The new budget removes the sales tax on clothing -- even luxury items. |
Years ago, council members would have been biting their nails and eyeing the clock as it ticked toward midnight on June 30, the deadline for reaching a new city budget. But at 4:30 p.m. Friday, several legislators played whiffle ball on the steps of City Hall and others were out of the door, most likely to celebrate one of the earliest and speediest budget negotiations in recent memory.
With a kiss and handshakes, Mayor Michael Bloomberg and City Council Speaker Christine Quinn announced a $59 billion budget agreement last week. On Friday, the full council swiftly and unanimously adopted it -- 16 days before the deadline. The agreement delivered a 7 percent reduction in property taxes - 2 percent more than Bloomberg proposed in January. The agreement was also in the nick of time for tax bills to be dropped in New Yorkers' mailboxes.
With an estimated $4.4 billion budget surplus, the largest in the city's history, the agreement produced little controversy or disagreement. But as in every other budget, some projects, cause or constituency was left out. And for the 2008 fiscal year, which begins July 1, advocacy groups and fiscal watchdogs question whether the city could have given some of its record-breaking surplus to help public housing and to provide real relief for two-thirds of the city's residents who rent, rather than own, their homes.
In April, the council was already celebrating several budget victories and compromises with the Bloomberg administration.
Between the presentation of the mayor's preliminary budget in January and the release of the executive budget in April, the council had won Bloomberg's endorsement for several key initiatives: $320 million over 10 years to acquire land in the Catskill/Delaware Watershed and the creation of 10 state-of-the-art health care facilities.
And last week, the council's victories seemingly outweighed its defeats. Among the programs secured in this year's budget are expanding library hours so all branches will be open six days a week, at a cost of $42.7 million, and increasing the number of full-day, pre-kindergarten slots. Other allocations are geared toward upgrades for the 311 non-emergency hotline system, bulletproof vests for auxiliary officers and funding for individuals suffering health effects from 9/11.
This year's budget also guaranteed an additional $21 million for the City University of New York to retain faculty and slated $500 million for the Health Care Trust Fund to fund benefits for future and current retirees.
The council also ensured funding for the following programs:
- $25 million over two years to maintain and repair more than 12,000 units of affordable housing
- $200,000 to the Low Income Investment Fund for childcare centers' facility upgrades
- $5 million to the district attorney's offices and the Office of the Special Narcotics Prosecutor to investigate child abuse, internet crimes and gun violence
- $3 million to fund education and fitness programs
- $5.6 million for high school drop out prevention
Some have termed the 7 percent tax break for all property owners as the greatest achievement in the budget. Real estate assessments are steadily skyrocketing – one estimate is a hike of 19 percent in 2006 – and the property tax cut is aiming to at least stabilize the amount homeowners pay. On top of the 7 percent rate decrease, each homeowner will also receive a $400 tax rebate at a total cost of $256 million.
To some housing advocates and members of the council, one constituency is blatantly missing: renters.
In her state of the city address this winter, Quinn said a renter's rebate was one of her top budget priorities. At a cost of $261 million, the tax credit would have applied to approximately 1.1 million households, putting $300 back in their pockets.
That initiative needed state approval and so was abandoned.
"We will continue to fight to make sure that renters get the relief that they deserve," Quinn said prior to the budget's approval on Friday.
Some attribute the failure of a renter's rebate to a lack of support from the mayor. Finance Committee Chair David Weprin said if the council and the mayor do not both lobby Albany for support, an initiative is unlikely to receive approval.
By the time the budget was passed, the renter's rebate, touted in |
"We pushed for it from the City Council's point of view," said Weprin. "Generally Albany doesn't take positions that affect New York City, unless the council and the mayor are on the same page."
Housing advocates were disappointed by the council's failure to win the renter's credit. Because real estate assessments have been climbing, rents have too, said Jenny Laurie, director of the Metropolitan Council on Housing. When the average renter in the city pulls in just $32,000 a year, a break would have been nice, she added.
