Gotham Gazette http://www.gothamgazette.com/component/tags/tag/500 Sun, 24 Mar 2019 01:20:10 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) City’s Flawed Capital Project Process the Subject of Renewed Scrutiny, and Some Reform http://www.gothamgazette.com/city/8381-city-s-flawed-capital-project-process-the-subject-of-renewed-scrutiny-and-some-reform http://www.gothamgazette.com/city/8381-city-s-flawed-capital-project-process-the-subject-of-renewed-scrutiny-and-some-reform mayor bdb 200

(photo: Edwin J. Torres/Mayoral Photo Office)


Many New Yorkers know the city has trouble completing construction projects on time and under budget. Projects like school renovations and the build-out of park facilities are capital projects, the subject of increasing scrutiny and some reform, with more promised, as frustrations persist and residents, watchdogs, lawmakers, and other city leaders seek answers.

Top officials from the administration of Mayor Bill de Blasio to City Council Speaker Corey Johnson to Comptroller Scott Stringer have taken a fresh interest in improving the capital projects budgeting and delivery processes. The mayor’s office has released several plans promising to do just that. After forming a new subcommittee on the capital budget last year, the City Council has proposed reforms and Council members have been critical of the city’s handling of capital spending during this month’s annual budget hearings.

Stringer has proposed three city charter revisions to improve accountability, recommendations to a charter revision commission that will soon propose changes to the city’s central governing document.

There are some areas of agreement among the parties involved, but it is currently unclear if there will be any major substantive changes to the current system, wherein the city’s long-term capital budget planning is lacking in transparency and widely seen as unrealistic, and projects are consistently falling behind schedule and over budget.

Much of the recent attention has come through this year’s city budget process. As part of the reviewing the preliminary expense budget put forward by Mayor de Blasio, the City Council also assesses the preliminary capital budget for next fiscal year as well as the ten-year capital strategy.

At the first preliminary budget hearing of this cycle, Melanie Hartzog, the city’s budget director, said that the top priorities for capital projects over the next decade would be education, environmental protection, housing, and transportation.

In two recent hearings and several recently-released plans, city officials have promised to address many of the long-standing issues associated with capital project delivery, including planning, process, and transparency.

“We have doubts,” said Council Speaker Corey Johnson, a Manhattan Democrat, at the Council’s initial budget hearing. Johnson and other Council members raised several issues about the capital budget and the ten-year plan. He said that the latter half of the ten-year plan “does not take into account the city’s needs,” including both its current commitments and new needs that will arise.

Multiple Council members brought up that the ten-year plan does not include any new school construction after fiscal year 2024. Council Member Vanessa Gibson, a Bronx Democrat and chair of the capital budget subcommittee, called this “unrealistic planning” and noted the city’s history of frontloading its ten-year capital plans.

Gibson specifically cited the budget planning for the NYPD’s capital needs. The current proposal allocates $850 million in capital spending for the first three years of the plan, and only $160 million in the next seven. Hartzog acknowledged the history and said that the city is working to improve. Council members did acknowledge some progress in clarity for what is outlined.

In addition to problems with planning, capital delivery from conception to completion has its own set of obstacles. Recognizing the past-due and over-budget trend, the city’s Department of Design and Construction earlier this year released a strategic blueprint that promises to “fundamentally reevaluate the status quo in City capital project delivery.”

As of the time of the report’s release, DDC was managing 834 active projects valued at $13.5 billion. Since 2004, the annual capital budget has grown by $1 billion to $3 billion each year to keep pace with a growing city, which has also added nearly a million jobs in the same period. DDC deals with most city capital projects outside of the School Construction Authority, which is its own entity dealing with its eponymous subject matter. SCA is known to be far more successful in its planning and delivery than DDC.

The blueprint identifies three internal and external impediments within the delivery process, including DDC’s own business practices, burdensome procurement process rules, and the engineering challenges that come with underground infrastructure that “all complicate efficient delivery of capital projects” in the city.

The report also identifies climate change as a necessary factor to consider in all future planning. Capital projects need to both protect the city from rising sea levels and natural disasters as well as minimize the city’s contributions to global warming, according to the report. The agency is under relatively new leadership as it embarks on this ambitious plan. Mayor Bill de Blasio appointed Lorraine Grillo, who has also continued leading the School Construction Authority, as the new DDC commissioner last July. Grillo has been widely praised for her leadership of SCA, including by City Council members, though the city continues to struggle with school space in many neighborhoods.

DDC is currently undergoing an agency-wide review of its practices and external challenges. Through this review, DDC promises to “modernize how we do business.” These modernizing reforms include standardizing project initiation, managing projects more effectively, enhancing management capacity, and updating internal systems and technology. The plan promises to better identify and prioritize needs, streamline procurement, and restructure contracts to promote meeting deadlines, among other improvements.

Contracts and contractor diversity are also a primary concern for the mayor’s office and the Council, they say. DDC wants to get more out of its contracts and diversify and expand the pool of applicants. Daniel Steinberg, the Senior Advisor to the Mayor’s Office of Operations, said that many minority- and women-owned business do not apply for contracts because of the city’s history of untimely payments. This can also dissuade newer and smaller businesses from participating in the bidding process. Timely payment of contracts is a larger issue that DDC is also seeking to address.

During a February joint hearing, the City Council’s finance committee and capital budget subcommittee considered two bills that aim to improve transparency in the capital projects process.

The City Charter mandates certain reporting on the process to the Council and the public, but Council Member Gibson said these reports “often do not relate to one another or the city’s real spending in a meaningful way.” The two bills, which had the support of the Council members present at the hearing, are intended to address these issues. Gibson said that the proposals would give the Council and public “a wholistic and detailed look at all capital projects that are in progress throughout the city.”

The first, Intro. 32, sponsored by Council Member Andrew Cohen, a Bronx Democrat, would require city agencies to provide electronic notification of any delays or cost changes for capital projects. This is very similar to one of the charter revisions that Comptroller Stringer is proposing. The second, Intro. 113, sponsored by Council Member Brad Lander, a Brooklyn Democrat, would create a database to track citywide capital projects. Finance committee chair Daniel Dromm, a Queens Democrat, said that “transparency in the capital process is key to providing assurances to the public that city resources are being put into good use in an efficient and effective manner.”

While most of the hearing focused on these two bills, it was clear that the Council members had larger issues in mind and thought of the bills as first steps to larger-scale reform and improvements.

Steinberg, of the Mayor’s Office of Operations, said during the hearing that his office agreed with the two bills “in spirit,” but was concerned with components of each bill that he would consider to be “impractical.”

He voiced concern that Intro. 32 would require reporting for all capital projects, which includes everything from equipment acquisition (such as of paper shredders) to building or repairing massive water tunnels. In regards to Intro. 113, he said that it “would be incredibly burdensome to implement while providing little new information.”

Intro. 32 currently has ten Council sponsors, while Intro. 113 has 35 sponsors, well above the threshold required for passage in the 51-seat Council.

Nonprofit watchdog Citizens Budget Commission submitted testimony in support of Intro. 113 at the February hearing, saying that “the capital budget is just as important as the operating budget and should be subject to the same monitoring and scrutiny.” Gibson brought up the bills again at the initial preliminary budget hearing.

The two bills are focused on transparency in the capital projects process, but the sponsors and other Council members also contextualized the proposals as necessary for the eventual improvement of the entire system and not a distinct issue of bureaucratic transparency. During the hearing, Cohen said that “the inability of the city to deliver on capital projects is an epidemic.”

Council members frequently expressed their personal frustration with the process and the length it takes for many capital projects to be completed, some spanning multiple Council member terms. Cohen, who is in his second term, said that he “spends a significant amount of my time on projects that were funded by my predecessor.” Gibson similarly expressed frustration over parks projects commonly taking as long as eight years to complete, which presents an oversight challenge to Council members, who are term-limited to eight years in office over two terms.

