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The Mayoral Candidates on Budgets, Taxes and Spending

by Gotham Gazette Staff, Jun 13, 2005
 

Four Democratic mayoral candidates discussed budget and fiscal issues facing New York City at a forum on June 2 sponsored by the nonpartisan Citizens Budget Commission, an independent watchdog group. Participating were Fernando Ferrer, the former Bronx borough president; Manhattan Borough President C. Virginia Fields; City Council Speaker Gifford Miller and U.S. Representative Anthony Weiner.

This is an edited transcript.

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OPENING STATEMENTS

Fernando Ferrer: Budgets are always about choices, and budgets, in this city, are about our values as well--our priorities, things we think are important. The macro choices we make in budgets affect people on a micro level in every neighborhood, on every block, every day. Things like pensions, healthcare, Medicaid in particular, and the management of our construction projects really do not only affect the quality of peoples' lives on a day-to-day basis, but lay the groundwork for economic growth in this city.

I am glad to be part of this forum, because it is about choices. Mike Bloomberg has made some choices that, frankly, should astound anybody who's concerned about the fiscal health of this city. A recent court decision has made clear that his iteration of the Jets stadium will go through—at least at the court level. But it's still bad public policy. It's still an expenditure of untold hundreds of millions of dollars when this city's got to get serious about the good repair and maintenance of our subway system, about affordable housing, and about good schools without excuses in every neighborhood.

That's the kind of city Mike Bloomberg wants to build. I want to build a different kind of city. The kind of city that does have schools that stand for equity and excellence in every neighborhood. The city that doesn't squeeze the working-class and middle-class out of this city, but finds decent places for them in which to live, at prices that they can afford. And a city that doesn't preside over a transportation system that strands straphangers, literally by the hundreds of thousands, at every mishap, but concerns itself with the good maintenance and repair of the system that is an essential part of our economic engine.

Virginia Fields: One of the things that I think that we probably all agree with is the budget process in New York City takes us on a roller coaster of tax hikes and projections of huge deficits, followed by big surpluses and rebate checks, and the public, especially city workers, really don't know what to believe. Are we headed for disaster or swimming in money? Meanwhile, the Citizens Budget Commission and other experts have sounded the alarm over ever-increasing obligations, which will continue to squeeze resources for not only essential programs and services, but jobs and overall economic growth and development.

So clearly our city's budget process must be reformed. We must get off the roller coaster and into fiscal stability. As mayor, I would tackle the city's escalating obligations. I would immediately begin to pay down debt and put more of our capital budget on a pay-as-you-go basis as part of an annual plan to reduce our debt by $2.4 billion over four years, if fiscal conditions provide.

I would lower Medicaid costs by reducing the number of people on Medicaid in the first place. Let's put people to work, with good health benefits. Let's lower the number of seniors going into nursing homes. Keep them in their homes, where the costs are considerably less, as well as providing them with independence and dignity. I would strengthen the finance department to aim for 100 percent collection of existing taxes and fees. And yes, I would be a mayor with good will and credibility among labor unions, bringing them to the table, forging new relationships that benefit their work and our city's ledger sheet.

Yes, I would fight in Washington, D.C. and Albany for the funding that we deserve, but I also recognize that we must make some tough choices right here in this city. So as mayor I will take action, make our budget the tool that it should be for long-range planning to build a more prosperous city-—affordable housing, jobs, economic growth, and development among them.

Gifford Miller: When I took office as speaker of the council in January of 2002, the city was facing some very tough choices. We had just experienced, in the wake of September 11, enormous fiscal difficulties in addition to all the spiritual and human emotional problems we were facing. I was the first person in this city to talk about the need for us to grapple with the fiscal crisis head-on, to be honest about the challenge that this city faced, and that we were not going to be able to just cut our way out of the problem, we wouldn't be able to just tax our way out of the problem.

I recall that, in contrast to the approach that I put forward—which was responsible and has been very steady about the need to protect basic services but to deal honestly and openly with our serious problems--what we've had from the mayor over the last three years is more bouncing around than a ping-pong ball.

You recall him standing in the spring of 2002 before this group at their dinner, vowing seven different times that he would never raise taxes and that we could just cut our way out of the problem. All of us assumed he was doing it so that the governor could get re-elected by 30 points instead of 20 points, and that there was going to be some benefit, some pay-off, to the city of New York. And then it turned out, in the end, that [Bloomberg] got nothing for this enormous fiscal aid that he provided.

So the mayor suddenly announced, six months later, that it was the worst fiscal crisis in the history of our city. And then there was no tax that was high enough that he could raise. A year later, he decided happy times have returned again. It’s time to start sending people checks and building football stadiums with billions of dollars of taxpayer money.

My approach has been opposite to that. It’s been steady, it’s been honest with people from the very beginning. It starts by protecting programs and services that make New York, New York. I’m proud of the fact that we prevented senior centers from closing, prevented daycare slots from being eliminated, because in the end, if we don’t give our kids a chance at a good daycare, they’re not going to be fully educated human beings and parents are going to lose their jobs. If we don’t make it possible for seniors to grow old with dignity in this city, then no one’s going to want to remain here, and it’s not doing the right thing by our values and by our priorities.

If I’m elected, I’m going to maintain that same kind of commitment—the willingness to grapple with the serious problem. And we face serious problems. We have underlying structural problems that send us into fiscal crisis every 10 years. Our schools are broken, so our tax base erodes, and we can’t keep attracting businesses. We have an economic environment in which it costs too much to do business in the city of New York and a mayor who basically says there’s nothing he can do about it, and he’s not going to do anything about it except get us the Olympics. That’s not a plan. That’s a prayer. And, finally, we send $24 billion more to Washington and Albany than we get back every year. $24 billion.

