Gotham Gazette https://www.gothamgazette.com/component/tags/tag/108 Sat, 20 Jul 2019 11:59:01 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) What's the [Data] Point? 98,000, Addressing New York City School Overcrowding https://www.gothamgazette.com/city/8681-what-s-the-data-point-98-000-school-overcrowding https://www.gothamgazette.com/city/8681-what-s-the-data-point-98-000-school-overcrowding whats the data point


What's The [Data] Point? Episode 77 -- 98,000, with CBC's Riley Edwards  [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

ep77 riley edaCitizens Budget Commission recently released a new report -- Cut Costs, Not Ribbons -- about how to address New York City's school overcrowding problems. The report, written by Riley Edwards, explains why the city has been misguided to use building new schools as the main tool toward reducing school overcrowding, which impacts almost half the city's 1.1 million students. Edwards joined the podcast to discuss her findings.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

Read more by this writer.

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What's the [Data] Point? 98,000, Addressing New York City School Overcrowding Fri, 19 Jul 2019 04:00:00 +0000
Struggling with Overcrowded Schools and Large Class Sizes, City Advances $8.8 Billion Plan https://www.gothamgazette.com/city/8673-struggling-with-school-overcrowding-and-large-class-sizes-city-advances-8-8-billion-plan https://www.gothamgazette.com/city/8673-struggling-with-school-overcrowding-and-large-class-sizes-city-advances-8-8-billion-plan 2 cm r espinal ground

Mayor de Blasio & others break ground for a new East New York school (photo: John McCarten/City Council)


Some days, it can be hard for Arthur Goldstein to walk down the hallway of Francis Lewis High School in Queens, where he teaches English as a second language. Goldstein’s school is one of 25 overcrowded schools in the 26th school district, and has a utilization rate of 207 percent, according to a 2018 Department of Education report.

“There are some days when I think I’m going to go to this office and I turn around and walk to another office because it’s just too much work to get through walking down the hall that way,” Goldstein said. “I don’t know if you can even imagine that, but that’s happened to me more than once.”

Francis Lewis High School has a capacity of about 2,400 but enrolls closer to 4,600, Goldstien said. Those students are some of about 520,000 students — nearly half the city’s school population — in the city who attend an overcrowded, also known as over-utilized, school, according to a Citizens Budget Commission (CBC) report released July 9. Those students attend roughly 618 schools, with the worst overcrowding in Brooklyn, Queens, and the central Bronx. Overall, there are roughly 1.1 million students in 1,840 schools in 32 school districts across the five boroughs, according to the Department of Education.

While the CBC report said crowding may lessen as enrollment citywide declines and, overall, the number of crowded school buildings has declined by 31 since 2015, others have expressed concern that the problem will get worse because the current need is already greater than the 83,000 seats the Department of Education has identified to be built to reduce crowding. In 2017, Mayor Bill de Blasio added 57,000 seats to the 2015-2019 capital plan to meet the 83,000 need seat estimate. 

The new plan also includes $180 million for the removal of Transportable Classroom Units — known as TCUs or trailers — where some students at crowded buildings may be receiving instruction. In 2018, it was estimated that about 8,000 students learned in trailers, and then-schools Chancellor Carmen Farina said the DOE had removed 159 out of 354 total trailers and had plans to remove 75 more. In 2003, Mayor Michael Bloomberg’s capital plan projected that all TCUs would be able to be removed, and he promised that would be completed by 2012.

Former state Assembly Speaker Sheldon Silver had in 2014 urged de Blasio to prioritize the removal of trailers and set aside some of the $800 million the city received from the Smart Schools Act, which allocated funds for districts to upgrade technology, increase pre-kindergarten capacity, and get rid of trailers.

Chalkbeat reported at the time that lawmakers had doubts that removing trailers was a priority of the de Blasio administration, as a DOE official said at a hearing earlier that year that trailers could be used to expand capacity for pre-K, de Blasio’s top campaign promise and mayoral priority. De Blaiso said at a press conference at the time that he will keep prioritizing the issue in his capital plan, as in 2014 his administration allocated $405 million toward removing TCUs.

