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NYC child care programs restored in $68.5B budget


NEW YORK — Mayor Michael Bloomberg and the City Council agreed on a $68.5 billion budget that restores funding for popular child care programs, while assuming the city will reap hundreds of millions of dollars in revenue from the sale of taxi medallions. 

The agreement on the 2013 fiscal budget was announced by Bloomberg and Council Speaker Christine Quinn at City Hall earlier tonight.

The two posed, shook hands and kissed each other on the cheeks in front of a room full of reporters and cameras. 

The announcement brought to an end the so-called "budget dance" where the mayor and the Council negotiate the spending priorities for the fiscal year that begins July 1. 

Quinn, who hopes to become the city's next mayor, said the budget agreement was a statement of values. "With this budget I think all of us in City Hall have made clear that the children of New York City are, without a doubt, a priority," she said. 

The budget provides fo $150 million in funding for child care and after school programs that had been slated to be cut under the mayor's initial proposal. It also includes increased education funding to avoid slashing teacher aide jobs.

City officials said they were able to restore funding to the programs by trimming the budget of other agencies and setting priorities. 

The agreement also modifies the expected revenue from the sale of taxi medallions to expand hail service to the outer boroughs to $635 million in 2013 after the plan was held up in court earlier this month.

The sale of the medallions is expected to continue through fiscal year 2015, with an overall estimated $1.46 billion in revenue.

Earlier this month, a state judge agreed to an injunction after yellow taxi fleet owners sued over the plan, arguing that it violated the state constitution because it was passed in Albany instead of in the City Council.

Bloomberg said the city expected to win the court fight and that taxi medallions would continue to be valued. "Owning medallions has turned out to be a great investment," he said. "And we think people will still want to do that."

The mayor said that if the city were to lose out on the sale "it would put an enormous hole in the budget." 

Besides the taxi medallion sale, the over $3 billion fiscal year gap has also been patched up with the $466 million from the CityTime fraud settlement and $1 billion redirected from the Retiree Health Benefits Trust.

City officials also said last night that the updated budget includes debt service savings of about $150 million and about the same amount from a federal settlement with ING Bank. 

Budget experts have warned the decision to rely on the one-time sources such as the sale of taxi medallions is risky. 

The state comptroller’s office, which is one of four agencies that has oversight of the city’s finances, said the “largest quantifiable budget risk” was the anticipated revenue from the sale of 2,000 taxi medallions. The state comptroller’s office urged the city to “develop a contingency plan” if the money were not raised.

Cuts to child care on the line in budget dance


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Mayor Michael Bloomberg presents his 2013 executive budget on May 3. Photo by Spencer T. Tucker.


NEW YORK – The Campaign for Children, a coalition that came together this year to fight millions in proposed cuts to public funding for child care and after school programs, has been holding budget vigils on the steps of City Hall since the beginning of June.

It is the kind of scene typical of the “budget dance” that goes on this time of year, when the City Council and Mayor Michael Bloomberg’s administration negotiate the city’s spending priorities for the next fiscal year -- and advocates rally to bring pressure on policymakers to spare their programs from being cut.

An agreement on the budget could be announced as early as today, though the sticking points between the two sides have been significant: besides proposed cuts to child care and after school programs, 20 fire companies could be closed and funding for libraries slashed.

“You plan on doing everything that you like to do, and then the reality brings you back, and then you do only part of what you would like to do,” Bloomberg said during a news conference May 3 to announce his proposed $68.7 billion executive budget.

A new budget must be in place by July 1, the beginning of the fiscal year.

Katherine Eckstein, the director of public policy for The Children’s Aid Society and a member of the Campaign for Children, said the cuts being proposed by Bloomberg would be devastating for child care and after school programs that families depend on.

“These cuts are affecting New Yorkers who are already struggling,” she said recently while standing on the steps of City Hall.

Fiscal policy experts say the budget dance has become little more than a choreographed show.

The mayor initiates it by proposing a preliminary budget sometime around the middle of January that includes many cuts to programs often dear to the Council’s constituents. The Council then undertakes a round of hearings on the proposal, publishing a preliminary budget response in March.

The mayor then responds with his executive budget, which is followed by another round of Council hearings that ended this year in early June. Then negotiations begin, steered by the budget teams of both sides, culminating in an agreement and vote by the Council.

The Council has the authority to restore some funding cuts proposed by the mayor for one year at a time.

Doug Turetsky, of the Independent Budget Office, said the process directs “the Council's attention to restoring funds for existing programs that the mayor knows are very popular in the council member's neighborhoods. So they have less ability to focus on maybe some new initiatives that they want to undertake.”

Maria Doulis, the director of city studies for the Citizens Budget Commission, said it also keeps the city from debating structural changes to municipal fiscal policy.

“Instead of looking at restoring some of the spending on these programs for one year, the Council should really focus on spending items that are growing at a fast pace," she said, adding that the city’s capital spending and health insurance costs in particular should be scrutinized.

