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Citizens Union

Rebuilding NYC

A Time Of Crisis

It is an extraordinary time to be the Speaker of the City Council. Last year, we elected a new mayor, a new comptroller, and a new public advocate who have never served in public office. We elected four new borough presidents and 38 of the 51 City Council members are brand new. It may sound ridiculous, but I am the senior elected official in the city. I am the grizzled veteran.

The issue that I believe will define this era in city government is the budget. We are in the midst of the greatest fiscal crisis in the history of this city. It is much worse than anything we have dealt with before. I do not think the public has come to grips with that. And I do not think those of us in elected office have done as good a job as we should in preparing New Yorkers for this reality.

The governor and mayor made a decision that we needed to get a year under our belt before we dealt with our fiscal problems. I believe we need to honestly grapple with the fiscal crisis. That time, whether we like it or not, is coming very soon.

This year, the city faced a $5 billion budget gap. We borrowed $1.5 billion to ease the situation. We enacted some spending cuts, and we did some targeted tax increases like the cigarette tax and other fees. The mayor's way of dealing with the budget was to say that there should be across the board cuts and that there should be "no sacred cows." The council felt that there was a different and better approach -- to prioritize. I believe we were elected to office to help make those difficult decisions. For one, we believe that education and classroom funding should not be cut. And I am proud of the fact that we were able to do that in this year's budget.

Next year, we have another $5 billion budget gap; some say it could be worse. To put this number in perspective: if we were to cut 20,000 police officers, close every senior center, close every after-school program, and close every library, that would only save us $1.5 billion. That is how serious it is. We are not going to do those things and we can't do those things. If we did, we would stop being New York City.

In the last 10 years, we have gained more than 1 million new residents. New York City is still a place where people from around the world come to live, because they believe it is a good place. It is sometimes tough to be a New Yorker, but it's worth it because of the excitement, the creativity, and the uniqueness of our city. As we struggle to deal with our fiscal crisis, we have to preserve those essential elements of what it means to live in New York City. We can not cut education. We can not close down our cultural programs. If we do not preserve these things, than the city just becomes a tough place to live.

In order to do maintain services, we have to generate new revenues for the city.

This year, the council proposed a number of new revenue generating measures. We proposed an absentee landlord surcharge on property taxes. The city currently taxes multiple dwelling landlords at a much higher rate than it taxes single family homes that are used as investment properties. If we brought those two taxes to more equal level would raise as much as $130 million. We also proposed selling more taxi medallions and privatizing the Emergency Management Service collection and billing services. EMS currently bills for $165 million a year, and only collects about $40 million.

We also have to bring back to the commuter tax that would generate nearly $500 million a year for the city. Two weeks after I became speaker, I met with State Assembly Leader Sheldon Silver. He told me that he is prepared to reinstate the commuter tax if the mayor and City Council ask for it. So, we need to start with the mayor. It may take a while, but I think we are going to get the mayor to agree. We can't close a $5 billion budget by just cutting services and we can't raise $5 billion in taxes. We have to do some of both. Our problems are just too big.

Another major priority, of course, is rebuilding lower Manhattan and rest of the city.

The federal government has given the city $20 billion that can be used in a variety of ways. One of those ways is through incentives that can help keep and attract business to lower Manhattan. Lower Manhattan is the third largest business district in the country: midtown is first, Chicago is second, and downtown is third. Downtown drives the tax revenues of the city and if we don't have a strong, vibrant downtown business district, we will be in a worse situation than we now.

We must also make long-term improvements to the area that will attract people and business. Currently there are $1.6 billion in Liberty Bonds from the federal government, which are low interest rate bonds, to subsidize the creation of housing in lower Manhattan. The governor has $800 million in Liberty Bonds at his discretion and the mayor has $800 million. The governor's proposal calls for 95 percent to be used to build market-rate housing and 5 percent for affordable housing. The mayor has not yet said what he plans to do. I believe that we if are aggressive about it we can get as much as 55 percent of the Liberty Bond money for low to moderate income housing.

The council believes that we should allow for 25 percent of those bonds to be used outside of lower Manhattan, so that every part of the city can benefit from this federal money. Frankly, we are not going to get all $1.6 billion used in lower Manhattan. There just are not enough projects to get it done quickly, but there are projects around the city that can benefit from this kind of funding.

Gifford Miller is Speaker the New York City Council.
Adapted from a speech at the Women's City Club, September 27, 2002.

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