“I don’t want kids in trailers,” de Blaiso said at the press conference. “I want to move aggressively to get them out of trailers. We know that will take some time, but we’re committed to it. We’re also committed to putting in new facilities in most overcrowded areas.”

Now, several years later, advocacy groups like Class Size Matters and City Council Members like Daniel Dromm say the new city capital plan — which includes nearly $8.8 billion for school capacity projects to be started over the next five years — does not have an updated estimate of the need for seats since the 2015-2019 capital plan as residential development, rezoning projects, and other trends will change the need in certain sub-districts.

“It’s very suspicious,” said Leonie Haimson, the executive director of Class Size Matters, a nonprofit advocacy organization. “They claim to be building all the seats that are necessary, but that’s based upon an estimate that is many years old.”

Overcrowding occurs in pockets around the city with crowded buildings in each district of each borough, but CBC research associate Riley Edwards, who wrote the new school capacity report, said there are enough seats currently for all New York City students, and the key to thinking about alleviating school overcrowding is more aggressively pursuing strategies other than school construction.

Edwards said most districts actually have an excess of seats, and the severe overcrowding occurs in sub-districts, with nine of 32 districts — five in Queens, two in Brooklyn, one in the Bronx, and one on Staten Island — packed with more students than their target capacity.

Other myths about school overcrowding, as detailed in a 2016 CBC report also authored by Edwards, are that middle and high school students face the worst crowding problems — it’s actually elementary school students — and that plans to build new schools will solve the problem. The new report says the DOE needs to focus on other strategies it already uses, such as rezoning, changing admissions policies, repurposing seats, and programming.

“It does take a long time for the city to site and build a new school,” Edwards said. “There’s only so much available land in the city and a limited amount appropriate for school buildings.”

According to the Independent Budget Office, Queens’ District 26 ranked as the third-most crowded school district with a utilization rate of 109 percent for the 2017-2018 school year, behind District 25 in Queens, and District 20 in Brooklyn, which both had over 121 percent. However, Dromm said district- or borough-wide numbers do not reflect the “tremendous” overcrowding that occurs at the sub-district level in individual schools.

According to Class Size Matters, the average class size for K-12 schools in New York City during the 2018-2019 school year was 26, almost no change from 2014-2015 when the last capital plan was proposed. The average class size in the United States is 21, according to the Office for Economic Cooperation and Development. Haimson said over 330,000 students in the city were in classes of 30 or more.

While some research shows that reducing class sizes may have small benefits at best, Haimson said ultimately larger class sizes are detrimental for students.

“There’s a huge amount of rigorous research that shows the larger the class, the less learning goes on,” Haimson said. “There are also a lot of other negative effects of large class sizes. Kids become less engaged, they’re more likely to get held back, they’re more likely to get referred to special education, and they’re more likely to have disciplinary problems.”

Dromm, now the Council’s finance chair and previously its education committee chair, said during the 25 years he was teaching at P.S.199 in Queens’ District 24 he saw the crowding getting worse each year.

“I remember a day when the janitors came into the school, and they opened the maintenance closet right outside the staff room,” Dromm said. “They took out the pitchfork, they took out the rake, they took out the shovel, and they threw up a coat of paint. They turned that into the speech classroom. That’s how bad some of the situations are in some of the schools.”

To address the issue, the city Department of Education’s new $17 billion five-year capital plan for 2020-2024 proposes funding to create 57,000 new school seats across all school districts, with about half expected to be completed no later than the start of the 2025-2026 school year, according to the city’s Independent Budget Office. The IBO predicts that all of the seats would be completed by 2028.

The plan sets aside $8.8 billion for capacity issues, including $7.9 billion for 57,000 new school seats in 88 new buildings and $150 million for class size reduction programs, which the DOE described as “increasing the number of school options available to students.” The DOE plan outlines the Class Size Reduction Program as building additions or new school buildings near buildings that have a high rate of overutilization, use trailers, are geographically isolated, or has a recognized seat-need that has not been funded.