We can’t continue to compete on that unlevel a playing field. We have to bring better fairness. We have to have leadership with a proven record of accomplishing things that people said were tough to do. I have that proven record of accomplishment.

Anthony Weiner: I want to join in expressing gratitude to the Citizens Budget Commission for having a forum that hopefully begins to re-focus, not only the Democratic primary, but the direction of our city on some of the fundamental realities that we all too often glibly walk past from year to year. First is that we have to start dealing with real fiscal responsibility. We are facing $5 billion, $6 billion deficits in the years to come. In fact, the mayor’s own plan concedes that in 2009 he still thinks there will be a $4 billion deficit.

We need to realize that things are not nearly as good as the mayor portrayed them to be when he gave his State of the City address in the Bronx and practically dislocated his shoulder patting himself on the back.

I gave a speech earlier this year where I laid out what my budget plan would be, and one of the important components of it was I believe that, just like a good business, every year we need to be examining what works and what doesn’t. I’m going to ask my commissioners, every year, twice a year, to tell me “What are the bottom five percent performance programs in your agency? What are the things that aren’t working as well as they should be?” And then do one of two things: reprogram it to something that will work, or eliminate it.

A second thing, hopefully, this debate begins to do in terms of refocusing is remembering the middle-class, focusing like a laser-beam on the idea that we have been ignoring the need to foster a middle-class in this city. The mayor begins to talk about the rise of property values as this great thing for the city, and it is very good for many people. But for many people it has meant that they have a $300,000 home in Sunnyside, let’s say, that now, after three or four years of meteoric growth, is worth $600,000. But for that family, you know what that means? Not that they’re going to cash in and move. They have no place to move that they can afford. What it means is that their property taxes have gone up exponentially. That’s why I proposed a 10 percent tax cut on all of those making $150,000 or less.

And the third thing, and this is perhaps the most important: no more of the same. We cannot keep doing things the same exact way. I released a report in June of 2004, a year ago, decrying the amount of debt that we were ladling on the top of our budget. And I said at that point, while everyone was trying to decide which kind of gimmicky tax-cut to give, I said let’s put at least a portion of it aside for debt, health care. I gave a speech two months ago that talked about some of the things that we needed to do to reduce the costs of Medicaid, not by reducing the number of people, but making it more efficient.

And I would agree with what all of my colleagues are saying about our need in Albany. I believe that many of our friends thought that Mike Bloomberg was going to be a reformer, comes from a different place not really party affiliated, doesn’t get his campaign funded the same way. He has not reformed our government, he hasn’t fought for us in Albany, hasn’t kept in mind the middle class. It’s been more the same. That’s going to stop in January.

CONTROLLING ‘UNCONTROLLABLE’ EXPENSES

Question: Mayor Bloomberg says that about half of the city’s spending is uncontrollable. These costs include Medicaid, pensions and other fringe benefits. and debt services. They are growing at about 7 percent a year, while the rest of the budget is growing at about 2 percent a year. Do you agree or disagree that there is little or nothing that the mayor can do about that half of the budget that he calls uncontrollable.

Virginia Fields: I do not agree with the mayor that they are uncontrollable. There are things that we can do, and that is why I talk about a plan, a debt-reduction plan, to eliminate debt within our capital budget. I talk about a commitment to use parts of a surplus to pay down debt. We can do that. I talk about the need to gain greater control and transparency of those other entities that create debt that is outside of the limit.

When we look at Medicaid again, my proposals in terms of putting people back to work will help to reduce the number of people on Medicaid. A work program. This mayor is not addressing that. And I think it is incredibly important that we have good will and credibility among our labor unions so that together we can address pension and health care services. But this mayor has been very dismissive of labor leaders. We must work with labor. We must work with our state legislators. And I think providing the leadership, the political will, we can address all four of these areas and begin to see costs reduce.

Gifford Miller: I agree with the mayor that he can’t control them, because he’s not trying. I think that’s what he means when he says that it’s uncontrollable. He’s just basically throwing up his hands.

Most of those things are driven by Albany and Washington. We are enormously dependent on our relationship with Albany and Washington. And it has to change. I’ve been talking about this since the first moment that I became speaker of the council. We can’t keep competing in an environment in which we are sending $24 billion more than we get back. It was bad enough when Mayor Bloomberg took office and it was $20 billion more than we give back.

The mayor needs to do something about this and mayors can do something about this. First, you have to acknowledge that our delegations are fighting hard for us in Albany and Washington but they are outnumbered. I think the congressman [Weiner] is doing a great job and we need him there to keep fighting for us in Washington. But he needs the support of a mayor who is going to recognize that we have to galvanize and bring together leverage points that this city has.

We are not a powerless city. We’re just acting powerless. We actually are the most powerful city in the world. We have the most powerful business community, the most powerful labor community, the most powerful political donors.

Every time I have breakfast at the Regency, there’s another U.S. senator that’s having breakfast there, having his coffers or her coffers filled up and then we send them home and he votes to take our money again. We have to change that. We have to have a mayor who is going to stand up and bring together those diverse coalitions, understand politics, understand how to get into the trenches and fight to make a real difference. That is what I will do as mayor of the city of New York.

Anthony Weiner: Every time I have breakfast at Three Star on Avenue U, I find -- just kidding. Part of the problem is that localities and municipalities and cities around the country are dealing with many of the similar problems that we are in New York City. They are trying to figure out ways to deal with the abject lack of leadership in Washington, the abject failure to come to grips with the idea that the rising health care costs simply can’t all be born by municipalities.