A source of frustration for Council members was that only capital projects costing $25 million or more are required to be reported on the capital projects dashboard, a publicly-available transparency tool on the city’s website. Capital projects of that size account for only 300 of the over 10,000 ongoing projects for a year. Steinberg said that the Mayor’s Office of Operations would be open to expanding the scope of the dashboard’s reporting to be more inclusive than the current threshold. After learning that the city does not have an employee assigned specifically to data entry for the dashboard, Gibson said that it was evidence that capital projects transparency “is not a priority in this city.”

Another area of agreement between the Council and Comptroller is the need for individual budget line items for each capital project. This proposal was one of Stringer’s suggested charter revisions and Gibson brought it up at both recent Council hearings pertaining to the capital budget. Stringer is also proposing that the city regularly report on the condition of capital assets, a requirement he wants added to the charter.

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by Andrew Millman, Gotham Gazette

Read more by this writer.

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City’s Flawed Capital Project Process the Subject of Renewed Scrutiny, and Some Reform Thu, 21 Mar 2019 04:00:00 +0000
Charter Revision Commission Hears Expert Testimony on Conflicts of Interest and Chief Diversity Officer http://www.gothamgazette.com/city/8365-charter-revision-commission-hears-expert-testimony-on-conflicts-of-interest-and-chief-diversity-officer http://www.gothamgazette.com/city/8365-charter-revision-commission-hears-expert-testimony-on-conflicts-of-interest-and-chief-diversity-officer gg cc h

(photo: Sofie Hecht/Gotham Gazette)


On Thursday evening, the 2019 Charter Revision Commission heard from experts in city government and activist circles to discuss possible charter amendments that could enhance precautionary measures against conflicts of interest in city government, and the potential mandated addition of a chief diversity officer in the mayor’s office, at mayoral agencies, and elsewhere. The push for adding chief diversity officers is being led by city Comptroller Scott Stringer, who created such a position in his office and has made the effort one of his top priorities among many suggested charter changes.

After having held a series of open public hearings around the city, the 2019 Charter Revision Commission announced its focus areas and is holding a series of “expert” hearings as it considers major potential overhauls to the city charter for the first time in 30 years. The commission will submit revisions to the city’s foundational laws before voters this November, though the proposals will undergo several rounds of public input before reaching the ballot.

The commission has already heard from experts on election reform, police accountability, and city budgeting and contracting. The commissioners on the charter revision commission were appointed by a variety of elected leaders, including the mayor, who had the most appointments but not a majority, the comptroller, the public advocate, the City Council speaker, and each of the borough presidents.

The charter currently aims to stamp out corruption in part through the Conflict of Interest Board (COIB), which consists of five mayoral appointees approved by City Council and a staff that executes trainings and investigations, among other tasks.

The COIB currently has four primary goals: educating public servants about the city’s rules on conflicts of interest as delineated in Chapter 68 of the charter, offering advice regarding public servants’ interpretation of Chapter 68 and the Lobbyist Gift Law, prosecuting politicians who break these rules, and enforcing the Annual Disclosure Law that requires yearly financial disclosures from all city politicians. The COIB oversees the mandate of a one-year freeze on politicians’ ability to lobby their former agency once they leave office.

Current COIB Chair Richard Briffault was the only expert on conflicts of interest and corruption to speak before the commission. He did not propose any amendments to the charter, but fielded questions from the commissioners and explained why he believes the COIB is working well in its current form.

“Our small size facilitates deliberation and action. The combination of mayoral appointment and Council confirmation...assures that any issues about any nomination can be publicly aired,” he explained.

Charter Commissioner Sal Albanese -- a former City Council member and three-time mayoral candidate, including in the 2017 Democratic primary against Mayor Bill de Blasio, who was appointed to the commission by Brooklyn Borough President Eric Adams -- asked if serving under mayoral appointment poses an inherent conflict of interest, implying that the current COIB structure incentivizes protection of the mayor. Briffault said he understood the concern, but explained that diversifying appointment power could enhance the notion that a COIB member should serve the politician who appointed them. A standard of mayoral appointees, Briffault argued, promotes a sense of cohesion within the body.

Briffault also cautioned against changing the COIB to operate more like the Joint Commission on Public Ethics, the highly-controversial state body that many argue is ineffective, and which draws appointments from the governor and legislative leaders.

Commission Chair Gail Benjamin, appointed by City Council Speaker Corey Johnson, echoed Albanese’s concerns, asking Briffault if the COIB would benefit by drawing members from a wider variety of employment sectors. Briffault conceded that attorneys currently comprise the majority of the COIB, if not its entirety. “The plus side [to that change] is guaranteeing that different perspectives are there,” he said. “But a lot of what we do is interpret and enforce the law.”

Albanese further inquired about the COIB’s opinion regarding the one-year lobbying ban on public servants leaving office, suggesting that a five-year or even lifetime ban would better root out corruption. Briffault declined to take a position on the matter. “We’re not policy-makers,” he said. But he did affirm the current yearlong measure, positing that a longer ban might “discourage high-quality people from going into government.”

While Albanese expressed concern about lobbying power and methods of circumventing the Lobbying Gift Law, Briffault maintained that certain actions like campaign donation bundling cannot be regulated as lobbying.

Commissioner Stephen Fiala asked if Briffault sought to increase the COIB’s relatively small annual budget of $2.5 million. Briffault remained ambivalent, though he said that either consistently re-adjusting the budget for inflation or tying the budget to a percentage of that of City Council would benefit the COIB. In recent years COIB has pushed for more funding during City Council budget hearings, with representatives explaining that it is challenging to perform all of the trainings and other tasks it has given its staffing levels and high turnover based on lower-than-ideal pay.

The commission also heard from experts regarding the installation of a chief diversity officer within the mayor’s office and deputy officers in each city agency to oversee the Women and Minority-Owned Business Enterprise program (MWBE). While all experts and commissioners agreed on the program’s importance, contention arose over whether the chief diversity officer program should be codified into the city charter when an MWBE system has already been legislated into effect with Local Law 12.

Reverend Jacques Andre DeGraff and Wendy Garcia, chief diversity officer for the office of city Comptroller Scott Stringer, both argued in favor of codification, while director of the Mayor’s Office of MWBEs and Dawn Pinnock, executive deputy commissioner of people operations and risk management at the Department of Citywide Administrative Services, argued that Local Law 12 should stand on its own. Andrea Bowen, an transgender and gender-nonconforming rights activist, did not take a clear stance on the issue, but pushed the commission to consider ways to codify increased hiring of trans folks around the city.

The commission was supposed to hear concerns about the sprawling public pension system, but experts from Comptroller Stringer’s office, who oversee the city pension system, were unable to attend, frustrating Albanese who requested time at the start of the session to rail against the absence of Stringer and his staff. “He’s missing in action and so is his staff,” Albanese said. “It’s a politically tough issue, but that’s what you get paid for as an elected official.”

The next charter commission hearing will take place on Monday, March 18, on other issues of governance, including the role of the public advocate.

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Charter Revision Commission Hears Expert Testimony on Conflicts of Interest and Chief Diversity Officer Sun, 17 Mar 2019 04:00:00 +0000
Calling for More Savings, Stringer Releases Analysis of De Blasio Budget Plan http://www.gothamgazette.com/city/8325-calling-for-more-savings-stringer-releases-analysis-of-de-blasio-budget-plan http://www.gothamgazette.com/city/8325-calling-for-more-savings-stringer-releases-analysis-of-de-blasio-budget-plan stringer fy2020 prelim

Comptroller Stringer


New York Comptroller Scott Stringer released on Friday his analysis of Mayor Bill de Blasio’s preliminary budget for fiscal year 2020, which begins July 1 of this year. De Blasio had presented a $92.2 billion budget plan on Feb. 7, 2019, the first step of many that will lead to a budget deal between de Blasio and the City Council. As comptroller, Stringer is tasked with budget oversight and monitoring the city’s fiscal health.