In December testimony regarding the new capital plan, the United Federation of Teachers (UFT) said the additional seats are “good news” for crowded schools, but added that the publicly available data regarding trailers is incomplete, which makes it "impossible" to evaluate the removal projects.

“We commend the work that went in to developing this new five-year capital plan, and we support efforts to mitigate these three issues and the many others included within the report," the UFT testimony reads. "However, we want to stress the narrative and appendices in the report fail to clearly tell the story. While they inform many important programs, the information and data provided are insufficient to track the projects’ goals, and project- and program-level spending.”

“We’ll continue to build on these investments and work with school communities to meet their needs,” Isabelle Boundy, an assistant press secretary at the Department of Education, said in a statement to Gotham Gazette.

“We’re committed to reducing class size and alleviating overcrowding and have already implemented many of the recommendations in the report," Boundy said of the new Citizens Budget Commission study. "We’ll continue to build on these cost-effective investments such as rezoning, re-purposing seats through grade truncations and other significant changes to school utilization, setting high school seat targets aligned to space and demand, helping principals program their instructional space more efficiently, and creating capacity through room conversion projects.”

In 2003, following a lawsuit that claimed the state’s school funding system underfunded the city’s public schools, a New York Supreme Court concluded that for New York City students to receive their constitutional right to a sound basic education, more equitable funding was needed to reduce class sizes. At the time, the average class size for grades 4 through 8 was 25, and the Campaign for Fiscal Equity — the nonprofit advocacy organization that filed the lawsuit — said class sizes needed to be just slightly lower, around 24. 

Four years later, the state passed a law called Contracts for Excellence that partly required districts to put funds toward reducing class size and required New York City to reduce class sizes across all grades to specific goals — such as reducing 4 through 8 class sizes to 23 by 2011 — over the next five years.

Since 2007, about 93,000 school seats have been built, according to CBC, but Class Size Matters says class sizes have gone up and are “still significantly larger” than in 2003. Kindergarten class sizes have risen from an average of 21 in 2007 to 24 in 2019, though the Contracts for Excellence target was around 20.

Class Size Matters joined a group of parents and other advocacy groups in April 2018 in filing a lawsuit against city schools Chancellor Richard Carranza, the DOE, and state education Commissioner MaryEllen Elia to demand the city reduce class sizes. The court ruled in 2018 it was up to the commissioner to decide, and she said in 2017 the class size requirements in the Contracts for Excellence law had expired years ago, though Class Size Matters charges that the law is still in full effect. The plaintiffs are now appealing the decision and arguments are expected later this summer.

Meanwhile, the city continues to build new school seats to try to relieve crowding issues, but does not have to follow the guidelines for class size in the Contracts for Excellence law.

At a City Council hearing in December, Dromm said while the investment in 57,000 new seats included in the new capital plan will bring the total number of seats constructed since the start of the last five-year plan to a “historic” 83,000 seats, he said the DOE did not include a new, recalculated number of seats needed in 2024.

He said the 83,000 seats fulfills a commitment the mayor made in 2017 to fully fund the identified seat need by 2025, but there is disagreement over whether that number will remain years later by the end of the new five-year plan in 2024. Shino Tanikawa, the co-chair of the city’s Education Council Consortium, a body of elected parent leaders, said even though the mayor added more seats to the plan, the city is “always behind” the need.

In 2015, the city rejected a recommendation from the Blue Book Working Group — which was formed to make the DOE’s Enrollment, Capacity, and Utilization report, commonly known as the Blue Book, more accurate — to include the class size standards set in the Contracts for Excellence law in the Blue Book calculations for capacity and utilization. Though, the DOE did remove trailers from capacity calculations, decreasing the capacity of those schools.

Tanikawa, who was a member of the group, said the DOE should use aspirational class sizes to calculate, but instead the report is calculated using class sizes that are too large. For grades 9 through 12, the Blue Book uses a target class size of 30, despite the 2007 goal of an average class size of 25 for those grade-levels, according to the city’s Planning to Learn report from 2018. The Blue Book uses a higher target class size than the goals set in 2007 for all grades except for Kindergarten through 3.

“To many of the advocates on the working group that was the most important recommendation we made,” Tanikawa said. “And that was the one that was rejected.”