But that doesn’t mean you simply point at the graph as the mayor does every year and say that this is out of my control.

Let me give you a couple of examples. We are among the last localities in the country that still have hand-driven, paper-driven enrollment processes for Medicare. As a result, it probably costs us about an extra $500 million. Now we contracted in 1999 with a firm to start to computerize it. What’s happened? Where’s it been? Every year that we fail to do that we fail to do two things: one, the obvious saving you get by having a computerized system. But also our ability to weed out fraud, to weed out waste, is completely gone with the wind because we have stacks and stacks of paper.

Secondly, we incentivize the most expensive types of care. Hospital care, $600 a night? Oh yeah, we’ll pay that. Someone in a nursing home for a couple of hundred dollars a night? Oh yeah sure, we’ll pay that. But we don’t do the least expensive things trying to keep senior citizens out of those types of care.

For example, there have been programs set up in other places, and there have been programs set up by non-profit organizations that say, let’s go out to seniors, in their home, and see ways that we can make them safer from trip hazards –- broken hips are the number one reason that most seniors wind up in hospital care. And bring them in, give them nutritional care, give them exercise, do whatever it takes to keep them out of the most expensive care.

We don’t do that because ultimately Mike Bloomberg is just not a very creative leader of our city. He looks at things in a very old-fashioned way. I think this is an opportunity to start thinking about some of these almost existential problems. Maybe they’ll force us in the context of this campaign to come up with some innovative solutions.

Fernando Ferrer: I agree with the premise that, in the Bloomberg administration, these costs are uncontrollable because he can’t control them.

First pensions. Citizen Budget Commission proposes to save $2.4 billion, $2.5 billion with cost cutting, cost containment measures. An actuarial mistake has cost this city one third of that -- over $860 million. That’s about the management of our pension system.

Second, health insurance. One of the largest cost drivers in health insurance for public and private sector employees, as well as the Medicaid program, is the cost of prescription drugs. Absolutely no leadership from Republican Mike Bloomberg with his Republican colleagues in Albany and the Republican Congress over containing the cost of prescription drug. It is wreaking havoc with not only our public sector health care benefits but our private sector health care as well.

And finally construction costs. There again, Mike Bloomberg is willing to put forward, for example, $2.5 billion, which is an original estimate, to extend the number 7 line instead of considering more efficient alternatives like the two underutilized tunnels of Amtrak that go straight to the site that he proposes and connect with Penn Station, which his plan for extending the number 7 line does not.

There are more efficient ways and important ways and effective ways how to manage your spending. The alternative is, in health care, keep on making marginal tweaks to the budget so that some people are left out like the poorest of the poor and most defenseless instead of proposing important things like getting the state, which makes 100 percent of the decisions on Medicaid and yet pays 25 percent of the cost, to assume the full burden of the non-federal match and do its job to rationalize the system to avoid duplication, waste and abuse. Those are the important areas that this mayor has completely been missing in action on -- the important areas of our budget, the important areas of political and social discourse in this city.

311 AND INNOVATION IN GOVERNMENT

Question: The Citizens Budget Commission just awarded its prize for public sector innovation to the 311 program. What innovations in government, with or without technology, would you put into place if you were to become mayor and what benefits would you hope to obtain from them.

Gifford Miller: I think it’s great that you’ve given an award to the 311 program, but I think it’s a program, which really hasn’t reached its potential at all. 311 is a very good idea. It should be easier for government to respond to people so that you don’t have to figure out where to call, you call one place. But in the end, under this administration, 311 has been a way of directing phone calls better. It has not been used as a real management tool.

It has not taken the information that you’re gathering from 311 to better manage government. What doesn’t happen is the next step, which is to say, “OK, we’ve received 20,000 phone calls. Where are those phone calls coming from, how can we now better direct our resources to place them in the places. We have these pothole issues and who’s doing a good job and who’s doing a bad job?

What hasn’t happened is applying the new technology and information from this 311 program and giving it to the public, so the public can actually review this.

Over and over and over again in this administration, they have fought against the City Council when we tried to make the government more accountable. We had to pass, over the mayor’s veto, legislation to require that, on capital projects, information be reported every quarter as to their progress and how over budget they are. We had to pass, over the mayor’s veto, legislation to require that for schools, we find out where the incidents of violence are in order to put our resources there to fix them.

I would apply the Compstat approach...which would use 311 and the other information that exists now into actual government improvement by using the information that’s there to better manage our city.

Anthony Weiner: If I had a business and I opened up a complaint line and I got 5 million calls, I’m not sure I would be celebrating so much. Part of what we need to acknowledge about this administration is we give them a great deal of credit for the juxtaposition with the Giuliani administration -- we’ve become a little more relaxed, we’re not all so tense all the time -- but they have been about as close-fisted with information in this administration as they were in the last.

I ask many of you who look very carefully at budgets, very carefully at the operations of the city, when you’re done with this lunch go back to your desk and see if you can find out any data on the Board of Education that they haven’t provided you in a press release. See if you can find, for example, how much money is spent by district, how much is spent by school.

There is no reason for us not to have this type of information at our fingertips. Technology, at the end of the day, is a very formidable democratizing force. It allows people in every corner of the city to compare how their schools are doing with others. It should be absolutely, 100 percent transparent.

That’s what I would do, and I proposed this back in November. Why don’t we save the data about spending, the data about headcount, the data about population, every single piece of information you can imagine about your school, give everyone the ability to advocate on behalf of their own school?

Let’s do the same thing with test scores. In the matter of two weeks, we see underperforming fourth grade tests--we didn’t do as well as the rest of the state --dramatic drops in the eighth grade tests. Suddenly, we see fifth, sixth and seventh grade tests spiking up the likes we haven’t seen in 25 years. You’ll forgive me if I’m just a little bit suspicious.