During his presentation at his Manhattan office, Stringer expressed concern over de Blasio’s use of “one-time actions” to craft the budget and said the city ought to increase its savings “cushion” to 15% of total spending to prepare for an impending economic downturn. Savings are at roughly 11%, he said. Stringer said that de Blasio’s preliminary budget, which is far from the final product, would make for spending growth of 2.1%. The city budget has grown significantly and rapidly under de Blasio.

Stringer warned the city should be ready to take a budget hit from the state and while he commended the mayor for announcing a new savings plan -- de Blasio’s version of a Program to Eliminate the Gap, or PEG -- Stringer said it is not as ambitious as it should be and city agencies need a real “scrub” of their budgets and operations to identify more opportunities for efficiency.

Stringer also announced that he has removed the Department of Education from his “agency watch list” — a tool the office introduced last year to most closely track efficiency of spending in select city agencies of concern — and the Department of Buildings has been added. DOB, he said, has hired 132 new construction inspectors — a 62% increase in spending — while construction accidents rose 252%. The other two entrants on the watch list, the Department of Correction and the agencies that perform homeless services, remain.

Stringer pointed out, as de Blasio had, that city and state tax revenues have fallen recently, raising significant red flags as budget season unfolds. The state budget appears to be on shakier ground than the city’s, and a state spending plan is due by April 1, which will influence the city budget that is decided thereafter. The comptroller said the city should prepare for the state to shift the burden.

“The first place Albany goes to save money is New York City,” said Stringer. “We are not doing enough to prepare for this scenario or this reality.”

De Blasio and Stringer both recently testified in the state capital at a joint legislative budget hearing. During his testimony, de Blasio asked legislators to help him fight back against proposed cost shifts and cuts that Governor Andrew Cuomo had outlined in his January executive budget.

Stringer said on Friday that the city’s projected accumulated surplus is $1.4 billion less than at the start of this fiscal year despite the $400 million added to it, and most of the addition to the surplus this year was due to “one-time shots,” which are resources the city only collects once and can’t count on in recurring fashion.

After nine years of surplus and economic expansion, Stringer said the city should prepare for an economic downturn as the federal tax stimulus wears off. As the unprecedented growth streak has continued, de Blasio, Stringer and others have expected tougher times year after year, but they have not yet arrived. This year could be different, depending in part on how New York taxpayers have and continue to react to the new federal tax code.

As he called for the larger budget cushion -- something Stringer has pushed for years and de Blasio has mostly dismissed, citing large reserves -- the comptroller said preparation is key in order to protect low-income families, city workers, and social services that could be the biggest victims of city cuts.

On his agency watchlist, launched last year in an effort to reform spending at certain city agencies, Stringer congratulated the Department of Education for making its way off after reducing travel costs and consolidating redundant programs. He said DOE showed conclusive evidence of more efficient spending.

But the Department of Buildings made its way onto the list after hiring the 132 new construction inspectors, a 78.6% increase that yielded only a 32% increase in inspections. Meanwhile, there was a 252% increase in construction accidents, Stringer said, and a 166.7% increase in construction fatalities from fiscal year 2014 to 2018.

“We needed to hire inspectors, but they must be deployed in a way that gets results, and that's not what we are seeing here, so they have joined the watchlist,” he said.

The Department of Correction and five different city agencies that spend on homelessness remain on the watchlist. City spending on homelessness has increased from $1.3 billion in fiscal year 2014 to a projected $2.9 billion in fiscal year 2020, with the majority of spending going to shelters and other funding to prevention and services, with little impact in reducing the city’s homeless population — with 60,620 adults and children living in shelters as of Thursday, according to the city, and 580,000 New Yorkers living rent-burdened and on the edge of homelessness.

“This is really a crisis that is not being managed,” said Stringer. “There’s a lot of contributing factors.”

De Blasio has repeatedly said that he has not made the progress he’d hoped on homelessness but has also made the case that his administration’s efforts have stopped the problem from getting much worse, and that the city has finally stabilized the decades-long growth in homelessness, including through a significant increase in anti-eviction programs as well as rent vouchers for those leaving shelter.

Correction remains on the watch list after spending has nearly doubled since fiscal year 2014, partly in an effort to decrease violence on Rikers Island, though that violence has increased while the overall jail population has decreased significantly. According to the comptroller, the city currently spends $300,000 per detainee every year, up from $117,000 in 2008, and in the same period the number of violent incidents has more than tripled to 1,354 per 1,000 population. Meanwhile the number of detainees has decreased by 36%.

The comptroller also announced Friday that he has sent a letter to de Blasio’s office asking for a full financial accounting for ThriveNYC, the mental health program run by First Lady Chirlane McCray that has recently come under media and City Council scrutiny. Stringer expressed concerns about the transparency and effectiveness of the funding, and said he wants to determine where exactly the $250 million in annual spending is going.

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by Brianna Zimmerman, Gotham Gazette

Read more by this writer.

Ben Max contributed to this article.

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Calling for More Savings, Stringer Releases Analysis of De Blasio Budget Plan Fri, 01 Mar 2019 05:00:00 +0000
Citing Causes for Concern & Promising Cuts, De Blasio Presents Still-Growing Budget Plan of $92.2 Billion http://www.gothamgazette.com/city/8266-citing-several-causes-for-concern-de-blasio-presents-still-growing-budget-plan-of-92-2-billion http://www.gothamgazette.com/city/8266-citing-several-causes-for-concern-de-blasio-presents-still-growing-budget-plan-of-92-2-billion may bill de blasio fiscal 20

Mayor de Blasio presents his budget (photo: Ed Reed/Mayoral Photography Office)


When Mayor Bill de Blasio presented his preliminary budget proposal last year, he issued solemn warnings about the threats posed by cuts in the state budget and from federal maneuvers that could mean fewer resources for the city. On Thursday, de Blasio repeated that message, but in more dire terms, as he unveiled a $92.2 billion spending proposal for the 2020 fiscal year that starts July 1.

While the plan calls for another significant annual increase in spending -- about $3 billion, or 3.4 percent, from the budget adopted last June -- the mayor also said his administration would have to make difficult decisions in the coming months, instituting a new savings program to find efficiencies in city government while ensuring that front-facing services do not suffer.

“We have some tough choices up ahead under any scenario,” de Blasio said in City Hall’s Blue Room. “We will be guided by the need to make hard choices, to find savings and then when we have to choose, we will favor the priorities that we believe are most strategic and high impact. If a program is nobly intended but not as strategically central or not as valuable, that’s where you will find the cuts.”

The mayor’s proposal will soon become the subject of City Council hearings, and the mayor will be in Albany on Monday to testify at a state budget hearing, where he will tell legislators they must help him undo elements in Governor Andrew Cuomo’s executive budget plan, which the mayor said totaled about $600 million in proposed cuts and cost shifts to the city.

The $3 billion in increased city spending outlined in de Blasio’s preliminary budget includes about $1 billion additional spending stemming from recent contract agreements with labor unions, $632 million in added education spending, $358 million in debt service costs, $325 million in fringe benefits for city employees, $113 million in mandatory charter school spending, and $109 million to expand the city’s 3-K for all program.

Overall, the preliminary budget represents a nearly $20 billion increase since the last budget modification before de Blasio took office in 2014.  

