into a bus lane. They do that in Paris, with reverse bus thoroughfares, so buses come in the opposite direction of traffic. So you'd have to be very stupid to go into that lane and be hit by a bus. When human enforcement of things like speeds and double parking doesn't work, use the physical environment to nudge people in the right direction,” she said.</p> <p><strong>6. Don’t Silo; See an Ecosystem</strong><br />Taking care of the bus system is part of an overall attitude shift that needs to happen, one that sees transit as one interconnected system instead of competing ways of getting around. “I think that for far too long transit has been seen in silos, and as a result it's created a disjointed transportation network that we have today, mainly in terms of how it functions,” Blank said. “Things don't have proper transfers, the investments are clearly unequal between the systems and especially between different neighborhoods. So we need to start seeing these things as complementary and operating like an ecosystem.”</p> <p>Taking care of the buses, in an example Slevin laid out, would make it that much easier to work on the subways during Fast Forward. “You have to make the bus system faster so you have a reliable alternative when you're fixing the subway,” Slevin said. “So if you have a bus system that functions better you can have longer term windows to work on the subway.” Slevin also gave an endorsement to Scott Stringer’s <a href="https://ny.curbed.com/2018/10/17/17989688/nyc-transportation-lirr-metro-north-reduced-fare" target="_blank" rel="noopener">new proposal to provide a single-ride ticket</a> for use among the subway, bus, and LIRR and Metro-North stations located in the city.</p> <p>A vision of interconnected transit can even extend to pieces of it outside of the MTA’s purview, according to Associate Director of NYU Rudin Center for Transportation Sarah Kaufman. “I imagine an app like Citymapper, which already integrates multiple modes seamlessly into its direction platform, also providing a payment option through pre-loaded funds. Perhaps 10 Citi Bike rides would lead to a free ride, or 20 subway trips earns the user a discount. During gridlock alert days, prices could surge on Ubers while remaining low on transit in order to modify New Yorkers' behavior,” she said.</p> <p>While New York isn’t set to completely phase out the MetroCard in favor of a contactless fare payment <a href="https://www.amny.com/transit/metrocard-fare-payment-1.19188463" target="_blank" rel="noopener">until 2023</a>, the city can look to places <a href="https://www.amny.com/news/mta-card-cubic-1.19179667" target="_blank" rel="noopener">like Chicago</a> where transit users can connect to the subway, buses, and bike share system with a single app..</p> <p><strong>7. Expansion’s Also a Must</strong><br />While the MTA has to make sure the trains and buses they actually have now are running effectively, there’s still a need to grow the transit system according to some experts.</p> <p>“I don't think we can afford to wait another 20 years to add three stops to the Second Avenue subway. We have to be doing [<a href="https://londonist.com/london/transport/everything-you-need-to-know-about-crossrail" target="_blank" rel="noopener">Crossrail-type</a>] of things here too if we want people to have a good quality of life. I don't think it's too ambitious,” Gelinas said in response to the question of whether the MTA should have to choose between bringing the subway system up to good repair or expanding it.</p> <p>Slevin at the RPA made the case that the MTA should study expansion now, since it typically takes so long to get a huge new project off the ground. “It takes many years to build new transit lines so the MTA could start studying the Triboro now, and then be ready to build once resources become available,” she said, making the case for the <a href="http://library.rpa.org/interactive/the-triboro/" target="_blank" rel="noopener">Brooklyn/Queens/Bronx line that the RPA has endorsed</a> and which would largely run on existing &nbsp;little-used, above-ground railroad tracks, thus requiring significantly less construction than another new subway line, while also providing much needed access between boroughs that doesn’t rely on trips into Manhattan.</p> <p>“Part of the reason we are in the transit mess we are in now is because we failed to invest in the system, modernize it, and build new lines to meet growing demand. We can’t make that mistake again,” said Slevin, also <a href="http://fourthplan.org/action/new-subways" target="_blank" rel="noopener">arguing for expansions</a> like the Utica Avenue line in Brooklyn, building the Q into the Bronx, and a Jewel Avenue line in central Queens, all subway extensions into dense, transit-starved neighborhoods.