Paros Apostolopoulos, an employee at a pastry restaurant on Third Avenue in Bay Ridge Brooklyn, is used to hearing customers complain about teenagers who hang out in and around his shop.
“One time I had a table at the restaurant next door kids were so loud and the language so bad that the older couple just left. It could be nice if they had something else to do, some activities,” said Apostolopoulos, who has worked at the restaurant for two years.
Parents ask restaurant employees not to not to allow their children to be at the restaurant when they should be in school. But Apostolopoulos and other owners and workers at businesses along Third Avenue worry mainly that the young people will drive away other customers and hurt business.
Their concern is shared by establishments on Bay Ridge’s other commercial strip -- 13th avenue from 69th to 78th streets – and by stores and restaurants around the city. The issue has been discussed by Brooklyn’s Community Board 10, which includes part of Bay Ridge, Dyker Heights and Fort Hamilton. Regardless of whether the young people have a right to hang out, their presence can create a problem for businesses.
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“We get complaints about large groups of kids hanging out on the commercial strips,” said Josephine Beckmann, district manager for Community Board 10. “The complaints range from late night noise to acts of vandalism like graffiti.”
Ada Lin, an employee at Fujiyama Japanese restaurant on 73rd Street, said kids as young as 13 years old hang out in front of their store after school hours. Once, the owner called the police because he was worried that the young people might keep customers away.
“They treat the restaurant as a playground,” she said. “I don’t think there is another place that has more kids. But if they had more stuff to do, like activities for kids, I think they wouldn’t hang out here.”
Later at night, Rosa Pizzeria on the 13th Avenue stretch becomes a favorite and popular place for teenagers. Although this does not bother the employees, residents complain about the noise.
Brooklyn Community Board 10 has tried to find way to keep the teenagers occupied with age-appropriate activities. Beckmann said that the district has a program for middle school students that is open three times a week.
However, an afterschool program (see related story) aimed largely at younger students, at PS 170, faces cutbacks. Because of reductions in funding, the program which serves 220 youngsters, will have to reduce its slots for 60 to 80 youngsters, according to Christie Hodgkins, director of after-school services at CAMBA, which runs the program. In addition, a movie theater and bowling alley in the neighborhood have closed.
In response, the community board has voted to ask the parks department to allow teens to use two neighborhood parks with supervision at night “These programs are really needed in the district and in the neighborhoods since kids are looking for activities,” Beckmann said.
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The city’s $59 billion FY 2008 budget is a remarkable document: full of good news for city property owners, bad news for renters, discouraging news for those hoping for real tax reform and uncertain news for long-term budget stability. Given the nearly $6 billion in extra tax revenues and other resources that became available in fiscal 2007, there should have been more good news to spread around.
Ironically, the huge city surplus may have served to further erode the City Council’s role in the budget process. Much of the extra revenues generated in 2007 went to pre-pay billions of dollars in debt service that are not due until 2008, 2009 or 2010. These one-time payments left little money for expanding social services and other government program.
Much of the rest of the money went to a narrowly targeted property-tax cut. Because the 2007 surplus had grown since April’s executive budget, the mayor and City Council at the last minute decided cut the property tax rate more than originally planned -- upping the reductions in the average property tax rate for residential and commercial property owners from 5 percent to 7 percent.
That will cost the city an additional $300 million, bringing the total expense of the cut to $1.05 billion in 2008 -- and more in subsequent years. In addition, the mayor and council extended the $400 rebate for homeowners, costing more than $250 million. They also eliminated the city sales tax on all clothing -- not just items priced at less than $110 as had previously been the case -- at a cost of $110 million.
The mayor rejected the council’s proposal for a modest $300 tax rebate for the two thirds of New Yorkers who are renters, a cut that would have cost $261 million. The plan would have been a small step toward reversing the burden that the last 25 years of property tax politics have placed on renters. For instance, according to an Independent Budget Office report, the median household income of renters in 2005 was $33,904 -- just over half the median income of $66,000 for people who own their homes.
Ironically, even for homeowners the property tax relief may not be everything its supporters would have liked. Press coverage showed that most, if not all, residential owners will still pay more in property taxes in 2008 than in 2007. The confusion stems from the bizarre assessment structure of the city’s property tax system, detailed in the Independent Budget Office report.