But de Blasio cautioned of an economic recession on the horizon, the symptoms of which are already beginning to show and are forcing the city to tighten its belt. The city is projecting that personal income tax revenue would be $935 million less this fiscal year than last year, for instance, with most of the drop off in December and January revenue collections. (Similarly, Governor Andrew Cuomo announced earlier this week that the state is expecting a $2.3 billion shortfall because of lower income tax revenue. De Blasio noted that Cuomo had already looked to the city to make up state deficits before the recently-announced shortfalls.)

Along with those concerning tax receipts, de Blasio pointed to additional pressure from developments at the state and federal levels. He pointed to the proposed Cuomo cuts and cost shifts that the city may have to bear in spending on education, financial assistance and health services for needy families, and spending for at-risk youth. “These are permanent cuts...when these cuts occur in the state budget, it’s not just for one year. The money goes away, never comes back,” he said, promising to oppose them but conceding that some losses may happen despite the city’s best efforts. 

The governor's administration later sought to rebut the mayor's comments on decreased education funding. "We don't know how the City considers a $282 million school aid increase over last year a cut, and a cut from what you ‘expected’ to get is a bizarre concept," said Morris Peters, a Division of Budget spokesperson, in a statement. "The state has a formula that outlines what the funding increase will be year to year – so why the City would expect to get something higher than that is nonsensical and a pure fabrication."

The threat to the city emanating from Washington is far less certain. The federal government faces a February 15 deadline to reach a budget agreement and preempt another disruptive government shutdown. If that agreement fails, de Blasio said the state would lose about $500 million every month starting in May, with the city losing about $110 million monthly. There are the more nebulous effects of the fluctuations in the stock market, which have been partly to blame for lower city revenue, and federal trade policy.

Taking those factors into account, the mayor announced that for the first time since he took office in 2014, he would institute a PEG (Program to Eliminate the Gap), which former Mayor Michael Bloomberg employed to control agency costs. Unlike Bloomberg’s program, however, de Blasio does not plan to institute a citywide percentage-based cut in spending at all or most agencies. Instead, he said he will direct most if not all agencies to cut a collective $750 million in costs by April, including by expanding a partial hiring freeze that the city estimates has saved $448 million since it was announced in April 2017. Each agency will receive a target figure for spending cuts from the city’s Office of Management and Budget, de Blasio said.

The preliminary budget also includes $1 billion in savings across fiscal years 2019 and 2020, and $1.6 billion in savings on healthcare spending in fiscal year 2020, increasing to $1.9 billion in fiscal year 2021. Yet, notably the mayor did not dedicate additional resources to the city’s reserves, keeping them flat over last year -- they include $1 billion in the general reserve, $250 million in the capital stabilization reserve, and $4.5 billion in the Retiree Health Benefits Trust Fund. Budget watchdogs have repeatedly said that while the city has solid reserves, they are not enough, especially as de Blasio continues to increase spending, to truly weather a recession.

The mayor’s preliminary budget includes few major new investments in programs, and continues funding for those that are already underway or have been announced by the mayor in the last few months. Those include $25 million for NYC Care, which will give healthcare access to uninsured New Yorkers. The program is expected to launch in the Bronx this summer and will expand citywide by 2021 at a cost of $100 million annually, serving 600,000 people. The city also plans in next fiscal year to spend $106 million to continue funding Fair Fares (half-priced MetroCards for low-income New Yorkers); $5.3 million to speed up Crisis Intervention Training for NYPD officers; $25 million to expand 3-K for All in the Bronx and Brooklyn; and $2.7 million to increase bus speeds by 25 percent by the end of next year.

Also, for the first time ever, the city’s preliminary ten-year capital strategy reached triple digits, for a high of $104.1 billion, an increase of 8.7 percent. The city’s expense and capital budgets are calculating and presented separately. Every two years the capital strategy is re-established.  

“You’ve all heard the truism that budgets are a statement of values. That’s gonna play out in these coming months,” de Blasio said. “If we get continued good news from Washington, from Albany, from our broader economic context, we’ll have more freedom. If we get bad news, we’ll be ready to make some very tough decisions.”

In the next few weeks, the mayor’s budget proposal will be dissected in a series of City Council hearings, where officials from the administration will be called to testify. On Thursday, the Council acknowledged the city’s difficult fiscal position but indicated that it was ready for tough negotiations.

“We know there are challenges presented by the economy, as well as funding shortfalls from the state, particularly in education and social services. We will work with the Administration to get our fair share from Albany,” said Council Speaker Corey Johnson, finance committee chair Daniel Dromm, and capital budget chair Vanessa Gibson, in a joint statement. “But even while recognizing the challenges, we also know this City’s economy is strong and we will fight for a fiscally responsible plan that protects the social safety net.” They vowed to push for funding for Fair Fares, education, immigrant families, and permanent housing for those who need it. “These are our values and we will never walk away from them.”

Comptroller Scott Stringer also took note of the “warning signs” for the economy and commended the mayor for instituting a PEG, which he has called for repeatedly. “It’s past time for City agencies to seriously evaluate how effective their spending really is in achieving results for New Yorkers,” he said.

Year after year, fiscal watchdogs and rating agencies have praised the city’s responsible budgeting but have also raised alarms about spending trends that could backfire in an economic crunch. Andrew Rein, president of the nonprofit Citizens Budget Commission, reiterated some of those concerns on Thursday, noting that the budget showed “modest restraint” in increased spending.

“Much bolder action is needed to ensure the City is prepared for an economic downturn,” Rein said. “Spending growth should be limited to inflation and reserves should be increased. The PEG announced today should be developed with an eye to making operations more efficient and generating recurring savings.”

Last week, CBC recommended that the city pursue a four-part strategy of lower spending growth, greater reserves, improvements to the capital plan and strengthening the fiscal health of three major public authorities -- the New York City Housing Authority, NYC Health + Hospitals, and the Metropolitan Transportation Authority.

The mayor said his budget did not include any new funding for the MTA, funding for which is expected to be a major source of contention between de Blasio and Cuomo over the next several months.

A state budget is due by April 1, at which time the mayor and City Council will have significantly more information to work toward their next spending plan, which is due by July 1.

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

Read more by this writer.

Note - This article has been updated with a statement from a state Division of Budget spokesperson. 

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Citing Causes for Concern & Promising Cuts, De Blasio Presents Still-Growing Budget Plan of $92.2 Billion Thu, 07 Feb 2019 05:00:00 +0000
Despite Need, Gaining More State Support for Affordable Housing Remains Major Challenge for De Blasio http://www.gothamgazette.com/130-opinion/8252-despite-need-gaining-more-state-support-for-affordable-housing-remains-major-challenge-for-de-blasio http://www.gothamgazette.com/130-opinion/8252-despite-need-gaining-more-state-support-for-affordable-housing-remains-major-challenge-for-de-blasio cuomo gov housing

(photo: the governor's office)


Right now, New York City’s government should be taking advantage of the Democratic majority in both houses of the New York State Legislature to make progress addressing the affordable housing and homelessness crisis affecting city residents. But success requires a skillful effort since the political challenge is daunting, despite overwhelming public concern.

Why now? We have a new Democratic majority in the state Senate elected in 2018. The state Assembly, controlled by Democrats since 1975, has been a liberal body limited by Republican power virtually the entire time, until now.

But there is no immediate consensus on what the housing solutions might be, how much money might be available, whether the new Senate Democrats would be willing to vote for a new tax, even if just levied in New York City, or the extent to which the Cuomo administration is willing to spend more money. The population in need is large and diverse, and the resources to address any particular segment of the needy population are severely limited.

What’s the city been doing up until now? City government has made major investments in affordable housing and used its resources to stabilize evictions and step up emergency assistance -- to prevent the crisis from getting worse. But there is little let-up in a cycle of rapid growth, gentrification, and development, rising rents and prices, and the inability of large segments of the city’s population to afford higher rents on limited incomes as low rent apartments have grown scarce.