</p> <p>Gelinas echoed Slevin’s argument that a current lack of real planning could doom the city down the road. “We should be able to do two things at once, and if we can't, we're really harming the future of the city.</p> <p><strong>8. Communication is Key</strong><br />As any perusal of Twitter will show you during a morning commute meltdown, transit riders are almost as annoyed by a lack of information about delays and trains getting rerouted as they are by travel disruptions themselves. Beyond confusing and irritating commuters, a lack of communication saps enthusiasm for proposals that would improve the system. “People understand when there's a real problem, but what they hate is not getting straight talk about it,” said Orcutt of TransitCenter. “If people don't feel like the MTA is levelling with them, it's much harder to get them to rally around more funding,” he explained.</p> <p>“Multiple studies have shown that passengers mostly trust the transit agency when they are provided real-time information -- even when it's bad news,” Kaufman told Gotham Gazette. “The information gives the perception of control over the system, whereas only sharing the word ‘delay’ does not.” Kaufman recommended the agency lean on specifics when telling riders why their train is delayed, especially since clearly communicating something like a signal failure could encourage riders to lean on elected officials to focus more on the issue of signal replacement.</p> <p>“[Communication] should just be a management thing. You don't need new anything for that, you just run it well and have somebody in charge,” Orcutt said. It’s a step the agency has made some movement on, hiring Sarah Meyer <a href="http://www.nydailynews.com/new-york/new-mta-chief-customer-officer-tackles-communication-issues-article-1.3871233" target="_blank" rel="noopener">as the agency’s chief customer officer</a>, but the effort at clear, timely, and focused communication <a href="https://ny.curbed.com/2018/7/30/17632214/mta-nyc-subway-communication-fast-forward" target="_blank" rel="noopener">is obviously still dogging the MTA</a> with the occasional management failure and <a href="https://www.amny.com/transit/subway-countdown-clock-complaints-1.15351692" target="_blank" rel="noopener">inaccurate countdown clock and website information</a>.</p> <p>While improving the way the MTA shares real-time problems plaguing the subway system won’t actually fix those problems the way other solutions can, it will at least help with the perception of screaming, or tweeting, into a bureaucratic void when something goes wrong.</p> <p>

***
by Dave Colon, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/36331224861_de0a0a4bc6_z.jpg" alt="Cuomo subway repairs" width="600" height="400" /></p> <p>Gov. Cuomo underground (photo: The Governor's Office)</p> <hr /> <p>With the transit system in New York City in constant crisis over a sustained period of time, from delayed trains underground to ever-dropping bus speeds on the streets, the question of how exactly to fix mass transit has been on the minds of elected and appointed officials, advocates and analysts, and, of course, frustrated commuters. In the aftermath of the short-term Subway Action Plan, the <a href="https://www.villagevoice.com/2018/07/24/we-cant-tell-if-the-subway-action-plan-worked-which-was-the-mtas-whole-idea/" target="_blank" rel="noopener">effectiveness of which was somewhat difficult to quantify</a> and apparently underwhelming, officials are trying to focus on how to provide more long-term physical and fiscal stability for the beleaguered Metropolitan Transportation Authority (MTA).</p> <p>While the ambitious plan to upgrade train signals, bus routes, and MTA spending practices that MTA New York City Transit president Andy Byford has called <a href="http://www.gothamgazette.com/opinion/7938-to-save-the-mta-push-fast-forward-ahead-quickly-and-responsibly" target="_blank">Fast Forward seems to be a universally agreed-on blueprint</a> to improve city transit, how the plan gets funded and implemented is somewhat more muddled thanks to political disagreements between state and city leaders.