Fernando Ferrer: There is no question that the most important technological breakthrough in this city and the most important democratic, with a small d, breakthrough in this city will be total transparency of our dealings. Putting the city’s checkbook on line would be an enormous step, but doing more than that.

Let me begin with the police department. The seven indexed crimes and those statistics by community, by precinct, are important But the other crimes need to be more widely and more clearly available and understandable to people who have access to them on line.

Information from our child welfare system, to procurement, to all the things that this city pays for, not only lends a greater transparency, and better sharing of information, but also can lead to important economies. For example, people ought to know why it would cost $1 million to build a comfort station in a park. They need to know how the process works. They need to know at every step of the process what adds cost.

When we put those things on line, when we begin to make them more available, when we begin to add functionality to them so that people will be able to get their arms around important pieces of information in a better way, we not only have the kind of transparency that governments, big d and small d democratic, should be for, but something else too: The ability of people to weigh in on the spending of their own tax dollars, the ability of people to weigh in on how those tax dollars are applied in their neighborhoods and in every neighborhood across the city.

Virginia Fields: One of the system changes and improvements I would like to see is a better tracking of the unemployed in this city. This mayor often talks about the fact that we have turned the corner. Yet every day we are still faced with chronic unemployment among certain populations, particularly African American men and Latino men. As a result of a failure to track and create much more transparent information as it relates to this population, very little is being done.

That is why I talk about creating a deputy mayor for employment to look at ways we can coordinate all of the relevant resources and services for putting the chronically unemployed back to work. Without tracking, monitoring, making information available, it is creating almost an out-of-sight, out-of-mind population. And of course the benefits of putting people back to work will greatly increase our economic growth in this city.

PAYING FOR THE SUBWAY

Question: I would like to ask you a question about our subway system and how hard it is to expand it. For the first time in 25 years, the state is not coming up with enough money to provide for basic system upkeep and the Metropolitan Transportation Authority’s borrowing capacity is tapped out. What should the city’s role be in financing the capital needs of the subway system? Specifically, should the city resume the use of its capital budget for this purpose and how should it target its expenditures?

Anthony Weiner: First of all, there’s almost a direct relationship between the decline in the city and state participation in the budget of the subway and bus system and the increase in the problems that we have had in service. It’s not mysterious. We went from a period in the mid 80’s, late 70’s to mid to late 90s where we were getting better and better and better. Anyone who knows anything about the city would say our subway system is worlds better than it was when I was growing up.

But it also means that you cannot simply step back and say now is the time to stop with our contributions, which is why the amount of debt that we have been wavering onto our municipal budget has been irresponsible.

We’ve got to follow the Clinton model. There are times when the economy is slow, when money is cheap. It is reasonable to invest in capital expenditures if for no other reason than that’s the best time to do it, you create jobs and the like. But now we are going through, theoretically, a better time where we have surpluses in the $3 billion some odd range yet we have an arch in every budget document toward a doubling of our debt burden.

We should not accept a budget as being successful if it doesn’t do a couple of things this year. It should pay down a substantial portion of our debt with that added money and, two, it should have lower head counts than in the years past. Only then will we be able to increase the investment in the subway system or anything else. We have to stop with this fiscal unreality of saying, “Well let’s keep doing things the same way. We have a surplus this year, let’s just roll it over to paper over some of the problems we have coming up next year.” That’s not the way to do this.

If there is something good about the back and forth of a campaign, it’s that moments like this help us focus on what the long-term plan is for the city. What is Mike Bloomberg’s long-term plan? Well I can tell you what his short-term plan is: In the next 5 years to double the amount of debt being passed along to our kids and grandkids.

Fernando Ferrer: Probably one of the biggest--and I wouldn’t say lost opportunities, I would say thrown-away opportunities—[has been]to get for our subway system a nearly billion dollars of needed revenue to make investments in station, tracks, switch and relay, repair, replacement and upgrade. This, by the way, has an impact on every business in this city, whether we want to recognize it or not.

The loss of the revenue for the development rights over the Hudson yards is probably the largest dereliction of duty I have seen in a long time. It is gargantuanly bad public policy. MTA transparency would be helpful here too -- how they spend their money. There are choices that are important for us to discuss. Seventy fewer toll booth agents, or 70 fewer public relations professionals at MTA headquarters? I pick the token booth agents.

Ask any woman who takes a subway after the fall of the sun on the way home, and she wants to see -- we all want to see, if we are husbands and brothers and sons–-token booth agents there. Ask cops who try to keep us safe, they want to see them there too.

This is about the transparency of the MTA. It is about the transparency and the promotion of good policy for this city. When we go for a sweetheart deal, that gives away the development rights for literally pennies, that is just awful public policy and it’s got to be called that.

Virginia Fields: Since roughly about 1993, the city has not paid its share. And as a result, we are seeing deterioration of our system. Since the very tragic events of 9/11, I cannot think of a better investment for this city to make than to make sure that our subway system is safe, is secure, and that it is providing the opportunity for us to grow our economy, making sure that riders are going to be able to use a safe and secure system to move throughout the city.

It is about investment. It is about the city taking its share of responsibility, and as mayor I will restore our obligations to ensure that we have the best system possible. At this time, we do not. We continue to see breakdowns daily, commuters are being interrupted in terms of being able to travel from their homes to work, and a lot of it is due to the lack of investment, not only at the state but also the city.