Housing data show us exactly where New York City stands. The dimensions of the housing crisis are staggering:

-There are more than 2 million rental apartments in the City of New York, with about 1 million in the private rent-stabilized or controlled system, according to Housing NYC 2018, the annual Rent Guidelines Board report. Median household incomes in rent-stabilized apartments are about $45,000 a year in 2016, and median rent stabilized rents were $1,270 in 2017.

-A report by Comptroller Scott Stringer (Nov. 2018), entitled The Housing We Need, identified 396,000 households in the City with incomes of less than $28,000 a year as severely rent-burdened, meaning their rent was 50% or more of their income. Additional households are also severely rent-burdened but their incomes are higher.

-There are 61,000 persons in the shelter system right now, not counting people living on the street (DHS Daily Report).

-There are 208,000 households on the New York City Housing Authority (NYCHA) waiting list, and 148,000 households on the Section 8 waiting list, with new applications closed (NYCHA Fact Sheet).

-Only about 18% of rental households live in a subsidized situation, like NYCHA, Section 8, or the Mitchell-Lama program, which has privately-owned but regulated units with low-cost financing and tax abatements to make them affordable (NYU Furman Center, 2017, Changes in NYC Housing Stock).

-About 19% of New York City residents, or 1.7 million people, lives in poverty.

The federal government added to the crisis by curtailing new subsidized housing in the 1980s and ‘90s.  

But, by 1994, New York City became governed for 20 years by Mayors Giuliani and Bloomberg, for whom low-income housing was not a major priority. The shelter population was 24,000 in 1993, 28,000 in 2001, and 49,000 in 2013, the end of Mayor Bloomberg’s tenure. Mayor Bloomberg developed a program called Advantage to help residents exit the shelter system, which had a two-year cap on a voucher-like subsidy to encourage recipient families to become independent. The cap was criticized for its lack of permanency and the state eliminated its share of the cost in 2011, whereupon the mayor refused to pick up the state share and the program lapsed.

State Senate Republicans, in power during Mayor de Blasio’s tenure up until now, were not interested in proposals from the mayor like the “mansion tax,” a surcharge on real property transfers above $2 million, with the new money dedicated to housing vouchers for the elderly. Aside from the universal pre-kindergarten victory in his first year, the city has spent much of its political energy in Albany trying to limit damage to the city budget from proposals by the Cuomo administration to shift social service, higher education, Medicaid, criminal justice, and transportation costs from the state to the city, winning on some issues but losing others, rather than obtaining major new resources from the state for housing.

There are a few programs in place right now that attempt, with varied levels of success, to help ease the housing crisis:  

Supportive Housing: Since the 1990s, both the state and city have committed more resources to supportive housing, which assists persons with serious addiction or mental illness, the frail elderly, and others, and recently have embarked on new programs in this area. The state has committed to 6,000 more units of supportive housing over five years (not all of which will be in New York City), starting around 2016, and the city has made a commitment to 15/15, meaning 15,000 more supportive housing units over the next 15 years, beginning around 2016. But these units will be available not just to persons with psychiatric disabilities in the shelter system, but to persons leaving psychiatric hospitals, prisons and jails, adult homes, or just coming from their own homes and families but diagnosed with severe illnesses. There are 16,000 single adults in the shelter system now. 21,000 single adults entered the shelter system in Fiscal Year 2018, while fewer than 9,000 exited in that year (DHS Management Report, FY18). The capacity of new supportive housing units to rapidly absorb single adults from the shelter system is limited.

Affordable Housing: The large city affordable housing program, now called Housing New York 2.0, initiated by the de Blasio administration in 2014, has created or preserved 122,000 units since inception; the full plan calls for 300,00 units by 2026; 39,000 of the 122,000 units are new construction; the remainder preservation. Preserved units are also vital to long-term affordability because owners are agreeing to retain their building in regulated status in exchange for low-cost financing for repairs and large percentages of their residents are low- and moderate-income.

The new units are created through capital grants and low-cost financing to private developers to reduce the cost of construction, allowing some units to be marketed to low- and moderate-income tenants. Other units are rented at market rates and are not counted in the affordable classifications. Some projects are 100% affordable, meaning they have heavier subsidies and are not offered to higher-income households. Affordability relates to income levels; more than 50% of the affordable units have been slated for households making between $47,000 and $75,000 a year for a family of three. About 25% of the units have been slated for incomes below $47,000 a year.

But there is concern that not enough of the units are for very low-income households. A change for lower-income households would, however, require more subsidies, assuming the number-of-units goal remains the same. Without more money overall, the city would have to forsake some moderate-income units for lower-income units. Nonetheless the city has made a major commitment to getting more housing units built, in addition to the resources to reduce homelessness. The State of New York produces some affordable housing through its own programs, or sometimes in combination with city programs, but the scale of the state’s effort does not match the city’s.

There are several other significant proposals to address the affordable housing crisis that do require state involvement:

-Comptroller Scott Stringer proposed to change property transfer taxes to raise more revenue and concentrate the capital grant subsidies of the Housing New York program to the low-income population and the homeless.

The mortgage recording tax in the city would be eliminated while the real property transfer tax would become more progressive. The change would raise $400 million a year and the funds used to provide deeper subsides to help the city’s neediest population. But planned Housing New York units for the moderate-income group between $47,000 and $75,000 a year, and those above that level, would be switched over to the lower-income group and thus be displaced.

A modification to the Stringer proposal might be to use the $400 million a year as a targeted add-on for the lower-income population, rather than a substitution away from the moderate-income group. After all, both groups, the moderate-income, and the very low-income, need housing. Mayor de Blasio’s proposal, the Mansion Tax, and the comptroller’s plan both require a tax increase. But can the mayor persuade some of these new suburban Senate Democrats to agree to a tax increase for a housing purpose, when they are also being asked by the governor to support congestion pricing?

-Assemblymember Andrew Hevesi’s legislative proposal, named Home Stability Support, creates a Section 8-like voucher for the shelter population, as well as the at-risk of eviction population, funded at 14,000 vouchers a year. Cost estimates have ranged from $450 million a year to close to $1 billion a year (Renewed Push for Homeless Subsidy, Gotham Gazette, Dec. 2017). An effort by the Assembly and Senate last year in budget negotiations to fund even a start-up at $15 million a year was rejected by the governor’s Division of the Budget.

The Mansion Tax, the Hevesi proposal, the cancelled Advantage program, and current city emergency rehousing assistance efforts, which cost $200 million a year (NYC OMB, Mayor’s Message, 2018), all involve Section 8-like vouchers concept to help residents pay for rental apartments. New vouchers are very expensive. Section 8 usually pays a landlord up to $1,500 a month, or $18,000 a year, to cover one household. Each new 1,000 vouchers thus cost up to a new $18 million a year. Who should get the priority for new vouchers? The homeless? The elderly? The 148,000 households who are on the current Section 8 waiting lists, who have also been vetted as in need?

Some serious coalition building is in order to make progress. Gaining a political consensus about where to put new funds, and where the money will come from, means Mayor de Blasio must pull together support among housing advocates, the Assembly and the Senate, and run the gauntlet of Governor Cuomo and the state Division of the Budget. Is there sufficient political will to address this intractable problem?

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Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter @JimBrennanNY.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Despite Need, Gaining More State Support for Affordable Housing Remains Major Challenge for De Blasio Mon, 04 Feb 2019 05:00:00 +0000
Max & Murphy Podcast: Comptroller Scott Stringer http://www.gothamgazette.com/city/8157-max-murphy-podcast-comptroller-scott-stringer http://www.gothamgazette.com/city/8157-max-murphy-podcast-comptroller-scott-stringer mxm logo

Ben Max, left, of Gotham Gazette, and Jarrett Murphy, right, of City Limits


December 19, 2018 - Max & Murphy Podcast: Comptroller Scott Stringer

wbai 12 19 scott stringerCity Comptroller Scott Stringer joined the show to discuss his new affordable housing plan, the work he did on a state compensation commission, the deal to bring Amazon to New York City, and more.

Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org

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by Ben Max, Gotham Gazette
     

Read more by this writer.

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Max & Murphy Podcast: Comptroller Scott Stringer Wed, 19 Dec 2018 05:00:00 +0000
Agenda 2019: City & State Budgets on Mostly Solid Ground, with Major Questions Looming http://www.gothamgazette.com/state/8147-agenda-2019-city-state-budgets-on-mostly-solid-ground-with-major-questions-looming http://www.gothamgazette.com/state/8147-agenda-2019-city-state-budgets-on-mostly-solid-ground-with-major-questions-looming Cuomo budget presentation

Gov. Cuomo (photo: The Governor's Office)


This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

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.

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.

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.

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.

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.

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.

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.

New York State
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 State Fiscal Year 2019 budget, 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.

“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.”

The New York State Division of Budget’s mid-year financial update, 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.

State Comptroller Tom DiNapoli released his own financial update 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.

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, according to The Empire Center, a think tank. A report issued by the center in March suggested that the state should undertake several reforms to encourage the economic competitiveness which could help reverse that trend.

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.

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.

“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.”

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.”

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 projected to rise to $6.6 billion in 2020. New York currently ranks second-highest in the country, behind California, in outstanding debt.

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.

“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?”

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.”

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.

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.

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 argued 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.

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.

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.

“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.

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 a RAND Corporation study. 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.

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.

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.

While Cuomo has overseen its repeated extension and he has dismissed calls to expand it, during the recent election cycle he was mum about what he wants to do with the current millionaire’s tax.

New York City
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.

As City Comptroller Scott Stringer noted in his latest financial report 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.  

“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.

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.

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.

“[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.

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.

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.

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.

agenda19v2 aThere 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.

“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 the report 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.

“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.”

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.”

“No mayor has ever gotten through two terms without a recession,” she added on the eve of de Blasio’s sixth year in office.

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.

“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.

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.”

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.

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.

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.

“The city may not have choices so the speed with which this occurs may be out of our hands,” Lowenstein said.

This is part of AGENDA 2019, a joint Gotham Gazette-City Limits project
Find the rest of the series here

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

Read more by this writer.

Note - This article has been updated to ntoe that the Capital Stabilization Reserve is $250 million, not $250 billion. 

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Agenda 2019: City & State Budgets on Mostly Solid Ground, with Major Questions Looming Sun, 16 Dec 2018 05:00:00 +0000
Secretive Amazon Deal Should Have Us Rethinking Subsidy Programs and More http://www.gothamgazette.com/130-opinion/8137-secretive-amazon-deal-rethinking-subsidy-programs-scott-stringer http://www.gothamgazette.com/130-opinion/8137-secretive-amazon-deal-rethinking-subsidy-programs-scott-stringer Stringer de Blasio press conference

Comptroller Stringer, the author, at a press conference (photo: NYCHA)


What if I told you that moving your business to New York City could land you $3 billion in subsidies? Even better, what if getting those billions didn’t even require publicly disclosing key information required to qualify for the money in the first place?

If that sounds like a great deal to you, you’re in good company because Amazon is taking advantage of secrecy and subsidies baked into our outdated system of tax incentives. We all know the Amazon deal to place a “headquarters” in Long Island City was negotiated in the dark, circumventing a comprehensive public review process and leaving an entire community with more questions than answers. Meanwhile, as residents grapple with strained infrastructure and skyrocketing home prices, one of the largest and most profitable companies in the world will receive nothing short of a taxpayer-funded entitlement program.

The total package could approach nearly $3 billion when state and city benefits are included -- with an unprecedented $1.3 billion in city incentives alone. The Amazon deal has made it abundantly clear that many aspects of our current tax incentive programs – two in particular – need to be more closely scrutinized, changed or eliminated.

First, let’s take a look at the city’s Relocation and Employment Assistance Program, or REAP, which was originally designed to help attract employment outside of Manhattan’s business core. Amazon stands to receive some $900 million in tax credits for bringing its employees to Long Island City under REAP. To put this into perspective, REAP benefits totaled $32 million last year to 205 firms – but because there’s no cap on the program, Amazon alone stands to gain an unprecedented $75 million per year. In fact, REAP doesn’t just lower Amazon’s tax bill – because it’s a refundable tax credit, the city might actually have to cut a substantial refund check to Amazon.

Also, because REAP doesn’t require recipients to meet performance goals, Amazon can still receive benefits regardless of whether it eventually hires the 25,000 it promised, or just 25; or pays its employees an average of $150,000 as promised, or just $30,000.

Lost in the discussion is that our economy is already doing the work of REAP. Indeed, from 2007 to 2017, 83 percent of new jobs in New York City were outside of Manhattan, raising the question of whether the REAP program is needed in a city where businesses are already spreading across the five boroughs on their own.

Second, we need to pay close attention to the other benefit offered to Amazon, the Industrial and Commercial Abatement Program, or ICAP, which offers tax subsidies to companies that renovate or build on properties in boroughs outside of Manhattan to spur economic development. That may have sounded like a great idea when ICAP’s predecessor was originally launched in 1984, but today, at a time when Long Island City is booming, Amazon could benefit from nearly $400 million in property tax abatements for constructing its new “headquarters” in the neighborhood.

What’s worse, programs like REAP and ICAP are “as-of-right,” which means there’s no discretion in determining eligibility. If you check the boxes, you get the benefit – whether you’re a startup in need of help or Amazon, which is valued at $1 trillion.

The final insult in all of this is that there is little to no publicly available information on the particulars of these deals. In the absence of real detail, it’s impossible to do any serious evaluation of the effectiveness of these programs in the neighborhoods they are supposed to lift up. How can we determine if future incentives are a responsible investment if we do not know who received the benefit, how much they received, or if the subsidy even helped create new jobs? It’s a fiscal black hole.

We need legislation that answers these questions by requiring companies to waive their rights to privacy regarding the terms of deals in exchange for receiving benefits. It’s the right thing to do, and it’s not without precedent – the city’s Industrial Development Authority, which provides low-cost financing and other benefits, already requires this of its beneficiaries. And like those agreements, the details of REAP and ICAP deals should be reported annually.

Would Amazon have come to New York without the benefit of REAP and ICAP? Clearly, New York City was at the top of Amazon’s list, regardless of the subsidies. But we cannot allow Amazon to be the only winner amid such great need, whether it’s the residents of Queensbridge Houses, seniors struggling to stay in the neighborhood, or local kids yearning to gain the skills that Amazon professes to value.

It’s time we re-evaluate these programs and stop doling out billions of tax dollars without knowing what we’re getting in return. Instead we should focus our resources in ways that actually serve to improve the lives of the New Yorkers and not as a handout for wealthy corporations. Above all, New York City taxpayers deserve transparency and accountability for the use of their money, and it’s a price any employer – including Amazon – should be willing to pay to do business in New York.

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Scott Stringer is the New York City Comptroller. On Twitter @NYCComptroller.

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Secretive Amazon Deal Should Have Us Rethinking Subsidy Programs and More Tue, 11 Dec 2018 05:00:00 +0000
Criticizing De Blasio's Approach, Stringer Releases Alternative Affordable Housing Plan http://www.gothamgazette.com/city/8111-criticizing-de-blasio-s-approach-stringer-releases-alternative-affordable-housing-plan http://www.gothamgazette.com/city/8111-criticizing-de-blasio-s-approach-stringer-releases-alternative-affordable-housing-plan stringer housing presser1

Comptroller Stringer (photo: @NYCComptroller)


City Comptroller Scott Stringer unveiled an ambitious plan on Thursday to address New York’s affordable housing crisis, criticizing Mayor Bill de Blasio for not doing enough and calling for investment of hundreds of millions of dollars in additional funds, increasing the share of affordable housing units for homeless and very low income people, and funding it by shifting tax burdens towards the wealthiest New York homeowners.