</p> <p>Governor Andrew Cuomo <a href="http://www.gothamgazette.com/state/7999-the-path-forward-for-cuomo-s-one-real-answer-congestion-pricing" target="_blank">has embraced congestion pricing</a>, a plan that would fund the MTA through tolls on vehicles entering Manhattan south of 60th Street, <a href="http://fixnyctransit.org/assets/pdf/fix-nyc-infographic.pdf" target="_blank" rel="noopener">what the Fix NYC panel</a> has determined should be the border of Manhattan’s central business district. Cuomo called the scheme -- which is aimed at both funding the MTA and reducing Manhattan roadway congestion -- an “<a href="https://www.nytimes.com/2017/08/13/nyregion/cuomo-rethinks-opposition-to-tolls-to-ease-manhattan-traffic.html" target="_blank" rel="noopener">idea whose time has come</a>” last year, but the only part of the proposal that was <a href="https://www.nytimes.com/2018/03/31/nyregion/congestion-pricing-new-york.html?rref=collection/sectioncollection/nyregion&amp;action=click&amp;contentCollection=nyregion&amp;region=stream&amp;module=stream_unit&amp;version=latest&amp;contentPlacement=5&amp;pgtype=sectionfront" target="_blank" rel="noopener">agreed upon by state leaders this year</a> was new fees on taxis and app-basd for-hire vehicles ($0.75 added to for-hire-vehicle carpool rides, $2.50 on taxi trips and $2.75 on FHV trips that go into Manhattan south of 96th Street), leaving the more difficult matter of adding a toll cordon in Manhattan to be dealt with later -- perhaps in the 2019 state budget, as Cuomo has indicated.</p> <p>Cuomo is also demanding the New York City “<a href="http://www.nystateofpolitics.com/2018/10/cuomo-with-li-dems-finds-common-ground-with-pledge/" target="_blank" rel="noopener">pay its fair share</a>” for any subway upgrades, an ask that <a href="https://www.politico.com/states/new-york/albany/story/2018/08/31/cuomo-continues-his-ping-pong-approach-to-subway-ownership-588765" target="_blank" rel="noopener">observers have called dubious</a> and one that seems wrapped up in his running feud with Mayor Bill de Blasio.</p> <p>For his part, de Blasio has resisted embracing congestion pricing, calling it “regressive” even in the face of data showing <a href="https://ny.curbed.com/2018/8/1/17631480/nyc-subway-transit-crisis-congestion-pricing-progressive" target="_blank" rel="noopener">car owners are wealthier than regular city transit riders</a>, and has instead pushed a millionaires tax as a way of providing the MTA a new revenue stream. The mayor’s resistance to congestion pricing has drawn criticism from subway advocates, who have put together <a href="https://ny.curbed.com/2018/10/2/17929588/nyc-transit-congestion-pricing-fix-subway-coalition" target="_blank" rel="noopener">an advocacy coalition</a> made up of anti-poverty and transit groups to push for the toll, and the millionaires tax is an idea Cuomo and <a href="http://www.nydailynews.com/news/politics/ny-pol-de-blasio-nixon-senate-democrats-cuomo-millionaire-tax-republicans-20180603-story.html" target="_blank" rel="noopener">even Democratic state Senators have dismissed</a> as not having much support in Albany. In recent months de Blasio <a href="https://nyc.streetsblog.org/2018/02/06/de-blasio-sounds-ready-to-negotiate-on-congestion-pricing/" target="_blank" rel="noopener">has appeared warmer to congestion pricing</a>, perhaps seeing the writing on the wall as it gains support and appears to be a top Cuomo priority for the new year, pending his own reelection.</p> <p>There’s also <a href="https://signalfail.com/how-to-fix-the-subways/" target="_blank" rel="noopener">a coalition of elected officials</a> who feel like the answer is to institute congestion pricing and the millionaires tax, in addition to reinstituting the commuter tax and getting the federal government to end the carried interest loophole. With the expected price for Fast Forward coming to close to $40 billion, these officials argue that neither congestion pricing nor a millionaires tax would provide the needed revenue for the MTA even when combined with contributions by the city and state.</p> <p>Along with the policy-makers themselves, New York’s other top transit minds, who often influence policy outcomes, continue to assess ways to improve the subway and bus systems. Asked by Gotham Gazette how city, state, and MTA leaders can make real improvements, experts outlined roughly eight key steps, ranging from instituting the much-discussed congestion pricing and Fast Forward plans to more ambitious proposals that would encourage the city and state to look at mass transit as an all-encompassing ecosystem instead of separate pieces that happen to operate under a single public authority.</p> <p><strong>1. Fast Forward</strong><br />The transit experts who spokes to Gotham Gazette pegged moving ahead with Fast Forward as an important next step in the life of the MTA. “The Regional Plan Association has long advocated for modernizing the signaling system in the subways, improving bus service, and making all stations ADA accessible, these are fundamental parts of Fast Forward,” said Kate Slevin, the senior vice president of programs and advocacy at RPA.