"The renter's (credit) would have done something really great," she said. "It would have actually handed cash back to tenants at the end of the year."
Although renters and people with lower incomes may not see direct tax relief, Laurie said the tax breaks for homeowners could trickle down to the renter and keep prices stable at least for now.
"Its fair to say the property tax rate cut will largely benefit New Yorkers with higher incomes than renters," said Doug Turetsky of the Independent Budget Office. "Renters will not benefit from that break nor will they get from any portion."
Some fiscal experts said the entire tax break package was primarily geared toward more affluent New Yorkers. The budget eliminates the sales tax for clothing and shoes and provides a break to small, unincorporated businesses.
"The elimination of clothing sales tax over $110, the only parties that benefit from that are going to be high income consumers whether they're city residents or not," said James Parrott of the Fiscal Policy Institute, a nonpartisan research organization. "What's an issue is that homeowners are getting two bites at the apple, the tax cut apple. Renters haven't gotten anything."
Some lower income people will benefit from the new child care tax credit. Offered for the first time at the city level and proposed by Bloomberg, it will provide $42 million to working parents who earn less than $30,000 and who have children under 3 years old. This would eliminate the need for 33,000 families in the city to pay city personal income taxes, according to the Independent Budget Office.
But according to a report from the Independent Budget Office, the credit is not a win-win for all working parents. Some 167,000 New Yorkers, who do not pay state or federal taxes, still must pay the city personal income tax.
One group of renters fared particularly badly in the new budget - those who live in apartment buildings operated by the New York City Housing Authority.
In 2006, the New York City Housing Authority predicted a budget shortfall of approximately $30 million for 2007. It has since grown to more than $200 million. Faced with such a large deficit, the authority, which oversees public housing projects, has had to cut costs, increase rents, drastically reduce its workforce and sell off land to raise revenue. Even with a $130 million commitment earmarked in the executive budget, the agency still has a $51 million deficit for its budget this year.
Last year, the mayor appropriated a one-time only $100 million subsidy and council pushed for another $20 million to bail the agency out of fiscal crisis. Without a similar subsidy this year, the authority could face even more cuts, some housing advocates said, that threaten the amount of public housing in the city.
"We're asking, where is the city's help for dealing with (the New York City Housing Authority's) operating deficit?" senior housing policy analyst for the Community Service Society Victor Bach asked. "We know the city is planning to buy some vacant land, but that's a quid pro quo."
Although the agency's budget woes are a result of decreased federal and state aid, some advocates said the city should have assisted the housing authority -- and given its huge budget surplus, it could certainly afford to do so.
Councilmember Erik Dilan of Brooklyn said the council should look toward providing some help to the authority in the future.
"I think as we move to the fall there are some very serious concerns this body needs to take a look at regarding the New York City Housing Authority," Dilan said. "It would be very nice, along the way, if we could get some help from the state and federal governments."
The City Council successfully pushed for funding to open libraries six days a week, restoring services cut after 9/11.
While the budget surplus helped make this a relatively easy budget year, city officials caution that times will not always be so rosy. This year's surplus, attributed to gains on Wall Street and better than expected tax revenues, cannot be guaranteed in the future.
"Just five years ago the city faced financial ruin," said Councilmember Michael McMahon prior to the budget vote. "And now, we're opening libraries."
In what many officials have called "prudent" spending, the city put $2.3 billion toward covering debt services in fiscal year 2009 and 2010.
After all, if times get rough again, City Council members might have to put their whiffle bats away -- and council members and the mayor could be trading growls instead of kisses.
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Paul Georgoulakos: "Coney Island raised my family."
As he bastes shish kebabs with a sweet-smelling barbeque sauce, 78-year-old Paul Georgoulakos, admits, Coney Island is "all I know." But the Coney Island Georgoulakos knows may soon change forever, leaving an uncertain future for his food stand and many of Coney Island's other mom and pop businesses.