The 83,000-seat estimate came from a DOE analysis in November 2017 and was released in the February 2018 version of the 2015-2019 five-year plan. Class Size Matters estimates that the need is at least 100,000 seats based on the number of schools that are currently overcrowded, the likelihood of enrollment growth in parts of the city, and the need for class size reduction.

“I believe that they’re right,” Dromm told Gotham Gazette of Class Size Matters’ estimate. “Seat need is probably closer to 100,000, and the administration’s plan does not really reflect that. They claim that they put 57,000 seats into the budget this year, but still it doesn’t really reflect the need we feel is out there.”

The DOE predicts a decline of 4 percent enrollment, down to about 881,000 students, across public schools (the projection excludes enrollment in non-DOE spaces, charter schools, and District 75) by 2022-2023, though Dromm said residential construction, rezoning efforts, and overall city population growth are not adequately addressed in the plan. Haimson said demographic trends are difficult to predict and that there may be less overcrowding due to population shifts in certain areas over time, but the city’s population is growing fast.

Enrollment has declined over the past decade across the United States due to falling birth rates, but CBC has also reported that enrollment may increase in already crowded districts. 

The city’s population is expected to grow from 8.6 million in 2019 to 9 million in 2040, with the Bronx and Brooklyn expected to grow at the largest percentages, according to the city’s population projections.

“More and more families are choosing to stay in the city when they have children,” Haimson said. “And the mayor’s continuing to encourage development at any cost.”

When the city has undergone large-scale neighborhood rezonings, such as the ones for the Jerome Avenue corridor in the Bronx and East New York in Brooklyn, the School Construction Authority works closely with the Department of City Planning to identify the projected school seat need for those areas, according to SCA President Lorraine Grillo’s comments at a Council hearing in December. Rezoning deals between the city and local Council members often include school seat considerations, sometimes including the construction of at least one new school, like in East New York.

The new five-year plan allocates funding for 6,000 seats within six rezoning areas projected to move ahead during that time: the Hudson Square rezoning and Hudson Yards in Manhattan; Crotona Park East/West Farms rezoning in the Bronx; Pacific Park, Greenpoint Landing, Domino Redevelopment and Albee Square in Brooklyn; and Halletts Point rezoning in Queens.

According to the city’s Rezoning Commitments Tracker, the construction for a 1,000-seat school in East New York (the first neighborhood rezoning passed under de Blasio) has begun, and commitments were made in the Jerome Avenue neighborhood plan for new elementary schools in Districts 9 and 10. Commitments for at least one new school were included in four out of the city’s five large-scale neighborhood rezoning plans, with the others slated to be completed by 2023.

Council Member Vanessa Gibson of the Bronx, who chairs the Council’s capital budget subcommittee and negotiated the Jerome Avenue rezoning, said at the December Council hearing she was “pleased” about the Jerome Avenue commitments but added that the city is frequently rezoning smaller areas, and every new construction will bring families with school-age children. Griillo said the SCA is informed of smaller rezonings and uses them to inform future projections.

“(There are) the larger neighborhoods that we have rezoned from East Harlem, East New York, Far Rockaway, Jerome in the Bronx, and Inwood, but on a monthly basis on a much smaller scale we pass out smaller rezonings every single month,” Gibson said at the hearing. “We are creating an incredible amount of housing.”

The recent CBC report said there are significant shortcomings in the school construction the DOE and SCA do undertake. Not all new school capacity is created to address overcrowding, according to the report, and not all new seats are built in districts with overcrowding.

While the DOE also projects by 2022-2023 an enrollment decrease of 7 percent in elementary schools, where CBC says nearly two-thirds of the seat need is, the mayor’s initiatives like universal pre-kindergarten have added additional pressure to already overcrowded schools, though some programs are located at separate sites not run by the DOE, Edwards said.

A majority of the 93,000 seats built since 2007 have been for elementary school students, but more than 3,700 of those seats were built in districts with a “relatively low utilization,” according to the report.