Gifford Miller: There is good debt and bad debt. There are some things that are worth borrowing for, because they are good investments for the city, like schools and like subways, and there are things that are not worth borrowing for like football stadiums. And even when you are borrowing, there are good ways to borrow and bad ways to borrow. Just an example, in the Clinton-Hell’s Kitchen rezoning that we did I forced this administration to completely recalibrate the way they wanted to borrow for the investments in order to create that economic development, which is a good opportunity for the city, in a way that in the end, lowers the cost of the borrowing by about a billion dollars over the life of those loans.

One of the things the Citizen’s Budget Commission talks about a lot is that there are better ways to borrow in the city. We do not efficiently use our borrowing capacity to make sure that we are getting the lowest interest rate loan possible and that we are appropriately stewarding the public first.

With regard to the subways, this is a good investment for our city because it is a huge economic development issue, because it is what makes the city livable. We sit on a subway and we hear that voice that sounds like it’s from a Peanuts cartoon telling you it's an unavoidable delay, and you know it’s not unavoidable, it’s only not being avoided because no one has bothered to fix signals that are almost 100 years old.

As mayor I would restore the city’s commitment to the capital plan. But in truth that’s not very much money. It’s about $100 million. It’s not enough money to fix our subways’ problems. It’s almost, in the end, a leverage point.

More broadly we need to have a plan to really fix our existing subway system, and that means developing new revenue in order to do it. A stable stream of revenue, which backs bonds that are good investments, is an appropriate thing for our city to go on. We are ought to reinstitute the commuter tax, which I think commuters would be willing to pay for if they knew that it was going directly to mass transit services that they use every day. That could give us $5 billion a year worth of real money that could fix our subway system now so we don’t all have to sit on trains forever and not get the service we deserve.

THE TAX BURDEN

Question: Most of us believe that New York City’s tax burden is very, very high, compared to other jurisdictions. In speaking about this, Mayor Bloomberg has likened New York to a luxury good, saying that while taxes are high, New York offers so many advantages that it offsets this high tax burden. Do you think that New York City's taxes are too high, and if so, what taxes would you give priority to cutting and how would you pay for it?

Fernando Ferrer: There’s another burden in this city. The burden of a good memory. I have a good memory. I remember when a guy named Mike Bloomberg stood on the floor and said, “I will not raise taxes,”--in 2001, when everybody who was sentient had a sense of what this city’s fiscal condition was. That needs to be said, because anyone who says that they’re going to lower taxes without an alternative stream of revenue is a fool or a liar or both.

Here are some facts: Our property tax is far too high. We ought to find ways to bring that down. That affects not only owners and renters, but consumers as well.

Our sales tax is far too high. That is a job killing tax that sends retail jobs right across the Hudson River. Anybody who has got a car and an EZ Pass will be taking advantage of it to the detriment of the collection of New York City sales taxes, to the detriment of New York City residents being able to earn a living.

We have got to find ways how to make business taxes more rational and more transparent. For example, our tax incentive policy is the taxes we forgo. We give [incentives] pretty generously to corporations who threaten to leave all the time. I believe one of the ways we begin recapturing that is indexing those incentives to the actual number of New York City residents’ corporations employ. If we can’t have for some bizarre reason a commuter tax, let’s have it that way.

Virginia Fields: Indeed our taxes are too high. When we look at the combined tax rate for businesses, city and state, we have perhaps the highest in the nation. and that directly affects our ability to attract as well as retain some of the businesses in New York City. So in order to be competitive, we must look at this.

Depending on fiscal conditions, yes, let’s reduce property taxes, an extreme difficulty for many of our homeowners. Let's reduce businesses taxes across the board. But again I preface that by making sure that fiscal conditions enable us to do that. Otherwise we will simply be taking away revenue, preventing us from stabilizing our budget in a way I believe we must do first.

Gifford Miller: When Mike Bloomberg gets up and says that it doesn’t matter how much it costs to do business in the city of New York, it’s not only damaging because he has been putting into place policies that reflect it, it’s damaging because businesses in the city want to know that they have a mayor who understands what they are struggling with -- particularly not the large businesses like his business, but small businesses who are creating jobs and opportunities for New Yorkers.

We do need to do something about. We can’t just talk about it. We have to have a specific proposal on how to pay for it. I would lower businesses taxes by treating everybody equally. Insurance companies in this city pay no general corporate tax. Everyone else pays a corporate tax rate. Insurance companies pay nothing. That’s ridiculous, and no one has given me a good reason why. I would assess insurance companies at the same rate as everybody else, which would allow me to lower corporate tax across the board by five percent.

That’s a specific proposal that could lower taxes considerably and meaningfully and send a very clear message that the mayor of the city of New York does care about how much it costs to do business in the city of New York and we’re going to do something about it.

Anthony Weiner: I mentioned this in a speech I gave. I’ll summarize it.

One, a 10 percent tax cut for anyone making less than $150,000 a year. An income tax cut, the most progressive way to reduce tax burden, the way that reaches the most people, that would cost about $206 million. A seven-tax bracket, to make the income tax more progressive on those making more than a million dollars a year. It simply says that if you make $500,000 a year and $1,500,000 a year you should not make the same tax cut. It makes it more progressive by adding that tax bracket. That would raise us an additional $79 million.

So far, I've outlined tax cuts that are more than two and a half times the amount of the tax increases. But the third part is important. I am committed to instructing my commissioners twice a year to assess every single thing we do in the city. Everything from top to bottom. No agency is spared. And say the bottom 5-percent-performing programs, say we’re either going to cut you or reprogram you if you can’t justify why things are not getting better.

And let me just say one final thing. We have to start fighting a little bit more to get things from Albany. We have over 1,000 buildings owned by the state in this city. We don’t apply taxes to any more than 12 of them. Why 12 and not 1012? It’s a mystery but it’s a $1.5 billion mystery.