Coney Island has long been the city's neglected — if beloved — playground. After its glory days of hotels, Dreamland and Luna Park, it remained the city's daytime getaway – cheap and a little sleazy -- for generations. But now Thor Equities, a large development corporation, has bought more than 12 acres in the heart of Coney Island and hopes to build a hotel, luxury condos and a glitzy entertainment area. Thor's vision for Coney Island does not include some of the area's amusements, including Astroland, whose lease was not renewed by Thor and will close at the summer's end. Some of the rides could be moved elsewhere. (The Cyclone and Wonder Wheel, however, will remain.)
Thor still confronts obstacles in making its high priced vision a reality. The city planning department has said it does not think Astroland site is appropriate for residential development, and under the current zoning, such development is prohibited. Thor Equities has been lobbying for rezoning that would change that. Meanwhile the city is developing a plan for the community, and other developers and property owners are trying to figure out how they fit in (see related story)-->.
Small vendors like Georgoulakos remain in a state of limbo as they wonder whether or not their leases will be renewed. But Georgoulakos says he has survived difficult times at Coney Island before. When his milk stand burned down in 1950, he moved to the other side of Coney Island and built another one. Then, in 1970, Georgoulakos and his friend Gregory opened Paul and Gregory's, a restaurant that has served the Boardwalk with funnel cakes, pizza and more ever since.
The reality though, is that for many of the area's small businesses along the boardwalk, this season will be the last. Even if Thor Equities chooses to renew a business' lease for the coming year, the development is likely to bring gentrification and higher rents and that will squeeze out Coney Island's smaller entrepreneurs.
Manny Cohen: "They're going to make it look like Las Vegas." |
For now, though, the area's small-business owners have work to do. Clams must be baked, ice cream scooped, games painted and readied for throngs of visitors. And for the colorful cast of characters who continue to make Coney Island a destination unlike any other, one thing is certain: The show must go on.
It is still early in the season but Gregory and Paul's has a line of customers waiting to taste one of Georgoulakos' chicken kebabs, hot off the grill. A younger employee shouts out into the boardwalk. "Funnel cakes! Hot pizza! Hot dogs! Hot chocolate! Come and get it!" On the Boardwalk, it all is available and almost anything goes.
"Every year has been a good one," Georgoulakos says from behind the grill. "This year [though] is not so good," he said. Still, Georgoulakos is not angry. He talks of the sense of community he has found in Coney Island, and of a retirement that will allow him to spend time with his wife, who is not well. "There will always be someone else to take my place," he says. "I hope they do as good as I did because I did good. I'm happy. Coney Island raised my family."
He fears, though, that the Coney Island that supported his family way be doomed. "Coney Island without the amusement area? I don't know what you're going to call it," he said.
Not all the owners are at peace with their business' uncertain future. After 27 years on Coney Island, Manny Cohen, the owner of the Coney Island Arcade, featuring pinball machines and video games, is furious. His black tee-shirt is emblazoned with the hot green letters "KOOL," for the cigarette's logo. Tugging at his red, white, and blue suspenders with his thumbs, Cohen's defiance grows as the conversation goes on. "I hope they don't give me a lease," says Cohen. "I'll be out by September."
Coney Island, says Cohen, has been the "poor people's paradise." But he thinks that will change if Thor Equities builds its luxury condos and mixed retail space. Walking past a maze of arcade games and neon signs stored in his garage, Cohen enters his office and settles rather reluctantly into a well-worn chair. "After one summer or two, they're going to shut the beach on the poor people," he says. "There is no way Thor [Equities] can afford to open an amusement park after the price they paid for the land. "It's all a hooplop. They're going to make it look like Las Vegas."
But Cohen remains sanguine about his own future. "I'll move on," he says. "I'm going to do the very same thing," he said. Where will he go? Ironically enough – to Las Vegas, where Cohen says many of his friends may relocate their businesses. "There's a life beyond Coney Island," says Cohen. "If that's what the city wants."
