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Fiscal Monitors Check And Balance The Mayor


Despite projected deficits of $3.7 billion, the mayor and the city council were not deterred from a $300 million tax-cut program (primarily a $250 property tax rebate to each residential owner). Tellingly, that exact same amount, $300 million, is what the mayor has quietly asked city agencies to cut during this fiscal year.

It is only one of the questionable actions taken by this mayor, using his extraordinary budget power under the city charter. But the mayor’s power is not absolute. The democratic checks and balances embedded in the charter and state law have actually been working in recent weeks.

The West Side Plan

The city comptroller has raised serious questions about the fiscal wisdom and the decision process of the mayor's West Side plan, calling the Hudson Yards part of the plan (the #7 subway extension and other infrastructure) "a backdoor financing schemethat not only is fiscally imprudent, but also flouts the principles of responsible government." It sets a precedent that any mayor could "divert funds from the city's operation without City Council consent."

At the same time, a combination of local activists and elected city and state officials has apparently blocked the use of Battery Park City Authority revenues for part of the plan. (See a report by State Comptroller Alan Hevesi, in pdf format, for details) The mayor will presumably come up with an alternative borrowing plan for the Javits part of the plan, but the decision re-opens questions raised by housing advocates about the use of Battery Park City Authority revenues.

Contracting Procedure Questioned

The consequences of cutting back on informationin recent mayor's management reports are evident again in recent questions about city contracting.

The contracting information -- much of which is now handled separately, for a much smaller audience, at the mayor's office of contract services -- is itself now suspect. At an October 18 city council hearing of the contract committee, Deputy City Comptroller Greg Brooks testified that the mayor's office of contract services September report on agency procurement indicators is inaccurate(in pdf format). He challenged its claims of "substantial improvement" in getting contracts registered faster.

On the number of contracts and transactions registered in 2004, the deputy comptroller testified that in fiscal year 2004 there were 3,978 contracts registered, as well as 8,210 transactions below the small purchase limits, totaling almost $10.3 billion. That is almost three quarters of a billion dollars more than the mayor's office reports.

On the old problem of "retroactive contracts" -- contracts registered after services have begun -- the deputy comptroller said that in the last fiscal year the city registered 1,748 human services contracts totaling $3.8 billion. (Contractors don't get paid until contracts are registered.) Of these, 55 percent were over 30 days late. But the mayor's office says that only 25 percent of such contracts were over 30 days late. Finally, the deputy comptroller said the mayor's data on the comptroller's own timeliness in registering contracts are "grossly inaccurate."

Less Money For Schools

The other city checks-and-balances institution that helps monitor the strong mayoral power over budgets is the Independent Budget Office, now approaching its 10th year of charter-defined budget analysis. Illustrating its independent role, two new IBO reports help fill the vacuum created by a skeletal mayor's management report and a general reluctance to share important budget information.

The October 26 IBO study, "Go Figure: How a Bigger Education Budget Became Less Money for Schools"(in pdf format), shows how an increase of $570 million in this year's education budget translates - because of "rising costs and a complex allocation process" - into less money to individual schools. At a time when the mayor and council, like the state legislature and the governor, are dodging the future new education costs associated with the Campaign for Fiscal Equity case, the IBO study shows how state/city budget politics and city bureaucratic procedures delay and obfuscate school services and planning.

Transit Riders Shouldering More Of The Budget Burden

The other IBO study, the November fiscal brief, "Running on Empty: The MTA's 2005 Budget and Financial Plan"(in pdf format), helps explain the connections among the Metropolitan Transportation Authority’s current fiscal crisis, the mayor's West Side plan, and the city's own fiscal condition. The MTA's capital plan, for example, includes the mayor's $2 billion Hudson Yards funding plan for the #7 subway extension.

The study points out that the eastern and western rail yards at the heart of the mayor's west side plan, as well as their development rights, are owned by the MTA and the cost of their sale to the city is currently unknown. What's good for the MTA here is not automatically good for the city and vice versa. The closed negotiations in such authority-based discussions only add to the unknown consequences of the West Side plan.