</p> <p>Not only does the Fast Forward plan include the physical improvements that Slevin noted, but it signals to riders and employees at the agency that there could be a new way of doing things going forward. “The MTA finally has a big picture vision, which is important for aligning the priorities of the many projects and fixes that have to be done,” Liam Blank, the advocacy manager at the Tri-State Transportation Campaign told Gotham Gazette. “They've lacked that for a number of years, and as a result we've gotten hodgepodge improvements that don't really show benefits to a majority of commuters.”</p> <p>It’s the signal system upgrade at the heart of the plan, though, that Byford has suggested can be done on 11 line segments in 10 years, that could make the biggest difference according to Nicole Gelinas, a senior fellow at the Manhattan Institute with a focus on transit. “The single-biggest thing we need to do is get more people onto the trains more reliably, and you can't really do that with the signal system the way it is,” she said. “Even if [the signal upgrades] aren’t on the exact schedule the Fast Forward plan laid out, it's a high-priority, I think it's important,” Gelinas said, noting that the communications-based train control-equipped L train has on-time performances over 90 percent compared to averages of 60 percent performance across the rest of the system, which Gelinas, Byford, and everyone else paying attention wants upgraded to CBTC as quickly as possible.</p> <p><strong>2. Congestion Pricing</strong><br />Of course, implementing Fast Forward will require a large infusion of money for the MTA in order to get this work done. For revenue, and other reasons, transit experts peg congestion pricing as a necessary step to improve city mobility and livability. “There should be costs to bringing a large metal vehicle into the city,” Gelinas said, noting the effect that car traffic has on pedestrians walking around cars in crosswalks and cyclists having to dodge cars in bike lanes.</p> <p>Not only would congestion pricing compel drivers to pay what Blank called “their fare share” for using public infrastructure, it would also free up street space in Manhattan which helps improve bus speeds there. “Fewer cars on the road means that the buses can start to move at speeds comparable to other cities. Right now they're stuck in the same traffic as the rest of the cars, so we have a transit system that's ineffective down below and on the surface,” Blank said.</p> <p>And the need for it, according to Slevin of RPA, is almost impossible to overstate. “I can't stress enough how the key is congestion pricing to help us fix the subway, fix the buses, and provide the revenue for Fast Forward. And we have to get it done in 2019, we have to,” she said.</p> <p><strong>3. Control Costs</strong><br />Whether or not a new revenue source for the MTA comes to fruition, the authority must look at how it actually spends the money it has at its disposal, according to transit watchers. The good news, on that front, is that members of the MTA board have spoken up about cost-controls recently, including <a href="http://web.mta.info/mta/news/books/docs/Cost-Containment062018.pptx" target="_blank" rel="noopener">a well-received report by Scott Rechler</a> that laid out how the MTA could cut costs by reforming the agency’s bidding and project management processes.</p> <p>“I think the board has laid out some common sense changes to how the MTA does business that will make things more cost effective and done in a more timely manner,” Slevin said, about proposals like <a href="https://www.wsj.com/articles/mta-vows-to-cut-construction-costs-1529529382" target="_blank" rel="noopener">simplifying contracts and making it easier to change projects on the fly</a>. “But the leadership of the MTA and the whole agency has to be on board with implementing those changes and explain to the public how they're going about that.”</p> <p>Like with many governmental agencies and authorities, personnel costs loom large. A coming jump in employee healthcare costs to $2.6 billion in 2022, according to Gelinas, means the authority should take a look at those and other costs as a preparation to make a bigger ask. “I would like to see a full audit of every single cost. Not even start with cutting health benefits, but are there better ways to deliver this healthcare, look at the labor rules, really justify spending every dollar before you do congestion pricing and say, ‘Oh by the way we need more money too.’"