Cohen wants Mayor Michel Bloomberg to send a couple of representatives to Blackpool, the oldest amusement park in England, so they can see how "civilized nations" preserve their historic amusement parks. "I'll donate the money for the trip if the city doesn't have it," he says. (The president of the Coney Island Development Corporation, Lynn Kelly, says she has indeed visited Blackpool, the closest thing in the world she could find to Coney Island, but still very different.)
Coney Island: "Every year has been a good one."
Further down the boardwalk next to Nathan's is Cha Cha's Bar and Café. Formerly known as Club Atlantis, over the years, it has featured a surprisingly array of talent. Tito Puente, Steve Allen, and Jimmy Durante have all graced Cha Cha's small neighborhood stage. Black and white photographs, many of them relics from Coney Island's early days, mingle with newer color shots on the wall.
A man named J.T., who calls himself a "long-time friend" of Cha-Cha, the owner, sits with a cigarette at the bar and offers a brief history lesson. Cha Cha's he says, is only in its fifth season, but is already a mainstay on the boardwalk and was seen on "The Sopranos."
"I grew up [in Coney Island] and worked on the Boardwalk," J.T. says. "That's my baby picture on the wall," J.T. says, pointing to the frame. "I was booking entertainment by the time I was 12."
J.T. doesn't know what's going to happen to Cha Cha's or the Coney Island's other small businesses. "Only God knows," he says. But he hopes he can remain. "I'm a free spirit but this is the place to be." J.T. says.
A Nathan's Hot Dogs employee rushes in. "J.T.! Do you have $200 in change?" she asks. J.T. laughs, "What are you asking us for? You're Nathan's! You're a huge conglomerate!" The employee tries again: "So you don't have $200. "No," J.T. says. "But if we did, I'd give it to you."
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The sweeping campaign finance law introduced by Mayor Michael Bloomberg and leaders of the City Council last week is being championed as the most progressive campaign finance reform proposal in the country. Good government organizations applauded Bloomberg and Council Speaker Christine Quinn and congratulated them on taking on "pay to play" campaign contributions.
But, whatever its eventual impact might be, some experts said candidates, including members of the City Council, may be able to skirt its requirement for the 2009 city elections. If deadlines outlined within the legislation go unmet, candidates for the next citywide election would not have to comply with the tougher standards.
With dozens of council members facing term limits, many plan to seek another office and are already banking campaign contributions. Some of those donations would be banned or limited by the proposed legislation, giving some council members an advantage in the election and others an incentive to fundraise as fast as possible.
Introduced at its stated meeting on June 5, the proposal (Intro 586) attempts to sharply limit the influence of corporate and special interests in city government. Having already been recognized for its public financing of campaigns and other aspects of its campaign finance law, the New York City government now proposes to reduce contributions from those with government contracts and from lobbyists by 90 percent.
The bill would:
- Reduce the cap on campaign contributions from government contractors or others who "do business" with the city, such as lobbyists or land use applicants from $2,750 to $250 for council races, $3,850 to $320 for borough-wide races and $4,950 to $400 for citywide races.
- Provide $6 of public financing for every dollar acquired in the first $175 in a contribution, instead of the $4 for every dollar up to $250.
- Prohibit matching public funds for contributions from those who "do business" with the city.
- Include limited liability companies and limited liability partnerships in a ban against corporate campaign contributions.
- Expand the definition of fundraising intermediaries, who are subject to disclosure, from those who deliver campaign contributions to those who solicit funding as well.
- Require that a race be competitive before a candidate can receive public financing.