The budget also missed an opportunity to help low-income New Yorkers, either with substantial new services or a break in their income taxes. The budget does include a modest child-care credit. But the Independent Budget Office points out that some 167,000 low-income New Yorkers will still pay the city income tax, although they pay no state or federal income taxes. Some 94 percent of these taxpayers have household incomes between $20,000 and $50,000, with most in the $20,000 to $30,000 range.
And, for all the cooperation between the City Council and the mayor the past year, the council seems to have gained little more than in previous years. It again had to focus on “restorations” of council programs cut by the mayor in the executive budget ($266 million this year). Yes, a few programs were “base-lined” into the mayor’s four-year plan, but the great bulk of this year’s restorations remain subject to mayoral discretion another year.
Much like former Mayor Rudy Giuliani and City Councils in the late 1990s, Bloomberg and the current council continue to ignore long-term budget stability. The pre-payments and property tax cuts in the 2008 budget help create an estimated $3.4 billion deficit in 2010 and a $4.3 billion deficit in 2011.
But, with the term-limited mayor and council leadership leaving office in December 2009, any 2011 deficit will be the responsibility of others.
As the state Financial Control Board has noted in its May 31 report on the executive budget, this year’s big surplus is largely the result of a phenomenal year on Wall Street. In calendar year 2006:
· Security industry profits were $20.9 billion; · Wall Street bonuses were $25.5 billion; and · Capital gains realizations reached $38.9 billion.
These big profits, bonuses and gains brought in an unanticipated $1.9 billion in business income taxes and over $700 million in personal income taxes. In addition, in the booming real estate market, taxes on property transfers and the recording of new mortgages were over $1.4 billion more than projected in June 2006. At the moment, no one thinks these numbers will be repeated next year.
But huge budget surpluses are hardly new. Although Rudolph Giuliani had fiscal problems in his first years in office, he later enjoyed successive budget surpluses. For the four fiscal years 1998 through 2001, Giuliani budget surpluses totaled nearly $11 billion, or about $2.7 billion a year:
* FY 1998: $2.1 billion
* FY 1999: $2.6 billion
* FY 2000: $3.2 billion
* FY 2001: $2.95 billion
Each year Giuliani and the council used the one-time surpluses to pre-pay a large part of the following year’s debt service. A 1999 cut in the personal income tax (reversed by Bloomberg in response to the 2002-2003 budget crisis) cost the tax base over $500 million a year.
But the surpluses did not go on indefinitely. Recently Bloomberg has suggested that Giuliani left him with, as the New York Times put it, “a huge budget deficit” when Bloomberg became mayor in January 2002.
Indeed, Giuliani did contribute to Bloomberg’s fiscal problems through his use of one-time surpluses and tax cuts. Giuliani’s last budget used a nearly $3 billion surplus for 2001 to balance 2002’s budget. That left Bloomberg vulnerable to the terrible human, economic and fiscal impact of events in the next year: a growing national recession and, of course, the effects of the September 11, 2001, attacks.
For the last four Bloomberg fiscal years, budget surpluses -- using Bloomberg’s definition of “surplus” -- have totaled about $14 billion, or $3.5 billion a year, according to the office of the city comptroller and the city Office of Management and Budget.
* FY 2004: $1.9 billion
* FY 2005: $3.5 billion
* FY 2006: $3.8 billion
* FY 2007: $4.7 billion
Bloomberg, like Giuliani, has used each year’s surplus to pre-pay large parts of future debt service. Unlike his predecessor, Bloomberg has spread the pre-payments over two future years (and, as noted above, a third year in the 2008-2011 financial plan). Another difference is that Bloomberg’s tax cuts are considerably larger than Giuliani’s, reducing the city tax base by $1.3 billion dollars in 2008 alone.
By some calculations, Bloomberg’s surpluses are actually even higher than he says they are. He does not count the $1 billion used to fund a new retiree health benefits trust and the $1.25 billion used late in 2007 to retire debt early as “surpluses.”