</p> <p>There’s also an upcoming opportunity for the MTA and the Transportation Workers Union to find savings in staffing rules when they negotiate a contract in 2019, according to Jamison Dague, the director of infrastructure studies at the Citizens Budget Commission.</p> <p>“What you'd like to see is some coordination between management and labor to improve productivity,” Dague said. “Whether looking at some of the work rules and the staffing as far as how flexibly you can deploy certain workers for different types of tasks, or even when it comes to hiring, can you can be less specific in the types of job requirements.”</p> <p>Public-facing introspection could help make the case for more funding. “Byford could use a set of talking points on how the MTA is changing inside,” said Jon Orcutt, director of communications and advocacy at TransitCenter. “The line station managers are achieving X, we brought this project to a close under budget, we have our procurement process under review and will be instituting reforms by X month and so forth.”</p> <p>Part of the spending fix can be as simple as the MTA taking a more active role in buying work materials. “Contractors and subcontractors buy the materials like cement and steel,” Gelinas said. “You'd think it would make sense for the MTA to buy those because it's a much bigger purchaser on the world market, and then give them to the contractors. Materials procurement is very opaque and there's a lot of room for corruption and middle men and padding and all kinds of things there,” she said, but the process still flies under the radar and delays projects that are as simple as repairing some stairs.</p> <p><strong>4. Use Current Projects as Proof Points</strong><br />It’s also important for the MTA to prove they can actually improve the lives of New Yorkers, in order to build political support for the authority’s larger plans. The upcoming completion of the 7 train’s much-delayed CBTC signaling system is another opportunity for the MTA to show off what service improvements actually look like, while also explaining how other lines will be upgraded more efficiently, per Fast Forward.</p> <p>“[Andy Byford] needs to deliver on that, and he needs a huge communications push to show why it's gotten better,” Orcutt said. “It would be great for everyone in Queens and also the whole city to see, ‘We re-signaled a line and it's great. And if you want more of that on your subway you have to fund Fast Forward. Delivering something tangible is really key for them.”</p> <p>“The more the MTA can do to build its credibility in the near term will help with some of these longer term funding discussions,” said Slevin of RPA. “The L train shutdown is an opportunity to show you can get a big project done faster and cheaper by ripping off the Band-Aid and having a shorter period of time when there's more pain for riders,” she said, an especially salient point as Fast Forward fixes will <a href="https://nypost.com/2018/05/22/mta-plans-decade-of-hell-to-finally-fix-subways/" target="_blank" rel="noopener">most likely come with massive service disruptions</a>.</p> <p><strong>5. Remember the Buses</strong><br />There is one area where New York City government can exert more control on its own, advocates say, which is the bus system. “The city has [bus lane enforcement] cameras,” Orcutt said. “They can move them around, they can broadcast the fact that the cameras are out there more vigorously,” he said, and can also ask the NYPD to actually enforce the rules against driving and parking in bus lanes, a subject that Orcutt said the mayor “has been completely obtuse about.”</p> <p>And as budget season starts in 2019, Blank of Tri-State Transportation said the city and MTA should lobby state lawmakers for even more bus lane cameras, an improvement that advocates called for in a recent “<a href="http://busturnaround.nyc/wp-content/uploads/2018/07/BusTurnaroundAction-Plan.pdf" target="_blank" rel="noopener">Fast Bus, Fair City</a>” report. Blank also said the city should follow another one of the report’s recommendations and add 100 miles of bus lanes in the next five years, on top of the city’s existing 120 miles of lanes.</p> <p>Gelinas of the Manhattan Institute suggested a more radical redesign of the city’s streets if human-based enforcement didn’t speed the buses up. “The city can do more with the physical infrastructure itself, something like building out a curb so the traffic can't easily get into a bus lane. They do that in Paris, with reverse bus thoroughfares, so buses come in the opposite direction of traffic. So you'd have to be very stupid to go into that lane and be hit by a bus. When human enforcement of things like speeds and double parking doesn't work, use the physical environment to nudge people in the right direction,” she said.