Dromm said the DOE has allocated seats for districts they say have not received seats “in a while” though the need is greater in other districts. He said for District 24, the DOE has recognized that around 4,000 seats are needed to address crowding issues there, but those seats were not funded in the new five-year plan and were distributed to other areas.

At a Council hearing in December, Grillo said more seats were added in District 24 than any other district in the city, so the funding for those seats were reallocated to districts that had not yet received additional seats. (A DOE spokesperson told Gotham Gazette that the 2020-2024 capital plan includes funding for about 1,500 seats in District 24 and overall aims to create seats in districts experiencing the most critical and projected overcrowding.)

“But District 24 remains one of the top districts for seat need,” Dromm said in December. “They’re still not addressing the areas where the seat need is the greatest, and that’s concerning to me.”

Additionally, the CBC report said the city has allocated too many seats for high schools, whose overcrowding problems could be solved by utilizing the surplus of high school seats and changing high school admissions practices.

Edwards said the city actually has more seats than students — the shortage of seats in crowded high schools, according to the CBC report, is about 32,000 whereas there’s about 65,000 unused seats at high schools — and there are ways the city can maximize that space.

However, the IBO said in testimony to the Council in 2015 that using the unused seats to alleviate overcrowding is difficult because changing admissions policies can be a contentious topic, the extra seats span across boroughs so the potential for change is limited to a few areas of the city, and DOE policies like universal pre-K will continue to put capacity pressure on buildings.

In the CBC report, Edwards outlined four ways the DOE can address overcrowding that are less expensive and more efficient than school construction, which takes an average of 41 months from the start of design to the end of construction. The DOE already uses these alternative strategies to reduce overcrowding — rezoning, repurposing seats, changing admission policies, and programming — but the report said they are “underutilized” while school construction is the main method.

According to an April 2019 DOE report on space overutilization in schools, the decline in overcrowded buildings from 646 in 2015 to 615 in 2018 was due to a combination of new capacity, resiting, facility upgrades, and new facilities.

According to CBC, in 2017, 42 high schools implemented “split-session” scheduling, which allows more than the traditional eight periods to be scheduled throughout the day; 43 schools were impacted by the rezoning of school districts; and 21 schools repurposed seats through re-siting to underutilized or new buildings. Some other schools received renovations or new facilities.

The CBC report says the DOE could rezone elementary schools or allow zones to overlap or be grouped together to use more seats at under-utilized schools. The report says the majority of the school district rezonings enacted between 2014 and 2017 were to accommodate the opening of a new school and implementing them more often to adjust incoming enrollment would be more effective.

According to the report, the city could also more frequently repurpose seats by truncating some schools and expanding others to relieve crowding. Another way to repurpose seats that has “substantial potential” to address the issue is converting administrative and non-school space to instructional rooms, CBC says.

While the report specifically says that buildings with multiple schools should share administrative offices to save space, some overcrowded schools have had to convert spaces like closets to create more room.

Enforcing enrollment capacity standards at high schools would reduce overcrowding at schools, like Francis Lewis in Queens, because there are enough seats citywide for high school students and those admissions are done on a citywide basis, the report said.

Tanikawa said because of the way the city funds schools — through the Fair Student Funding Act that allocates a fixed amount per student and adds funds if the school also serves students who are poor, struggling academically, have disabilities, or are learning English — there is an incentive for principals to take more students than a building is designed to hold.

“They don’t do it to be evil,” Tanikawa said. “They want to provide a robust, comprehensive education program and in order to do that principals are forced to take more students than they really should.”

Goldstein said it is “insane” that there is no limit to the number of students, which he said would be the best way to reduce overcrowding at Francis Lewis. Instead, the DOE plans to build an annex by 2021 which will add about 10 to 15 classrooms and replace the trailers the school currently uses.

Goldstein is his high school’s United Federation of Teachers chapter leader, and he said though the UFT has guidelines for class size, there is no upper enrollment limit for neighborhood schools like Francis Lewis.

He said he taught in a trailer for 12 years and taught in a half-sized classroom last year, which posed challenges ranging from preventing students from cheating to just getting around the room. Goldstein said he hopes they can eventually get rid of the trailers, but he fears that even with extra classrooms from the annex will not be enough.