For their part, the mayor’s office and Council point to on-time budgets in recent years to demonstrate that the dance, while imperfect, does the work.

The mayor’s executive budget closes a $3.6 billion fiscal year gap with one-time sources of funding, including $466 million from the CityTime fraud settlement and $1 billion in anticipated sales of taxi medallions to expand hail service to the outer boroughs.

It also redirects $1 billion from the Retiree Health Benefits Trust, meaning future taxpayers will have to float the cost of retiree health benefits.

Budget experts have warned the decision to rely on the one-time sources was risky.

The state comptroller’s office, which is one of four agencies that has oversight of the city’s finances, said the “largest quantifiable budget risk” was the anticipated $1 billion that is expected to be raised from the sale of 2,000 taxi medallions. The state comptroller’s office urged the city to “develop a contingency plan” if the money were not raised.

The sale of the medallions has been held up in court. Earlier this month, a state judge agreed to an injunction after yellow taxi fleet owners sued, arguing that the plan violated the state constitution because it was passed in Albany instead of in the City Council.

Bloomberg said at the time of the judge’s decision earlier this month that the consequences of not receiving the expected revenue from the sales of taxi medallions would be “very serious.”

There are other risks to the budget. Experts have highlighted that while the city has regained jobs lost during the Great Recession, the city’s reliance on the financial sector could pose a danger given the economic uncertainty in Europe. The city’s comptroller office called the European debt crisis “a primary threat to both the U.S. and local economies.”

Upon the release of the mayor’s executive budget, the Council said it was particularly worried about cuts being proposed to city-subsidized child care and after-school programs.

The Campaign for Children said 47,000 children would lose access to the programs under the cuts, particularly in neighborhoods with high rates of poverty, unemployment and obesity.

Speaker Christine Quinn, in a statement at the time the executive budget was released, calling the cuts “unacceptable” and that they were “being implemented in ways that create tremendous disruptions for families, communities, and providers.”

Turetsky, of the IBO, said that even though the programs are perennial losers in the budget, this year would be particularly complicated because the are undergoing structural changes.

“The cost per kid would be higher under the new format,” he said. “Even if the funding gets restored, it's not clear you would have the same number of kids being able to take advantage of the programs.”

NYCC: Whistleblower bills passed


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Councilman Daniel R. Garodnick talks about whistleblower legislation passed by the Council.
Photo by William Alatriste, courtesy of the City Council. 

Editor's Note: This version has been updated to clarify that the Department of Investigation had opposed an earlier draft of the bill. 

NEW YORK – The City Council wants to encourage employees of contractors doing work on city-funded projects to report corruption and fraud.

Legislation passed by the Council at its stated meeting yesterday would extend protections against retaliation under the current city Whistleblower Law to employees of contractors and subcontractors. Currently, the law only protects city workers.

At a news conference held before the vote on the legislation, City Council Speaker Christine Quinn called whistleblowers “courageous individuals who often end up being the most important source for uncovering fraud and corruption.”

The bill to expand the Whistleblower Law, which would apply to contracts worth over $100,000, was one of three pieces of legislation passed by the Council that would expand protections for workers who report corruption and encourage others to do the same. The bill was authored by Councilman Daniel R. Garodnick, of the 4th District, in Manhattan.

The second bill would require city contractors to post information about whistleblower protections and instructions on how to report misconduct or fraud. The third would renew the city’s False Claims Act, which offers whistleblowers proceeds of funds recouped from successful corruption prosecutions if they report information about potential fraud. All three bills would need to be signed into law by the mayor.

Citizens Union, which publishes the Gotham Gazette, lobbied for the legislation.

The city’s Department of Investigation, which investigates allegations of city-government misconduct including complaints brought by employees of private contractors, opposed an earlier version of the bill because it would have mandated that DOI investigate every complaint of retaliation by private contractor employees. 

At a hearing on April 16, DOI said such a requirement would likely lead to "an avalanche of mandatory investigations” that it did not have the resources to address.

The final version of the bill allows DOI to investigate the initial claims of fraud, but does not require the agency to investigate allegations of retaliation. Instead, the person alleging retaliation would be able to file a lawsuit. 

The city’s False Claims Act has been used “relatively infrequently since its enactment in 2005,” according to a report by a Council committee that convened April 16. Of 23 civil complaints under the FCA since 2005, the city Law Department decided not to pursue any action in 17 cases. Thirteen of the 17 cases were declined because they involved Medicaid funds, the report said. Under federal law, any recovered funds would go to the state, not the city.

“As the law gets better known … more people will use it,” said Councilwoman Gale Brewer, the chair of the government operations committee, which released the report.

Councilman Garodnick, who attended yesterday's news conference and authored the bill requiring contractors to post notices at job sites about whistleblower protections, said if passed it would go a long way toward informing people about the False Claims Act.



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