</p> <p><strong>6. Don’t Silo; See an Ecosystem</strong><br />Taking care of the bus system is part of an overall attitude shift that needs to happen, one that sees transit as one interconnected system instead of competing ways of getting around. “I think that for far too long transit has been seen in silos, and as a result it's created a disjointed transportation network that we have today, mainly in terms of how it functions,” Blank said. “Things don't have proper transfers, the investments are clearly unequal between the systems and especially between different neighborhoods. So we need to start seeing these things as complementary and operating like an ecosystem.”</p> <p>Taking care of the buses, in an example Slevin laid out, would make it that much easier to work on the subways during Fast Forward. “You have to make the bus system faster so you have a reliable alternative when you're fixing the subway,” Slevin said. “So if you have a bus system that functions better you can have longer term windows to work on the subway.” Slevin also gave an endorsement to Scott Stringer’s <a href="https://ny.curbed.com/2018/10/17/17989688/nyc-transportation-lirr-metro-north-reduced-fare" target="_blank" rel="noopener">new proposal to provide a single-ride ticket</a> for use among the subway, bus, and LIRR and Metro-North stations located in the city.</p> <p>A vision of interconnected transit can even extend to pieces of it outside of the MTA’s purview, according to Associate Director of NYU Rudin Center for Transportation Sarah Kaufman. “I imagine an app like Citymapper, which already integrates multiple modes seamlessly into its direction platform, also providing a payment option through pre-loaded funds. Perhaps 10 Citi Bike rides would lead to a free ride, or 20 subway trips earns the user a discount. During gridlock alert days, prices could surge on Ubers while remaining low on transit in order to modify New Yorkers' behavior,” she said.</p> <p>While New York isn’t set to completely phase out the MetroCard in favor of a contactless fare payment <a href="https://www.amny.com/transit/metrocard-fare-payment-1.19188463" target="_blank" rel="noopener">until 2023</a>, the city can look to places <a href="https://www.amny.com/news/mta-card-cubic-1.19179667" target="_blank" rel="noopener">like Chicago</a> where transit users can connect to the subway, buses, and bike share system with a single app..</p> <p><strong>7. Expansion’s Also a Must</strong><br />While the MTA has to make sure the trains and buses they actually have now are running effectively, there’s still a need to grow the transit system according to some experts.</p> <p>“I don't think we can afford to wait another 20 years to add three stops to the Second Avenue subway. We have to be doing [<a href="https://londonist.com/london/transport/everything-you-need-to-know-about-crossrail" target="_blank" rel="noopener">Crossrail-type</a>] of things here too if we want people to have a good quality of life. I don't think it's too ambitious,” Gelinas said in response to the question of whether the MTA should have to choose between bringing the subway system up to good repair or expanding it.</p> <p>Slevin at the RPA made the case that the MTA should study expansion now, since it typically takes so long to get a huge new project off the ground. “It takes many years to build new transit lines so the MTA could start studying the Triboro now, and then be ready to build once resources become available,” she said, making the case for the <a href="http://library.rpa.org/interactive/the-triboro/" target="_blank" rel="noopener">Brooklyn/Queens/Bronx line that the RPA has endorsed</a> and which would largely run on existing &nbsp;little-used, above-ground railroad tracks, thus requiring significantly less construction than another new subway line, while also providing much needed access between boroughs that doesn’t rely on trips into Manhattan.</p> <p>“Part of the reason we are in the transit mess we are in now is because we failed to invest in the system, modernize it, and build new lines to meet growing demand. We can’t make that mistake again,” said Slevin, also <a href="http://fourthplan.org/action/new-subways" target="_blank" rel="noopener">arguing for expansions</a> like the Utica Avenue line in Brooklyn, building the Q into the Bronx, and a Jewel Avenue line in central Queens, all subway extensions into dense, transit-starved neighborhoods.</p> <p>Gelinas echoed Slevin’s argument that a current lack of real planning could doom the city down the road. “We should be able to do two things at once, and if we can't, we're really harming the future of the city.