“It will be good,” Goldstein said. “Will it be perfect? No it won’t be perfect.”

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bySamantha Handler, Gotham Gazette
     

Read more by this writer.

This story has been updated with additional comment from the DOE, elements of the UFT testimony, and a couple of other notes.

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Struggling with Overcrowded Schools and Large Class Sizes, City Advances $8.8 Billion Plan Mon, 15 Jul 2019 04:00:00 +0000
The Fading Promise of Property Tax Reform https://www.gothamgazette.com/130-opinion/8586-the-fading-promise-of-property-tax-reform https://www.gothamgazette.com/130-opinion/8586-the-fading-promise-of-property-tax-reform may bdb cc speaker corey jo

(photo: Benjamin Kanter/Mayoral Photo Office)


Despite promising that in his second term he would take on the challenge of property tax reform, Mayor de Blasio appears to be shying away as many leaders have done many times before.

New York City government is extremely dependent upon its property tax, which will generate roughly $30 billion this coming fiscal year, more than any other single revenue source. Not surprisingly, New Yorkers gripe about their property taxes almost as much as about the subways.

The laws and methods used to determine and assess the tax on individual properties are extremely complex and inequitable, but reforming them is a daunting task that will inevitably make some property owners unhappy. For that reason, elected officials have long avoided tackling the problem.

The current New York City property tax system was created in 1981. A lawsuit brought by law professor William Hellerstein in 1975 challenged the legality of the property tax system state-wide as violating the constitutional requirement that all similar properties be taxed equally.

After several missed deadlines, rejected proposals, and a last-minute override of Governor Carey’s veto, a new law was passed that divided properties in New York City into four “classes,” set different percentages of the value of each class of property to be assessed (assessment ratios), limited the amount of total property tax levy to be derived from each class (class shares), and provided for phase-ins and limitations on the growth of tax revenue from different classes so that no one property or type of property would experience a dramatic increase in value and taxation as the new system was phased in.

Thirty-eight years later, New York City looks quite different, property values have soared, and there have been many unintended consequences of the design of the property tax system.

Limitations on phasing in growth in value mean that properties within the same class are often taxed at very different effective rates and the limitations on class shares of the tax levy mean that different classes are shouldering disproportionate amounts of the burden of the growth in overall property value.

One of the most egregious outcomes is that co-ops and condos -- for which the market was very different in 1981-- are in the same class as rental properties and are assessed, not on their market value, but as if they were only generating rental income. The result is many high-end apartments assessed at far lower amounts than their real value; whole residential co-op and condo buildings in some parts of Manhattan are taxed at less than the actual sales prices of individual apartments in the building.

What is to be done? In April 2017 a group of frustrated real estate developers and landlords joined with individual property owners and supportive civic and civil rights groups (including Citizens Budget Commission, which I led at the time and filed an amicus brief) to file a new lawsuit, Tax Equity Now NY LLC vs. City of New York, et al. alleging the current property tax system discriminates against primarily people of color who are low-income renters and homeowners. The lawsuit was filed in the hope that, as had happened in response to the Hellerstein case, city and state leaders would respond with urgency and determination to develop a reformed taxation system.

Instead, both city and state defendants have strenuously resisted the suit, moving to dismiss it on the grounds that the plaintiffs aren’t directly impacted and/or that the state defendants aren’t responsible. The City also infuriated City Council members who wanted to intervene on behalf of the plaintiffs by opposing their application to file a separate brief.

The motion to dismiss was filed in June but it took until September 2017 for the judge to rule that the case could proceed and until February 2018 to rule that the Council members could not intervene in the case. The City filed an appeal and all further action in the case is on hold until that appeal is decided.  

At a breakfast hosted by the Association for a Better New York the day before he was re-elected in November 2017, I asked Mayor de Blasio whether he was going to take on property tax reform. He answered directly and forthrightly that the system needs to be more fair and transparent but that we cannot afford to reduce substantially the revenue it generates and that relying on the judicial system to resolve the problem would be a mistake.