IMPROVING PRODUCTIVITY, NEGOTIATING WITH LABOR UNIONS

Question: Mayor Bloomberg has sometimes stated as a policy on collective bargaining that future raises be conditioned on productivity improvements. The Citizens Budget Commission believes that collective bargaining negotiations are an opportunity to reach agreements on how to transform how the city does business and get rid of antiquated work rules. What would your policy be on negotiations with the city’s labor unions?

Virginia Fields: Productivity savings can indeed generate much needed revenue. However, it begins with goodwill, and one of the things that this mayor has failed to do is to create goodwill in terms of negotiating and bargaining with labor leaders. The failure to really sit down, bring them to the table, come to a win-win, is costing the city tremendous delays in negotiating contracts. As a former chapter chairperson of a labor union, I know it is possible to get to a win-win, so I begin goodwill, outreach, let’s get the job done.

Gifford Miller: Goodwill is important, but in the end it is about relentlessly negotiating on behalf of the interests of the people of the city of New York. That doesn’t mean that every single point of contention between the union and the city is actually a point of contention. There are points in which there can be common agreement. Productivity increases can be one of those points if you understand how to negotiate and how to create an outcome.

Unfortunately we have with this mayor someone who’s not interested in either of those things. There’s no [teachers’] contract. The reason? The mayor wanted somebody to be able to blame for his failure to fix the education system. What’s going to happen-–and everybody in the system knows this--he’s going to offer them a contract, so right before his election he can say, “Well now I’ve removed the last remaining obstacle and now I really can create improvement.”

This is a mayor who has not used the opportunity that he has to relentlessly negotiate on behalf of the city of New York, and the result has been that we’ve made very little progress in our contract negotiations in the last three years.

Anthony Weiner: I think I’m going to be pretty tough. I’m going to work very hard to wring out productivity wherever I can. I’m going to see budget negotiations as a chance to do it. But I’m going to have a respectful conversation with the labor force in this city and I’m going to have it with people in this room as well.

I want to transform this city. I want the city to be able to move forward to the next century, the next generation. We see transformational changes through the economy, we’re seeing it in business, we’re seeing it everywhere. It’s got to happen in the City of New York.

But I’m going to do it in a different way than Mayor Bloomberg’s doing it. I’m going to use the bully pulpit of the Blue Room. I’m going to go out and campaign in order to get some of these concessions, but I’m never going to allow it to be a substitute for going behind closed doors and respectfully negotiating. My commitment to the middle class includes the idea that many of the workers for the city are not liabilities on a chart, like Mike Bloomberg sees. They’re assets. They’re my middle class. They’re the people who I care about. But that doesn’t mean I’m going to be a pushover. I may not look like much, but I can take care of myself.

Fernando Ferrer: Let me give you two examples: Our police department currently is not doing one job anymore. It’s doing two--keeping us safe from domestic criminals and keeping us safe from international criminals. They’re doing it with about 3,000 fewer officers than at the end of 2000. One way to get more cops on the street, given the fact that the Bush administration ended the COPs program, which was a federal program to pay for our cops, would be to increase civilianization.

Let’s talk about the teachers. A year and a half ago, the head of the teachers union, in response to a demand by the chancellor and the mayor that we have an eight-page simple contract, said, “Let’s pick 100 schools right now, we’ll pick them together, we’ll pick the low-performing schools. We’ll do that contract, and let’s have an experiment we can all evaluate and measure.”

As mayor, I would have taken that offer in a heartbeat. It would have begun one of the most important experiments in education in this city in over four decades.

These two areas at least are two areas of single failures in the Bloomberg administration to take advantage of resources already in our hands that will give us the ability to manage this city more effectively.

FUNDING THE SCHOOLS

QUESTION: As mayor, what would be your approach to bring the Campaign for Fiscal Equity suit on funding of education in New York city to a successful conclusion?

MILLER: This is one of the most important moments in our city’s history because this decision orders an additional $5.6 billion for the city a year to transform our schools if we have a mayor who goes out and gets it. We have a chance, if we use that money wisely, to transform our schools. If we pour it into the same programs that this mayor has been focusing on, the same bureaucracy, we will waste billions of dollars, we will drive our tax base away, and we will tell generations more of the city’s children that we’ve lost.

I would focus on two things. One, smaller class sizes. I’ve laid out a specific plan to reduce class sizes to 17 kids in a class, kindergarten through third grade, by just leaving the personal income tax surcharge on people making more than $500,0000 a year. This could form the basis of putting some money into the Campaign for Fiscal Equity. We need to put something up, because while I agree it should be zero, it’s not going to be zero. And it’s too important for us to get something for us to just turn it down.

So, lower class sizes and top quality teachers--pay teachers more competitively, pay them more to teach in low-performing high need schools and also transform the career track for teachers so we have novices, tenured teachers, and master teachers and becoming tenured means something. I’ve laid this out in a comprehensive commission report, which I appointed, and I think that that is the direction we need and probably the greatest challenge that our city faces today.

Anthony Weiner: Part of what I’ve argued in this campaign is that when it comes to being the mayor of the City of New York, being active and aggressive is fundamentally a better place to be than being passive. Mike Bloomberg has made the argument time and again, sometimes directly, sometimes euphemistically, you get more with sugar than you get with vinegar. We have learned through the negotiations over issues with the governor, whether it be Ground Zero or the fiscal equity suit, that is not the way you play this game.