</p> <p><strong>8. Communication is Key</strong><br />As any perusal of Twitter will show you during a morning commute meltdown, transit riders are almost as annoyed by a lack of information about delays and trains getting rerouted as they are by travel disruptions themselves. Beyond confusing and irritating commuters, a lack of communication saps enthusiasm for proposals that would improve the system. “People understand when there's a real problem, but what they hate is not getting straight talk about it,” said Orcutt of TransitCenter. “If people don't feel like the MTA is levelling with them, it's much harder to get them to rally around more funding,” he explained.</p> <p>“Multiple studies have shown that passengers mostly trust the transit agency when they are provided real-time information -- even when it's bad news,” Kaufman told Gotham Gazette. “The information gives the perception of control over the system, whereas only sharing the word ‘delay’ does not.” Kaufman recommended the agency lean on specifics when telling riders why their train is delayed, especially since clearly communicating something like a signal failure could encourage riders to lean on elected officials to focus more on the issue of signal replacement.</p> <p>“[Communication] should just be a management thing. You don't need new anything for that, you just run it well and have somebody in charge,” Orcutt said. It’s a step the agency has made some movement on, hiring Sarah Meyer <a href="http://www.nydailynews.com/new-york/new-mta-chief-customer-officer-tackles-communication-issues-article-1.3871233" target="_blank" rel="noopener">as the agency’s chief customer officer</a>, but the effort at clear, timely, and focused communication <a href="https://ny.curbed.com/2018/7/30/17632214/mta-nyc-subway-communication-fast-forward" target="_blank" rel="noopener">is obviously still dogging the MTA</a> with the occasional management failure and <a href="https://www.amny.com/transit/subway-countdown-clock-complaints-1.15351692" target="_blank" rel="noopener">inaccurate countdown clock and website information</a>.</p> <p>While improving the way the MTA shares real-time problems plaguing the subway system won’t actually fix those problems the way other solutions can, it will at least help with the perception of screaming, or tweeting, into a bureaucratic void when something goes wrong.</p> <p>

***
by Dave Colon, Gotham Gazette
     

Read more by this writer.

</p>
What's The [Data] Point? 90%, with NYCHA Interim Chair Stan Brezenoff 2018-10-19T04:00:00+00:00 2018-10-19T04:00:00+00:00 http://www.gothamgazette.com/city/8005-what-s-the-data-point-90-with-nycha-interim-chair-stan-brezenoff Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 56</strong><strong> -- 90%, with NYCHA Interim Chair Stan Brezenoff [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/sb_headshot.png" alt="Stan Brezenoff" width="160" height="162" style="margin-right: 10px; float: left;" /></p> <p>90% is the share of NYCHA units CBC estimates may not be cost effect to repair by 2027 under the current trajectory of deterioration. NYCHA Interim Chair and CEO Stan Brezenoff joined CBC to discuss the policy and funding challenges facing NYCHA, and how he plans to tackle key areas in desperate need of improvement.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/516735492&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="170" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The [Data] Point? Episode 56</strong><strong> -- 90%, with NYCHA Interim Chair Stan Brezenoff [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]</strong></p> <p><img src="http://www.gothamgazette.com/images/graphics/2018/podcast18/sb_headshot.png" alt="Stan Brezenoff" width="160" height="162" style="margin-right: 10px; float: left;" /></p> <p>90% is the share of NYCHA units CBC estimates may not be cost effect to repair by 2027 under the current trajectory of deterioration. NYCHA Interim Chair and CEO Stan Brezenoff joined CBC to discuss the policy and funding challenges facing NYCHA, and how he plans to tackle key areas in desperate need of improvement.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax" target="_blank" rel="noopener noreferrer">@TweetBenMax</a>), Maria Doulis of CBC (<a href="https://twitter.com/MariaDoulis" target="_blank" rel="noopener">@MariaDoulis</a>). Listen below or download wherever you get your podcasts!</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/516735492&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true" width="100%" height="170" frameborder="no" scrolling="no"></iframe></p> <p>

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

</p>