The IBO fiscal brief shows how the average transit rider is paying an increasing share of the MTA budget and points out that one option to ease that burden would be using new revenue sources for the MTA, including a reinstatement of the city's commuter tax and tolling the East and Harlem River bridges.

The IBO estimates the commuter tax (with its old basic 0.45 percent rate) would raise $550 million a year by 2008 and the tolls nearly $700 million a year. These two sources together would wipe out the MTA's projected budget gap in 2006. But both these revenue sources, of course, have at various times been on the mayor's list of proposed city revenues. The city currently provides only about $190 million a year to the MTA's operating budget, so giving up these revenue sources to the MTA would substantially add to the city's long-term structural budget problems.

All this monitoring offers some hope of limiting, or at least highlighting, the mayor's fiscal powers. But then there is the recent news that the city has agreed to assume the state’s $300 million contribution for the Jets stadium deal, if necessary -- yet another reminder how much the governor and mayor use state and city authorities to get their way without any public participation.

Glenn Pasanen, former associate director of City Project, teaches political science at Lehman College of the City University.

The Mayor's Management Report Skimps On Information About Education And Everything Else


Mayor Michael Bloomberg has put his own stamp on the semi-annual mayor’s management report, sharply reducing its size and its Giuliani-era political rhetoric. But smaller does not mean better. The 2004 Mayor’s Management Report (in pdf format), released in mid-September, dodges the key city-charter mandate – to show accountability by comparing policy goals with actual performance.

Its biggest feature – an endless accounting of the 311 calls into 38 city agencies – identifies a mayoral priority without providing much insight into managerial results. Yet the focus on this $25 million venture gets many more pages than the mayor’s other big priority, the overhaul of the $15 billion education department.

And the few pages of educational information are especially spotty. A reader has little sense of where the department’s money actually goes, or what it produces. The education database has been cut to the bone. What is left is often out of date. Most recent policy initiatives – new administrative and managerial hires, the re-organization of curriculum and teaching, and the extensive use of contractors to provide training, coaching, and tutorial help -- are simply ignored in the report.

As recently as 2001, the Mayor’s Management Report had 248 education indicators (including subcategories). Today it has 81. Of those 81 indicators, 41 have no 2004 data available in the September edition. Of the 23 indicators that measure general education performance, 20 have no current data. The result is that there is actual data from a grand total of three performance indicators for the school year ending in June 2004:

  • Students in grades 3 to 8 meeting or exceeding standards in English Language Arts (42.7 percent).
  • Students in grades 3 to 8 scoring below standards progressing from below standards to meeting standards (37.6 percent).
  • Students in grades 3 to 8 progressing from below standards to meeting standards in English Arts (14.6 percent).

That’s it for the 2003/2004 school year. (For the record, the first of these three indicators shows about the same result as the previous year, and the other two show declines.) The remaining 20 general education indicators have data for the fiscal year 2003, which ended 15 months ago.

311

With the exception of promoting his new 311 system, Mayor Bloomberg has shown little interest in the Mayor’s Management Report. He cut the print version by more than two-thirds, but he chose not to invest in alternative methodologies that would better measure performance. The 311 data get top billing, included in more than 16 percent of the report’s 237 pages on city agencies. The numbers show what kinds of complaints and requests for service New Yorkers have in 38 of 39 city agencies.

 

True, this information is mildly interesting in many cases. For instance:

  • 352 callers who wanted to sue the city were referred to the law department;
  • 3,079 people complained to the investigations department about discrimination;
  • and nearly 135,000 New Yorkers complained to the police department about noise from a neighbor.

(The one agency that registered no calls, the Economic Development Corporation, suggests that those businesses in search of tax-free loans and tax exemptions have a direct line!)

 

But the report’s shuffling of these 8 million-a-year requests and complaints doesn’t tell the public what the city is doing in response.

One common complaint about the 311 data is that it doesn’t translate into information that community boards or community organizations can use because it’s not disaggregated to discrete neighborhoods. And no one knows what’s now driving mayoral responses. Is it the “squeaky wheel” callers alone? If so, is that a good idea?

On the question of disaggregating information, the City Council’s Committee on Technology in Government has held hearings on a proposed law (Intro 174-A) which would require breaking down data on, say, noise complaints by specific blocks or neighborhoods.