He estimated that it would “take a year or two” to bring all the stakeholders together and come up with the needed reforms and that it would require being “blunt” about the challenges. He said: “I am ready to do it….When I say something that definitively, I mean it…We will create tax reform.”

It took until May 31, 2018, more than a year after the Tax Equity Now case was filed and now a year ago, for the Mayor and the City Council Speaker Corey Johnson to announce the formation of an Advisory Commission on Property Tax Reform. Co-chaired by former city Housing Commissioner Vicki Been, then faculty director of the NYU Furman Center, and former First Deputy Mayor and then Interim COO of CUNY Marc Shaw, the commission was charged to “develop recommendations to reform New York City’s property tax system to make it simpler, clearer, and fairer, while ensuring that there is no reduction in revenue used to fund essential City services.”

No deadlines were specified, but the commission was instructed to conduct at least 10 public hearings.

All the public hearings and meetings were recorded and are available online. The last one was held this past February 28. Yet there is still no word on what the commission will recommend or when it will publish its report. The state legislative session is almost over so it is too late to achieve any changes this year and Been has become a deputy mayor with a lot more on her plate.

So the mayor’s promises notwithstanding, an opportunity to rationalize our property tax system and make it more fair has been missed and the commission looks more like a stalling device than a sincere effort to make tough decisions. Who wants to make New York property owners unhappy during a presidential campaign? As was the case four decades ago, it appears that we will need a lawsuit to compel elected officials to make tough decisions.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

 

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

 

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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The Fading Promise of Property Tax Reform Tue, 11 Jun 2019 04:00:00 +0000
The Rainy Day Fund New York Needs https://www.gothamgazette.com/130-opinion/8587-the-rainy-day-fund-new-york-needs https://www.gothamgazette.com/130-opinion/8587-the-rainy-day-fund-new-york-needs mayor bdb fiscal year budget

(photo: Ed Reed/Mayoral Photography Office)


With so much attention focused on the mayor’s presidential campaign, rent regulation renewal, and the state of the transit system, most New Yorkers are unaware they will have the opportunity this fall to vote to dramatically change their city government.

The 2019 New York City Charter Revision Commission is considering what amendments to the City Charter, which defines the structure and powers of city government, it will recommend to voters for a yes or no vote on the November ballot. Notable proposals include ranked-choice voting for local elections, enhancing community board review of land use proposals, and multiple changes to the city’s budget process.

One budget proposal the commission should approve and advance to voters in November is the creation of a Rainy Day Fund (RDF). An RDF is essentially a savings account that would allow city government to put away revenues received when the economy is growing and use them to stave off the most crushing service cuts and tax increases during an economic downturn or catastrophic emergency—the rainy days.

To weather the last two recessions, the city reduced police and ambulance staffing, cut library hours, suspended recycling, and increased personal income, sales, and property taxes. A well-structured RDF can ameliorate the need for this level of municipal pain, helping everyone from those who depend on city and social services to individuals and businesses feeling the strain of high taxes.

By and large, charter provisions and state laws enacted in response to the 1970s New York City fiscal crisis provide a strong budgeting and financial management framework that has served New York well—producing balanced budgets and prudent revenue estimates, while allowing the city to fund services New Yorkers desire.

Ironically, the city charter’s balanced budget requirement, among the most stringent in the nation, is what makes using an RDF impossible. Balancing the annual budget requires city services delivered in one year to be funded only with revenues generated that same year. Saving money in a strong economy to use later in a recession misaligns that timing, and violates the accounting rules relied on by the charter.

The solution is for the charter commission to leave the charter’s budgeting and financial management framework intact except to seize the opportunity to improve the charter by allowing an RDF, well structured to preserve both long- and short-term stability.

Absent an RDF, the city has devised legal work-arounds to provide some fiscal cushion. The city pre-pays expenses, freeing up money in the next year. The city has also used its Retiree Health Benefits Trust—money put aside to pay for municipal employees’ retirement health benefits—as a de facto RDF by paying for current bills with the trust’s assets rather than budget revenues.