If those two actions are included, the Bloomberg surpluses are $4.75 billion in 2006 and $5.9 billion in 2007 -- or 12.5 percent and 14 percent of city funds.
This means that a substantial chunk of the budget-- as much as 14 percent -- is not subject to the May-June budget process. The mayor decides to spend these surpluses throughout the fiscal year. Although the City Council technically must approve his decisions, the councils in both the Giuliani and Bloomberg eras have been reluctant to challenge the mayors’ decisions.
By state law the city must spend any surplus before the next budget begins. In an effort to do that and still safeguard the city against further fiscal crises, Bloomberg put aside, or saved, $2 billion through the retiree health benefit fund in 2006 and 2007. Another $500 million will go there in 2008. Fiscal monitors applaud those moves, but the mayor rejected the City Council’s effort this year to create a real rainy day fund, which would give the legislative body some say in how surplus funds are spent.
Bloomberg’s surplus strategy is essentially quite conservative -- at least politically -- in two senses. First, using the surplus to prepay debt service means the money will not be available for human services of equivalent value. Second, the mayor’s tax cutting strategy benefits big firms and higher-income New Yorkers much more than low- or middle-income New Yorkers. At the same time, the failure to solve long-term budget deficits means the strategy ignores a conservative fiscal goal of setting the structure for balanced budgets in years to come.
A structurally balanced budget requires a long-term, consistent, and adequate tax base that matches long-term projected expenses. A progressive budget ensures that the tax burden is fairly distributed and that expenses provide comprehensive public services. The 2008 adopted budget is neither structurally balanced nor progressive.
The huge surpluses -- and the inability of a Democratic council to play a countervailing role in the political and fiscal decisions about how to use the money -- suggest that both term-limited mayors found and used a structural weakness in the city’s budget process. Giuliani’s decisions contributed to a monster fiscal crisis within a year of his leaving office. The city can only hope that Bloomberg’s successor has better luck.
Glenn Pasanen, who teaches political science at Lehman College, has been in charge of Gotham Gazette's finance topic page since 2001.
The City Council overwhelmingly passed sweeping changes in the city's campaign finance system, despite reservations by several council members on the bill's approach to public financing and its exclusion of unions from the caps on campaign contributions. At its stated meeting June 27, the council also approved an overhaul of the city's building code, an exemption for small business establishments from billiards regulations and a measure more strictly regulating the placement of clothing bins on public and private property.
The City Council's campaign finance bill attempts to put more emphasis on smaller donations by broadening a ban on contributions from corporations to include limited liability companies and partnerships and by reducing caps on campaign contributions from those that do business with the city by 90 percent.
The legislation was approved by a vote of 44 to 4 with council members Erik Dilan, Vincent Ignizio, Oliver Koppell and James Oddo dissenting.
Under the bill those that "do business" with the city include lobbyists, city contract holders, land use applicants and economic development recipients. But, much to the dismay of some advocacy groups and council members, the legislation does not include unions.
Calling the bill (Intro 586) the "gold standard of good government," Council Speaker Christine Quinn defended its exclusion of unions. "The situation here is to require that everyone gets treated the same way," Quinn said, contending that the limits on individual contributions create equality.
But not everyone agreed.
"It's not what's in the bill," said Councilmember Ignizio. "It's what's not in the bill. The fact that we are leaving out interest groups, unions in this particular case, at the expense of the rest of the city is questionable at best. I believe we have to treat all three groups equally."
The legislation, which was also spearheaded by Mayor Michael Bloomberg, increases the public matching contribution from $4 for every dollar in the first $250 of a contribution to $6 for every dollar for contributions of $175 and below. The contribution limits on city contractors range from $250 for gifts to City Council candidates to $400 for those seeking citywide office. Those contributions also will not qualify for public matching funds. The individual contribution caps will continue to range from $2,750 to $4,950.
Supporters of the legislation argue that by increasing the public matching funds and greatly limiting contributions for those that do business with the city, the bill will empower average citizens and sharply curtail the supposed influence of special interests eyeing lucrative city contracts.
According to the legislation, the city will also study whether donations from family members of city contractors should also be included within the contribution limits. Currently, Quinn said, the state prohibits the solicitation of such personal information from city contractors.