The plan, entitled “NYC For All: The Housing We Need,” is intended, Stringer said, to address issues with the affordable housing program embraced by not only the de Blasio administration, but administrations going back to the days of Mayor Ed Koch. Stringer characterized the proposal as a “war on poverty.”

“I believe it's time to change our approach,” Stringer said at a press conference announcing the plan. “We need to break the mold.”

Stringer noted that despite New York’s record number of jobs, low unemployment, and high population, the city’s aging housing stock has not kept up with demand, and rents have consequently risen in price dramatically, particularly in the past ten years. Most left behind, Stringer explained, are extremely and very low-income New Yorkers who face severe housing pressure, numbering 515,000 people, according to an analysis by his office, who are severely rent-burdened, meaning they pay more than 50 percent of their income in rent.

“Behind the numbers are real people,” Stringer said. “They’re actually working New Yorkers. The home health aides for our aging parents, the cashier at the local supermarket, the person who empties the trash and vacuums the office floors late at night. People we see and rely on every day.”

According to the report released on Thursday, the majority of units under de Blasio’s 300,000-unit affordable housing plan are being allocated for households with incomes of up to $75,120, which is categorized as “low-income” by the Stringer report, while far fewer units are allocated to very low and extremely low-income households. Extremely low-income households, which are characterized as those making less than $28,170 per year, are allocated about the same number of units under the plan as “middle-income” households, where household income reaches up to $154,935.

The report notes that this allocation does not accurately represent those who are actually in need of affordable housing, the main thrust of Stringer’s argument that the city’s plan is not appropriately calibrated to need, a point he and a variety of other elected officials and advocates have stressed for years but de Blasio has regularly challenged, saying he believes the plan must include segments for a broad spectrum of New Yorkers looking for affordable places to live.

The 515,000 extremely and very low-income households who are severely rent-burdened represent the vast majority of the 580,000 households citywide that are severely rent burdened or living long term in a shelter. However, only 75,000 units, or 25 percent of the proposed units under the de Blasio plan, are intended for those households.

“The current plan is simply out of line with where we need to build,” Stringer said.

To ameliorate the problem, Stringer’s plan calls for $500 million in additional annual funding for extremely and very low-income housing, including $375 million in capital costs and $125 million in operating subsidies. This would support the construction and maintenance of affordable units for the poorest New Yorkers, for whom construction is more expensive if landlords are going to charge lower rents.

The number of units would remain the same as under de Blasio’s Housing New York 2.0 Plan, which calls for building 120,000 new affordable units as part of the larger plan for 300,000 affordable units, most of which are those being “preserved” under affordable rent regulations. Stringer’s report noted that 34,000 apartments were already completed or are underway, and 85,000 remain to be built. Under the Stringer plan, 98 percent of those 85,000 units would be constructed as deeply affordable.

The plan also calls for tripling the number of units set aside in the Housing New York plan for homeless New Yorkers, from 5 percent to 15 percent, echoing a push by homeless advocates and a recent City Council bill introduced by Council Member Rafael Salamanca of the Bronx; and applying that percentage to both new construction and preserved units. Stringer cited statistics from the city’s Department of Housing Preservation and Development (HPD), stating that the city has not even met its 5 percent stated goal, with only 1 percent of units allocated to homeless families.

“Mayor Koch, as our research showed, set aside just 10 percent of units in his housing plan for the homeless,” Stringer said. “And the shelter population went down by more than a third in just three years. We can do that again.”

De Blasio has repeatedly opposed such calls, including when recently challenged by a homeless woman, who is an activist with Vocal New York, at his gym and on the radio.

Stringer’s plan also calls for at least 20,000 additional units to be developed on 600 plots of vacant, city-owned land by community land trusts or land banks controlled by non-profit entities.

To pay for these reforms, Stringer is proposing a sweeping change to the city’s property tax system that he says would increase annual city tax revenues by $400 million, through a more progressive tax system that raises rates on wealthy homeowners and eliminates a “double tax” on the middle class.

His plan would involve scrapping the “mortgage recording tax,” which Stringer characterized as being an extra tax on middle class homeowners.

“This system is patently unfair,” Stringer said. “It’s a penalty on the middle class who can’t pay all cash to buy a home.”

The current property tax scheme provides for both a tax on the cost of the transaction, and a tax on the value of the mortgage, with three brackets: under $500,000, between $500,000 and $1 million, and over $1 million. This system favors those who purchase apartments in cash, who tend to be wealthier and buy more expensive units, and do not have to pay the mortgage tax. Under the system, middle class homeowners often pay more than wealthy condo owners.

Stringer noted that in 2016, 80 percent of condo sales and 90 percent of townhouse sales in Manhattan were all-cash deals. Those cash deals escaped being subject to the MRT. The greater percentage of a transaction that is financed with borrowed money, the higher the tax incidence, putting a greater burden on buyers without the resources to do a cash deal.

While ditching the MRT, Stringer proposes creating a more graduated, progressive taxation system based only on the value of the transaction, taking into account high prices of some real estate by upping the top echelon from $1 million to $10 million. For properties over $10 million, the tax rate would be increased to 8 percent. Below $500,000, the rate would be 1 percent. Stringer hopes that, beyond funding affordable housing, the reformed tax structure could help encourage more middle- and working-class homeownership in the city.

The tax reforms would have to be approved by Albany. Stringer, who is widely expected to run for mayor in 2021, said that the new Democratic majority of the state Senate set to take power in January means that the tax reform is, for the first time in a long time, a possibility.

“We are beginning the conversation with legislators,” he said in response to a question. “And they are going well. Again, I want to stress that the state of play has fundamentally changed, we all know it’s changed. I believe that, obviously there are priorities like renewing and strengthening the rent laws, and they have a lot on their plate, but this can get done now because we have like-minded people who understand the housing crisis.”

Getting the mayor on board with the plan may be a different story. Stringer said that de Blasio has recognized some issues with the housing plan, but noted that City Hall has not given a firm answer on certain things.

“He has recognized that the plan originally put forth was not meeting the needs of the people who need the housing the most,” Stringer said, referring to the fact that de Blasio has made some tweaks to the plan, even while resisting some of the other calls for more sweeping changes.

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by Ben Brachfeld, Gotham Gazette

Read more by this writer.

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Criticizing De Blasio's Approach, Stringer Releases Alternative Affordable Housing Plan Thu, 29 Nov 2018 05:00:00 +0000
De Blasio Pushes 'Yes' Vote on 3 Ballot Proposals http://www.gothamgazette.com/city/8040-de-blasio-pushes-yes-vote-on-3-ballot-proposals http://www.gothamgazette.com/city/8040-de-blasio-pushes-yes-vote-on-3-ballot-proposals de blasio 3 ballet

32BJ's Hector Figueroa, with Mayor de Blasio and others (photo: @32BJSEIU)


Mayor Bill de Blasio on Thursday continued his eleventh-hour push for the ballot proposals put forth by his Charter Revision Commission, with a rally at the headquarters of labor union 32BJ SEIU, where he was joined by other unions, elected officials, and advocates in favor of the three reforms that will appear on New York City voters’ ballots on Election Day.

De Blasio, who announced the commission in his 2018 State of the City address to examine and propose revisions to the city’s charter, characterizes the three proposals as ones that will strengthen democracy in New York City. Broadly speaking, though each has numerous accompanying details, the proposals are to lower individual campaign contribution limits and increase the public match ratio; create a civic engagement commission that would run a citywide participatory budgeting program and do other tasks to promote civic involvement; and, most controversially, term limits for community board members and other changes to the community board membership process.