Measuring Educational Performance

In education, the report is a skeletal version of the Giuliani documents, and most of it is out of date. It does include useful five-year comparative data, back to 2000, but here, too, there are gaps, as in the case of the new Regents exams. About the only performance data thus available are these:

  • Graduation rates, within 4 years of entering high school were 53.4 percent in 2003, up from 49.9 percent in 2000.
  • Graduation rates, within seven years of entering high school were 68.6 percent in 2003, down from 69.7 percent in 2000.
  • 20.3 percent of general education students dropped out within four years of entry into high school, up from 19.3 percent in 2000.

Not much of a performance record for either Rudy Giuliani or Michael Bloomberg. But more to the point, it’s not much of an information/analytic base for future measurement.

The one innovation in the education section is a set of five new indicators (no data until next year) that ostensibly will test the performance of the over 1,200 parent coordinators in the schools. They include the number of coordinator-parent phone calls, parent walk-ins, parent workshops, and parent-teacher contacts. This is hardly the stuff of serious fiscal and service analysis.

Interestingly, these soft indicators replace a Giuliani indicator which would seem to be a more useful accountability measure – the percent of parents grading their school “A” or “B”, which had only a two-year (2001-2002) lifespan. And why no indicators to track the performance of the many new administrators and managers whose power has raised some worries about excessive mayoral control over the schools?

Following the Money

One of the few pieces of fiscal information is in a pie chart (on page 24) that breaks down where the $12.708 billion of education went in 2003. (Not included is an additional $1 billion in pension and debt service costs.)

But here, too, the data beg for more detail. Dividing $12.708 billion by 1.1 million students means expenditures of $11,640 per student. But “Classroom instruction” is only 54.7 percent of that total, or just under $7,000 per student.

There is another wrinkle. Total expenditures for high school students were under $10,000 a year, while those for full-time special education students were nearly $48,000. Then there are huge non-classroom expenses in 2003, beyond the traditional expenses for food, transportation, and school safety ($1.82 billion in total):

  • District/superintendency costs were $394 million.
  • Leadership and supervision costs were $1.067 billion.
  • Student support costs were $1.474 billion.

Those three categories add up to nearly $3 billion, or about $2,700 per student. The mayor has said he has cut central administrative costs. But given the recent addition of new administrative, managerial, and training initiatives throughout the school system, it would be helpful to have some kind of staffing data base. (In the 2001 Mayor's Management Report there were 14 categories of administrators listed. Today there are none, leaving only an indicator that says there are over 134,000 education employees.) Further, there is no information in the latest report about the total value or kind of education contracting.

Accountability in the Future

Last November the mayor tried to eliminate the February Mayor’s Management Report (which covers the first four months of the new fiscal year) through a ballot proposal. Voters rejected that elimination, but the mayor apparently continues to show little interest in making the report a test of his accountability.

The City Council, whose oversight role on the report is required by the charter, has reduced its actions in recent years. Its Governmental Operations Committee holds hearings on the report, and until three years ago its several committees held separate agency hearings on the report; each committee prepared extensive analyses and recommendations on the report. In the past two years, those hearings have been replaced by joint hearings on the report and the preliminary budget.

What to do? One possibility is to add a review of the Mayor’s Management Report mandates to the agenda of the new charter revision commission the mayor named in August – what looks to be a more independent and representative group than last year’s commission.

There are many technical questions they might consider.For instance, the commission might look at the so-called “units of appropriation,” or categories of spending, which are supposed to help trace the flow of money. The units are often so large ("UOA #301" in the education budget, for district instruction and support services, is $2.8 billion) as to be useless in analysis.

The larger, political question is how to give the public some assurance through mandated reporting that its elected officials can be held to account. The mayor now holds the reins. Perhaps more independent mechanisms could be considered, such as professional management firms and university-based evaluation teams.

Glenn Pasanen, former associate director of City Project, teaches political science at Lehman College of the City University.

The Mayor's West Side Gamble


The mayor's plan for the development of Manhattan's West Side rests on "expensive, shaky and undemocratic assumptions," according to several new reports by the city's official fiscal monitors. Glenn Pasanen supplies the details.



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