Stated Meeting: Whistleblowers and Immigration While campaign finance reform captured much of the attention at the City Council stated meeting on June 5, the council also overturned Mayor Michael Bloomberg's veto of a bill to protect whistleblowers who report an act that endangers a child and approved a resolution on national immigration reform. The council approved the whistleblowers bill, (Intro 83), by a vote of 49 to 1 with Councilmember Peter Vallone, Jr. casting the no vote. The legislation expands whistleblower protections to teachers, social workers and others and prohibits retribution if an individual reports conduct that harms a child. Critics have called the measure redundant and say it is another attempt by the teacher's union to strike back at the mayor for overhauling the public school system. The union had pushed unsuccessfully for a similar measure in 2006. But Council Speaker Christine Quinn called the bill "common sense." And Councilmember Eric Gioia, who sponsored the bill, said, "No one should ever have to decide between the best interest of the child and keeping their job." The override is one of few since Quinn has taken over the council. The council also approved Resolution 842 urging Congress to adopt comprehensive immigration reform, sparking a heated debate at City Hall. Democratic Councilmember Miguel Martinez of Manhattan said the bill proposed in Congress is “totally contrary to what this great country stands for.” He added that an opportunity to get permanent resident status “should not be limited to few.” But Vincent Ignizio, a Staten Island Republican, disagreed. "We're not talking about immigrants," he said. "We're talking about illegal immigrants - those who come to this country and try to jump the line." The resolution calls for Congress – which currently is deadlocked on the issue -- to provide a path to citizenship for illegal immigrants now in the country, to support family unification, and to restore due process to immigration procedures. |
The bill, according to those who worked on drafting it over a six-month period, is meant to empower New York City citizens by emphasizing smaller donations and limiting the contributions accumulated by those with government contracts.
"We set out to do three things: one to make sure we had a fair system, a system that was fair and clear and user friendly for all participants, a system that would encourage New Yorkers to run for office if they wanted to and be a part of our public campaign system," Quinn said at a press conference prior to introducing the bill. "And two, to protect the public's money… and third we wanted this bill to send a message to New Yorkers that all of us in public office work for them."
The law takes direct aim at pay to play, a practice in which a company, person or non-profit contributes to a candidate's campaign fund hoping to influence decisions on government contracts later on. To combat such undue influence, the proposed legislation bans any donations from corporations and, for the first time, limited liability companies and partnerships.
According to a report commissioned by the Campaign Finance Board, in the last citywide election in 2005, $9.4 million out of $42.3 million in campaign donations came from those that "do business" with the city, while in 2001 those that did business with the city accounted for $15.6 million in contributions, or 22.3 percent.
In the proposed legislation, "they have successfully resolved issues that protect the right of the people to participate in campaigns, strengthen the value of small donors while limiting the influence of many big money interests who do business with the system," said Dick Dadey, the executive director of Citizens Union (a sister organization to the Citizens Union Foundation, which publishes Gotham Gazette).
But some of these measures, such as limits on contributions from government contractors and land use applicants, are accompanied by a timetable. Any delay in the creation of the "doing business" database by the mayor's Department of Information Technology and Telecommunications could affect when the legislation would go into effect. For example, if certain parts of the database are not certified by November 2008, the respective sections of the bill would not go into effect until the next election cycle.
Eric Friedman, a spokesman for the Campaign Finance Board, said officials designed the legislation to allow incumbents and prospective candidates to get accustomed to the new rules. Changing the guidelines quickly before Election Day, officials said, would not be fair to the candidates.
But whether the database, which would contain officers and individuals with more than a 10 percent stake in a contract, can be compiled quickly is another question. The data would have to be compiled within six to 18 months of the bill’s passage.
Despite the tight time frame for the massive amount of data compilation, some said the deadlines could, and should, be met in time for the '09 contest. "The bill makes the mayor ultimately responsible for the development of the databases," Friedman said. "We are certainly going to work with them to provide any assistance."
A spokesman for the mayor's office said the administration was "completely confident" it could meet the deadline, and a City Council spokesman echoed that sentiment, contending Quinn wanted the legislation, which is co-sponsored by 24 other council members, to apply to the 2009 election.
In hopes of seeking higher office, more than three dozen officials have already registered with the Campaign Finance Board to begin fundraising for the election more than two years away. Many have collected contributions that would not be permissible under the reform bill, such as donations from liability corporations or gifts that exceed limits anticipated by the legislation for individuals, such as lobbyists.