This is a lesson for how you do things: After this year’s election, I'm going to be a pretty popular guy with anyone running for governor. And anyone who comes to me and says, “Mayor Weiner, I need your help getting elected and making me Governor Spitzer, or Governor Suozzi or Governor whoever.” The absolute criteria for my support is not what your party affiliation is, it’s whether you have my constituents, the residents of the city of New York, at heart. And my bargaining position and my final position is, “We’re not paying. This is Albany’s shortcoming. You fix it.” And if they don’t walk out of my office and stand next to me and say, “I’m committed to that position,” they don’t get my support. That’s how you engage in politics. What Mike Bloomberg doesn’t know about doing this can fill a book.

Fernando Ferrer: The elephant in the room in improving our schools and coming up with the $23 billion prescribed in the court decision is how we come up with the city’s portion of it. Mike Bloomberg’s approach stated by the chief legal officer of the city, the corporation counsel, is if we have to come up with anything and – I quote – “No thanks.”

No thanks to $9 billion to modernize old school buildings? To build new ones, to really reduce class overcrowding? $14 billion to improve teaching and learning and give our city school kids – all 1.1 million of them – the same thing that every kid gets in every suburban system around our city? That was the reason for the lawsuit.

If you paid attention carefully to the legislative leaders of this city they have said, clearly, the city will have to come up with between 20 and 25 percent of the $14 billion in operating funds in order to access the rest of it.

I’ve come up with a way to do that. It’s a stock transfer charge, one tenth of what used to exist in 1981. Now if anyone has a better way of coming up with over $3 billion to do that, let’s put it on the table. Let’s have an open, honest debate because this is about the future of this city.

And if anyone believes that improving our system does not pay huge dividends to our economy, then we’re not thinking clearly about the future of this city. People will leave this city if we graduate kids who cannot compose a standard English paragraph, cannot compute, cannot reason, and cannot compete in this increasingly complex local, regional and global economy that is New York City.

Virginia Fields: The same kind of passion, determination, tenacity we have seen this mayor use to fight for a stadium on the West Side of Manhattan is missing when it comes to fighting Albany for funds for our schools. That is the kind of determination that is needed, and as mayor, I will provide an active and aggressive leadership to come up with a workable plan.

I would use the moneys to implement my plan called simply SMART: smaller class sizes, massive interventions at the earlier levels, academic partnerships with our universities, recruitment and retention for teachers as well as technology and tutorial help. We can do it. We must do it. We cannot afford to lose another generation plus of children.

QUESTION: Mr. Ferrer, what makes you think that $3 billion is not a sufficient incentive to cause the stock transfer business to move across the river?

Fernando Ferrer: Some have argued, the mayor has argued, that we will lose 10,000 jobs. I argue just the opposite. Businesses will leave if we don’t make these investments...I remember when the stock exchange threatened to move across the river if it didn’t get a billion dollars in joint subsidies from the state and the city. Do you remember that? I do. It didn’t and it didn’t.

Anthony Weiner: You’re right about the impact but I’ll tell you who it’s going to have an impact on-–not the very well-to-do stock barons. It’s going to be the people who do the trades, the people who support the stock market. Middle class New Yorkers are the ones who are going to pay for this.

I just have to tell you, Borough President Ferrer, every time you say we’re going to put in $3 billion, [Senate Majority Leader] Joe Bruno says $5 billion, then he says $6 billion, then he says $7 billion. We have to understand, we have to be completely unified with our position here and that is they shortchanged us. The moment we start negotiating against ourselves by saying, “Well, you got to put in $3 billion, next week it will be you have to put in $4 billion and $5 billion and $6 billion.” Our position should be we don’t put in money because we’re the ones who have been victimized. Mr. Ferrer, you’re 100 percent wrong.

Fernando Ferrer: Then let’s have a real debate about this. If you think zero is a sound negotiating strategy, that has gotten us exactly zero. And it will continue to get us zero. Read the court decision carefully and listen very carefully to the legislative leaders. Yeah, we have to have a hard bargain, hard negotiation about this, but at the end of the day it’s got to be more than zero for our city’s school kids.

Gifford Miller: Let me jump into that. The stock transfer tax is the wrong idea partly because it’s not sustainable. And in this electronic age, it’s too easy for the exchange to move.

I certainly agree with Borough President Ferrer that we have to be honest about the Campaign for Fiscal Equity decision. It clearly stated, the judge has said, the city is going to have to come up with something. Pretending that the city is not going to come up with something is exactly how we’ve gotten to the point where we’ve gotten nothing through this mayor’s entire tenure-- nothing, zero. We didn’t get any money for the capital budget. We didn’t get any money for the operating budget. As speaker of the council, I have to look these kids in the eyes and say, “You know what? I can’t do anything for you because the state isn’t coming up with the money.”

At the end of the day, we have our own responsibilities and that’s why my proposal, which is to just leave taxes where they are on people making more than $500,000 a year, to pay immediately to reduce class size makes sense right now. That’s a good place to start and that’s a sustainable level for us to have out beyond the four years.

And that puts us in a place where we can have the discussion, which is, “We’re not going to keep pointing fingers at each other. It’s time for all of us to step up to our responsibilities because we cannot have a system where half of the kids are not meeting basic standards.”

Virginia Fields: While these are indeed good places to start, I think we’re also overlooking the fact that, although not sustainable in the term of revenue, we have a surplus. Let us take a portion of that to begin in September as far as getting started. What I have talked about – and I think it is critical – is that we do a complete audit of this $14 billion education budget in terms of exactly how dollars are being spent. Our comptroller, the city comptroller has said, that we don’t know how dollars are being spent within the existing budget. So I think as we look to establish fiscal stability, as we look to address some of the concerns that we must also be responsible for, these are some of the ways we can look to get started.

