What will be Michael Bloomberg's legacy as mayor? Bloomberg has said what he would like it to be - reforming public education in his first term, addressing poverty in his second. But public officials cannot usually control how they are viewed by history, and, while much can happen in the more than three years left to the Bloomberg administration, events over the past few months may wind up helping determine what ultimately will be seen as this mayor's main accomplishments.
What seems likely right now (at least for those of us who pay attention to the city's finances) is that the mayor's legacy will revolve around his bold moves in budgeting - his introduction of a three billion-dollar tax increase in the middle of the fiscal 2003 year, and his unilaterally setting aside $2 billion for a city retirees health fund in 2006 - and in economic development -- his giving of huge subsidies to sports owners and real estate developers, the impacts of which will not be known for decades.
Why Not Poverty?
Mayor Bloomberg appointed a Commission on Economic Opportunity to come up with innovative ideas to address poverty in the city. The commission's initial report is scheduled for release sometime this month.
New data from the United States Census Bureau underscore the potential relevance of Bloomberg's second-term focus on poverty. The city's poverty rate has not changed in the past five years. In Manhattan the earnings of the top fifth of earners ($330,244 on average) are 41 times the earnings of the bottom fifth ($8,019 on average). The Bronx is the poorest urban county in the United States.
Yet some critics now wonder what will come of the mayor's attention. A memo from the leaders of the commission leaked recently to the press suggests that the commission will not be addressing aid to the elderly, the unemployed, the homeless, and those returning from prison.
The implication seems to be that the resources simply are not there to tackle the problems of all those New Yorkers affected by poverty. Rather, the commission's focus reportedly will be on three groups -- children, young adults, and the working poor. And, if little new city money is invested to fight poverty, management reform is likely to be key. For example, the Times noted that food stamp administration will be important for all three of the groups targeted by the commission. Food stamps are fully funded by the federal government, so any expansion of their use is a cost-free reform for the city.
Food stamp use has increased from about 800,000 at the beginning of the mayor's first term in 2002 to nearly 1.1 million today. But this is far from the nearly 1.5 million receiving them in 1995, even though hundreds of thousands more are eligible and in need. The Times also noted that the mayor in March rejected an expansion of food stamp eligibility to unemployed adults proposed by his own social service agency officials.
The Bloomberg administration instituted a major restructuring of the city's education bureaucracy in his first term. There is not universal agreement on what this has meant for the education of individual students. In the meantime, the Daily News recently reported that the city's education department issued about $120 million in no-bid contracts last year without public review. According to the News, city comptroller data show that this is ten times the amount of no-bid contracts awarded in 2002. School officials responded that these contracts are a only a small fraction of the $3 billion in education contracts, and that such contracts are used only under time constraints, for limited extensions, or for specialized companies.
But the more important point here is that education contracting does not follow the same rules as does other city agency contracting. The schools' deputy chancellor for finance and administration said to the News, "We all work for the mayor.But in terms of actually what this entity is, it's not a city agency." This "entity" follows state, not city contracting rules. This means the city comptroller, who oversees the city's contracting process, has limited powers over the new department of education.
The city comptroller does have audit oversight of the education department, though, and his June audit in one area of contracting - job order contracts that involve expeditious maintenance, repairs, and minor construction work in schools - found "significant weaknesses" in the department's administration of this program, including incomplete work, unsatisfactory work, and failure to meet deadlines. The audit made 24 recommendations for improvement.
Much of the Bloomberg administration's economic development plans have focused on subsidizing stadiums for sports teams - the Jets football team, the Yankees and Mets baseball teams, the Nets basketball team. The stadium for the Jets is a broken dream. The ones for the Yankees and the Mets are being fulfilled, though critics grumble. (It's an interesting sidelight to the story that a report by the city comptroller found the Yankees more than a quarter of a million dollars in arrears in payment to the city for its use of the current city-owned stadium.) The arena for the Nets is a dream not yet realized that critics are broadcasting as a nightmare.
The Forest City Ratner basketball arena and commercial development plan in Brooklyn - controlled by the state's Empire State Development Corporation -- was challenged at a raucous hearing by neighborhood advocates who attacked the size and location of the project. Shortly afterward, the developer reportedly planned to reduce the size of the project; this apparently won over few critics.
Another big development plan faced a new roadblock during the summer. The city's offer to buy the development rights to the MTA's West Side railyards for $500 million will have to overcome a new appraisal that says it's worth $1.5 billion.
On the other hand, the NYC Industrial Development Agency's August 3 hearing on the proposed tax breaks for future West Side Hudson Yards commercial developers (discussed in my August finance column) was followed quickly on August 8 by the agency's approval of the proposal. This deal -- rushed to judgment before the Independent Budget Office or other fiscal monitor could confirm or question the assumptions and fiscal projections - could result in a loss of more than a third of the future property taxes from the area over the next 30 years.
Will these tax breaks stimulate development and wind up generating more revenue for the city? This is what the Bloomberg administration hopes will be part of its legacy.Glenn Pasanen, who teaches political science at Lehman College, has been in charge of Gotham Gazette's finance topic page since 2001.Â