The legislation is not retroactive; so any funding collected prior to its enactment is free and clear of the more restrictive standards. And with both term limits and contribution restrictions looming, some candidates might be particularly aggressive in courting big donors now – before it is too late.
"When this bill is implemented there will be a timetable with passage and implementation," said Republican Councilmember James Oddo, the minority leader. "Every person seeking office in 2009 will be on the phone to make as much money as possible to beat the clock."
Oddo, who is looking toward a race in Staten Island as borough president, has not yet pledged to support or oppose the bill.
Chair of the Government Operations Committee and one of the bill's co-sponsors, Simcha Felder said it was inevitable candidates would try to beat the legislation's timeline and accumulate as many contributions as possible.
"Unless there could have existed a moratorium for months and months beforehand, there would be a level playing field," Felder said of racing to fundraise. "I can't blame anyone” for fundraising, he added. “They really would be putting themselves at a disadvantage."
And some officials said the current edge is no different from the advantage incumbents and other prominent candidates usually have. "Challengers really don’t get started until the election is closer and on everyone's radar screen," Friedman said. "To that extent, yes, people that have gotten an early start may see some advantage. I don’t know if that’s different from any other election cycle."
For instance, Quinn has already received more than $84,000 in campaign contributions for the 2009 election, when she is expected to run for mayor. Approximately 7 percent of that is from limited liability corporations and partnerships.
The bill, which will be before the Government Operations Committee this week and is expected to pass the full council, also intends to increase competition and influence of smaller, grassroots groups in citywide elections by upping the formula for public financing and specifying stricter criteria for declaring competitive elections, officials said.
However, some critics disagree on its ability to encourage competitive campaigning. Norman Adler, president of powerhouse, lobbying firm Bolton-St. Johns, said the proposed reforms close lucrative avenues of fundraising in a field with increasingly expensive elections.
"If you're talking about cause and effect, I know what the effect of this is going to be," said Adler, who has already surpassed potential limits on contributions to some candidates in the 2009 race. "It's going to be harder and harder to raise money, and it's going to penalize people."
Hank Sheinkopf, also a consultant, said the reforms could hurt candidates in minority or low-income districts who rely on larger donations from contributors limited by the proposed legislation. If passed, he said, the bill could hamper competition and make it easier for the more affluent, and self-financed, candidate or those with better name-recognition.
"People that contribute to politics happen to have an interest in politics," Sheinkopf said. "Where are these people going to get money from, the guy on the corner? It's nonsense."
Even Bloomberg has recognized the influence his own fortune played in his election.
And as with any other reforms, loopholes and detours will emerge, some said. "You know, how I would get around it?" Adler asked. "I would form a union."
The legislation largely leaves out one particular campaign contributor with a large influence in city government: unions.
According to the Campaign Finance Board, the top five contributors to City Council candidates in the last citywide election in 2005 were unions or union affiliated political action committees. Some critics said if government contractors are included in campaign contribution limitations, unions should be too.
"Clearly there is an 800-pound gorilla in the room," Oddo said of union's exclusion in the bill. "(The bill) is under inclusive, and it doesn’t address all the incarnations of influence and perceived influence garnered by money," he added.
Others said in retrospect, unions should have been included in the legislation but doing so could have killed the measure.
"They could have never gotten the council to give them support," Felder said if unions had been included. "It was very personal."
But others said the legislation remains notable not for what has been left out, but for what has been included. Several government watchdog organizations, including Citizens Union, Common Cause/NY and the New York Public Interest Research Group have hailed the legislation and used it to contrast the tight rules on campaign finance in New York City with the lax rules for state elections in New York.
"We commend the city for advancing these forward-thinking reforms," said Megan Quattlebaum, associate director of Common Cause/NY. "Now, it's time for citizens to demand that lawmakers in Albany get out from under their shroud of winter darkness and follow in New York City's footsteps by drastically overhauling what remain some of the worst campaign finance laws in the nation."