CLOSING STATEMENTS

Anthony Weiner: I appreciate the chance to share the stage again with my three colleagues. They are, as I’ve said many times before, leaps and bounds better than the incumbent. I would sprint to the polls if one of them was the nominee, but they’re not going to be.

I grew up in New York, a middle-class kid, love this city, I don’t have many marketable skills but what I have I’ve put toward working in the City Council, working in Congress. But I do have a vision of the city.

Are we going to keep doing things a similar way that we’ve done them before? If we get a surplus, we celebrate, roll it to the next year and paper over some of the challenges we face.

One of the things the Citizens Budget Commission has done an extraordinary job at is helping us look a little bit around the corner. I have to tell you the incentives for elected officials to think about things that redound to our benefits in 10 or 15 years are not very strong. We’re told essentially to get to the next budget, get to the next election.

Election time should be different. This is a time we should be talking about four years, eight years. Let me see one of those gauzy 90-second ads for Mayor Bloomberg talk about how you deal with some of these problems. I’ve laid out in a substantive way what my proposals are. I welcome the chance to engage any of my colleagues or the mayor in a discussion about which way is better. But we cannot keep whistling past the graveyard and saying, “You know what? Things are great. Let’s just keep going like this."

We have an obligation to do for our children what our parents did for us, which was leave a better city, stronger city. You know you read biographies of mayors gone by, read the book that’s out now about the Bronx is burning, you realize how much better a city we have now than we had a generation ago on just about every level. What are we dong today to make sure we’re doing that for the next generation? If that’s your agenda, I’m going to need your help in the next four years.

Fernando Ferrer: This is a forum about the future of New York and how we make it a fairer and better future for every New Yorker in it. I don’t believe this is a city–-all 8.1 million people--who want to be treated like a wholly owned subsidiary of Bloomberg, Inc. I don’t believe in Mike Bloomberg’s vision for the city--building a playground where only those who can afford the high privilege of a personal seat license would prosper. I believe in growth, and he confuses that with growth

Let’s talk about the kind of city that will lend itself to growth. The kind of city I want to build has good schools in it, schools that stand for quality and excellence, not just in some neighborhoods, but in every neighborhood. A city that gets serious about affordable housing so our middle class and working class aren’t squeezed out of this city. A city that gets serious about the maintenance and good repair of our subway system so it is reliable and affordable in the long term. A city that works better for everybody.

That’s the kind of city that I believe is not only worth fighting for, but for me it is a cause because I know the power of a good education in my own life. I know the power of having a decent place to live and a place that you can afford in my own life. I know the power of a good after school program that kept me off a pretty tough street as a fact in my own life. That’s the kind of city I want to build for the generation of New Yorkers yet to come.

Virginia Fields: My vision for this city, which allows us to address the priorities that impact our daily lives including affordable housing, good schools, jobs, healthcare, all of this is directly related to getting off of this roller coaster and creating fiscal stability. That’s why I have talked about my efforts to move forward in reducing debt, making sure that we address issues of Medicaid, putting people to work, keeping seniors out of nursing homes, which are more costly, working with labor and our state legislators to address issues of pensions and health care.

We can do that but it requires a mayor who’s going to take the action and has the political will and is concerned about everybody in this city. Putting people back to work, the chronically unemployed. We’re going to have to look at growth industries, but to be able to move toward creating that growth we have to make some critical decisions. That’s not happening with this mayor.

Many people who elected this mayor elected him because they felt that he was--he is--a businessman. Well, we’ve seen some of the highest tax hikes since he has been in office, the highest user fees since he has been in office, and little or no attention given to the priorities that affect our daily lives.

I want a different city and, as mayor, I will lead us forward using the tremendous knowledge and experience that I have gained over the last 16 years as an elected official, including eight years as a city councilmember and now in my eighth year as president of this borough of Manhattan. We can do it--we must do it--in order to insure that this is a city where all of us would want to raise our children.

Gifford Miller: Being mayor is about making tough choices. The challenge for voters in this city is they are going to have to decide who is it that is going to be able to make those choices that we talked about today. I think that I’m the candidate because I’ve already been making the tough choices. I’ve closed billions and billions of dollars worth of gaps, I’ve cut $3 billion out of a budget over the last three years,

Every single proposal that I’ve made for the future, whether it’s lowering class size, cutting taxes for small businesses, I’ve paid for because I’m the speaker of the council. I don’t have the luxury of saying I want to cut $1.7 billion out of the budget. but I’ll tell you later what it’s going to be. I’m going to tell you now.

I love this city. We all love this city. And I want a better future for my children and for everybody else’s children. I’m not going anywhere. We’re gong to stay here and fight for it but we have to acknowledge we’ve got real challenges that need to get fixed. We have a school system that’s failing half of our kids. We have an economy that is being held back by the cost of doing business in this city. We have a situation in which we’re sending $24 billion more to Washington and Albany.

All of those things have been the same for the last 10, 20, 30 years in different forms. The question is who has the leadership, who has the proven ability to tackle the kinds of things that people haven’t been able to solve for decades. I think I’m that candidate because I’ve proven that I have that ability.

People told me , when I took over as speaker of the City Council, that we’d never be able to bring together a diverse legislature and deal with anything, I’ve proved them wrong. They told me we wouldn’t have a living wage bill in this city, it would destroy everything. I’ve proved them wrong. We couldn’t have a lead paint bill in this city–-it would drive the costs of housing through the roof. I’ve proved them wrong. Over and over again in my career, I’ve never listened to the people who tell me what I can’t do. I’ve gone out and done what needs to be done. That’s why I’m running for mayor.

 




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