The legislation also does not apply to providers of affordable housing or to contributors whose name is accompanied by a professional designation, such as Esq. or C.P.A., who might otherwise be interpreted as a limited liability company.
While some council members objected to the bill's treatment of unions, others contended that the contribution limitations could favor rich candidates who can finance their own campaigns and hurt efforts by politicians in poorer communities to gain financial support.
"In order for a campaign finance system to work it has to facilitate realistic campaigns," said Koppell prior to the council's vote, "This proposal unfortunately is unfair. It's unfair to candidates, especially to candidates from poor or minority districts who will find it very difficult to raise enough money to run, especially for races beyond the City Council race."
Several members who voiced opposition but still supported the measure, pointed to a discussion on the legislation's imperfect approach to campaign finance. Councilmember Simcha Felder, a sponsor of the bill, said, "The bill's not perfect. I don't think anything is perfect."
Even so, the city's good government groups support the sweeping reforms, which will take effect in intervals and are all intended to apply to the next citywide election in 2009.
Nearly four decades since its inception, the city's building code has itself become dilapidated, city officials said.
Like bad plumbing or broken windows, the code was widely thought to be in need of an overhaul - a long-awaited rehabilitation that was approved, nearly unanimously, by the City Council last week. The code (Intro 578) was supported by 47 council members with one abstention by the Bronx's Koppell.
Following 9/11 -when officials recognized that small stairwells in skyscrapers could become a safety hazard - the Bloomberg administration and the City Council set out to revamp the city's construction code. The new code is a product of a commission formed by the Bloomberg administration in November 2002, which was charged with reviewing and reforming what was known as an "antiquated" set of regulations.
The code now incorporates national and international standards for new construction and mandates the installation of sprinkler systems for all residential buildings with three or more apartments and for one to two-family homes over three stories.
The new code, which takes effect in July 2008 and applies to new construction, also requires buildings over 125 feet to have a back-up generator for emergency lighting as well as at least one elevator in case of an emergency. It also classifies student dormitories as hotels to ensure devices, such as sprinklers and fire alarm systems, are incorporated into the building.
The bill included a mandatory three-year review of the building code to guarantee it is kept up to date.
"The code, because it's updated every three years, will kind of be a living, breathing document," said Dilan, the chair of the Housing and Buildings Committee. "It's not a perfect document… It's a long, complicated, technical bill."
In addition to stricter safety requirements, the new building code also offers incentives for environmentally friendly construction. It hands out rebates for projects that abide by the United States Green Building Council's Leadership in Energy and Environmental Design rating system for renewable energy, energy use reduction and bicycle storage facilities, among other green building elements.
Some real estate and building professionals have raised concerns that the new code would drastically raise the cost of construction. But, city officials said, a hike in cost initially could save more in the end through the elimination of redundancies in the code and including more energy efficient products.
Billiards Exemption
City Council unanimously approved a bill (Intro 577) so that bars and restaurants with less than three pool tables will not have to seek a billiard's license from the city. Introduced by Councilmember Leroy Comrie, the bill does away with a bureaucratic procedure and eliminates a burden on small businesses, officials said.
"This is a silly law and it doesn't need to be regulated," said Comrie. "This gives our business people one less onerous burden that they have to hurdle in order to do business in the city."
Illegal Clothing Bins
The council also approved legislation that gives the Department of Sanitation greater power to control the condition and location of clothing collection bins. Some council members defined the bins as an intrusion on public sidewalks, an eyesore and hub of graffiti.
The council approved the bill, (Intro 105), which would allow the Department of Sanitation to remove the containers if they do not comply with city regulations, by a vote of 47 to 1, with Councilmember Inez Dickens dissenting.
"The situation that we look at now is clothing bins that are popping up, as I like to say, like wild mushrooms in a rainy forest in the mid-summer," said Councilmember Michael McMahon, the chair of the Sanitation Committee "As you can see this a problem. It becomes a fungus in our community."
The bins will be prohibited on public property, and the owners of the bin will have to obtain permission to place a bin on private property. The legislation will require contact information be displayed on the bin and that it be kept clean.
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