After saying virtually nothing about them for weeks, the mayor has been on something of a last-minute whirlwind tour in favor of the proposals. On Sunday, the mayor stumped for them at two Manhattan churches. On Tuesday, he conducted a telephone town hall and published an op-ed in the Brooklyn Daily Eagle supporting the measures. He and his team have been urging allies, including Senator Bernie Sanders, to promote “yes” votes, and the mayor’s social media feeds have been promoting the measures and expressions of support for them.

The Thursday rally, backed by the “Democracy Yes” coalition of unions, advocates, good government groups, and community groups that support the proposals, is the latest in de Blasio’s campaign sweep through the city in favor of the charter revisions.

The mayor and the assembled crowd characterized the measures as a way to wrest control of the democratic process away from old, wealthy, white men and towards more democratic control and greater representation for young people, people of color, immigrants, and low-income people.

“If what young people hear from everyone else around them is, ‘wait your turn,’ that is not a way to create a healthier, stronger democracy,” de Blasio said, referencing opposition to the community board term limit proposal. Critics say term limits would lead to a brain drain on community boards to the benefit of real estate developers, though the real estate lobby itself is against term limits. The proposal would limit members to four consectuve two-year terms, but those term-limited from reapplying would only have to sit out one two-year term before being eligible for reappointment by their borough president.

The borough presidents, aside from Brooklyn’s Eric Adams, and Comptroller Scott Stringer (the former Manhattan borough president) have led the charge against Proposal 3.

“Our message needs to be the opposite,” the mayor continued.

“Imagine if the system was not rigged against everyday people, but actually strengthened the hand of everyday New Yorkers so we could lead our own city,” de Blasio said.

The Rev. Al Sharpton also spoke in favor of all three proposals, making racial justice arguments and calling the measures models for the country and bulwarks against voter suppression nationwide, invoking the memory of civil rights movement protesters.

“These measures that we’re voting in New York is what they fought for to give us the right to vote,” Sharpton said. “They did not fight, and some die, to give us the right to vote for only people with rich friends to be able to run for office.”

The city’s public campaign financing system, whereby the first or up to $175 of a donation is matched 6-to-1 by public dollars, is often considered a model for the nation for how to achieve sustainable public financing of campaigns. Proposal 1 would increase the match to 8-to-1, and match donations up to $250. It would also lower campaign contribution limits for all city offices. Advocates say that it would allow more people to run for office and lower prospective candidates’ reliance on wealthy people for funding.

“When we consider running for office, we encounter barriers so difficult to overcome, many feel defeated,” said Hercules Reid, the former student government president at the New York City College of Technology and current legislative director for the CUNY University Student Senate. “It is a herculean task trying to get elected in this city.”

“Barriers to office are real, and a real big one is that not a lot of us know a ton of rich people,” Reid continued. De Blasio later echoed this point, though the mayor has raised significant funds from large donors, both for his election campaigns and outside groups. It was fundraising for those outside groups -- nonprofit advocacy organizations -- that led to investigations of de Blasio and his associates that resulted in no criminal charges but sharp criticism from law enforcement leaders and good government advocates, among others, as well as new city laws meant to curb the type of fundraising de Blasio did.

The second ballot question would establish a “civic engagement commission” to increase participation in New York’s civic life, including voting. The mayor noted improving translation services at the polls as a particularly important item for the commission to take up, while City Council Member Brad Lander discussed increasing community engagement with and knowledge of community boards, PTAs, and other institutions. The most significant job of the commission, however, would be to expand participatory budgeting citywide.

Practiced in 31 of the 51 City Council districts this year, participatory budgeting allows community residents to suggest and vote on specific projects within their districts that they would like to fund with tax dollars allocated through the local Council member’s capital funds.

“A little over half the city now has it, but almost half does not, and most New Yorkers don’t yet know about it, because we’ve not been able to invest real citywide resources in it,” Lander said. “Participatory budgeting functions like a gateway drug to democracy.” Some projects funded in Lander’s district in the last cycle include replacing “derelict Kindergarten sinks at PS 282,” replacing a broken gate at the PS 118 schoolyard to make it accessible, and building a “playground” for seniors.

Manhattan Borough President Gale Brewer and Comptroller Stringer both take issue with the civic engagement commission, which Stringer characterizes as a power grab by the mayor, who would appoint a majority of its members. Brewer, who has formed an independent expenditure committee in opposition to questions 2 and 3, asserts that the commission’s outreach and assistance efforts with community boards would be an encroachment by the mayor on a duty typically performed by borough presidents.

“A ‘Civic Engagement Commission’ controlled by any Mayor also puts communities at a disadvantage and won’t enhance democracy in our neighborhoods,” Stringer said in a statement released soon after the mayor’s rally. Asked for a response, de Blasio said that the commission’s structure as proposed is “organized for effectiveness” but didn’t elaborate, and noted that he supports a “professionalized” Board of Elections.

On the third and most controversial proposal, which is centered on term limits for community board members, the mayor and advocates claim that term limits have been successful for elected city officials, and instituting them for community boards would free up space for new voices where older and whiter ones than the communities they represent typically reign. The proposal would also require borough presidents to seek people of “diverse backgrounds” for appointments, to make the boards more accurately represent their communities, and provide more public information.

“If the door’s not open, that’s not democracy,” de Blasio said. “Community boards have to be for everyone, every community, every background, young, old, everyone needs a chance to serve. Term limits for community boards is simply the way of saying ‘let’s give everyone a chance to participate.’”

Opponents of term limits, such as Brewer and Stringer, have charged that an exodus of longtime, experienced community board members would cause both a brain drain and a diminution of influence on complex land use decisions, allowing developers to run roughshod over them.

“It would have the effect of allowing developers and their lawyers—who are never term limited!—to dominate development negotiations, because those long-time members will be gone,” Brewer wrote in an email to supporters in October signaling her opposition to Questions 2 and 3. “And on long-term city projects like street redesign or sustainability, newly-appointed community board members would have little influence over long-term projects. Every Board’s institutional memory would be wiped out.”

De Blasio did not buy the arguments. “I have term limits, my colleagues in the City Council have term limits, the President of the United States has term limits,” he said. “I think there’s something healthy about the notion that all public servants have an opportunity to turn over the reins once in a while.”

“Let’s say someone served for 20 years on their community board,” he continued. “Under this ballot measure, they will get to serve another eight years, they would take a two year break, and if they wanted to come back and there was a seat, they could have that seat. I think there will be plenty of institutional knowledge preserved. But honestly, what we’re missing right now is new voices, we’re missing diversity, we’re missing young people.”

Another charter revision commission, empaneled by the City Council through legislation pushed by Brewer and Public Advocate Letitia James, started while the mayor’s commission was underway and is working to produce its own ballot measures for 2019. The mayor told Gotham Gazette that the commissions are not rivaling each other, and that his office is working with the 2019 commission, on which he has several appointees.

Some issues were considered and rejected by the mayor’s commission, including independent redistricting of City Council districts and ranked-choice voting. The mayor told Gotham Gazette that he hopes the 2019 commission continues looking into ranked-choice voting, in particular.

“There was a very vibrant discussion in this charter revision commission, for example, about ranked-choice voting,” he said. “For me, the jury’s still out on ranked-choice voting. I grew up with it, in Massachusetts. I think it has strengths and I think it has weaknesses, and I’d certainly like to see a lot more research on it. But there’s a lot of people who believe it might be very beneficial in New York City. That’s the kind of thing that deserves a really thorough airing of all the facts.”

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by Ben Brachfeld, Gotham Gazette

Read more by this writer.

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De Blasio Pushes 'Yes' Vote on 3 Ballot Proposals Thu, 01 Nov 2018 04:00:00 +0000