These workarounds are problematic. Not enough money can be put aside; there are limits to what and how many expenses can be prepaid. In addition, there is no requirement to put money aside even in the best of times. Finally, using the RHBT as de facto RDF makes future taxpayers pay for current bills, which is hardly fair to the next generation.  

True, the city has set aside some funds. The current financial plan includes $1.25 billion annually for reserves, but this pales in comparison to the need. Citizens Budget Commission estimates the projected three-year revenue shortfall from a recession comparable to the past two would be $15 billion to $20 billion.

How would a well-designed RDF be structured? The first step is to determine the right size of the fund. Based on past revenue trends, CBC estimates that 17 percent of tax revenues would be a good target size to mitigate a recession or emergency’s most damaging impacts.

Second, regular deposits should be required during economic expansions. CBC recommends annual deposits of 75 percent of all tax revenues in excess of 3 percent growth; this would allow spending on services to grow in excess of long-term inflation and still generate substantial RDF resources. Had this been in place during the current record-long recovery, the city would now have nearly $9 billion in its RDF.

Finally, withdrawals should be limited to periods of recession or emergency. Economic triggers should be defined in law and RDF funds should not all be used in one year.  

By putting a Rainy Day Fund on the ballot, the charter commission would provide New Yorkers with an important opportunity to strengthen one of the few flaws in the city’s budgeting processes and would create significant momentum for the changes needed in state law.

Yes, some more political and proximate issues may be more galvanizing, and sadly, elected leaders and the public too often accept as inevitable the pain of hard choices during a recession. However, the annual impact of modest deposits in the good times will be significantly outweighed by preserving the services New Yorkers need during times of economic hardship.

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Andrew Rein is president of Citizens Budget Commission. On Twitter @cbcny.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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The Rainy Day Fund New York Needs Mon, 10 Jun 2019 04:00:00 +0000
Taxi Medallion Exposé Drives Home Key Budget Lesson https://www.gothamgazette.com/130-opinion/8556-taxi-medallion-expose-brings-home-key-budget-lesson https://www.gothamgazette.com/130-opinion/8556-taxi-medallion-expose-brings-home-key-budget-lesson medallions oped

(Photo: Ed Reed/City Council)


Last week, the New York Times published another blockbuster investigative series by reporter Brian Rosenthal, this time on the misleading and predatory practices which led to inflated prices of New York City yellow taxi medallions over the last decade.

The compelling stories of taxi drivers who thought they were buying into the American dream by purchasing taxi medallions, only to find their incomes drastically reduced by the competition of Uber and Lyft, has been a topic of public discussion for some time, but Rosenthal’s reporting provides new and detailed documentation of how lenders and brokers drove up the prices and encouraged purchases without concern as to whether the buyers had the wherewithal to repay their loans.

The story is reminiscent of the over-leveraged home buying encouraged and condoned by financial services firms and banks that contributed to the national housing bubble and the recession in 2008.   

In his second article on the taxi industry, Rosenthal focused on the regulatory agencies that seemingly should have known something was wrong when medallion prices skyrocketed but did nothing to intervene. Indeed, the New York City Taxi and Limousine Commission even ran ads promoting medallion sales as a great investment. State and city officials are now investigating; legislators are looking at ways to aid struggling medallion owners.

The situation of many taxi drivers and their families (especially those who have died by suicide) is unspeakably sad and it is understandable that elected leaders want to help them. But the rise and fall of taxi medallion prices also contains a larger message and lesson for government about the dangers and unintended consequences of relying on one-time revenues to fund government expenses.

Fiscal watchdogs warn against reliance on “one-shots” because they artificially inflate the amount of revenue available and will have to be replaced by other resources over the long term. That is why organizations like Citizens Budget Commission (CBC) urge that one-time windfalls be used to pay down debt or bolster reserves, not to start new programs or pay for employee salaries and benefits.

CBC has repeatedly criticized the city for including large amounts of anticipated taxi medallion sales revenue in its financial plans since it began doing so in 2011:

“Balancing the budget with these one-shots does not address the structural problems– notably, escalating health insurance and debt service costs—but masks the problem temporarily and delays the discourse needed to adopt more enduring, if politically tougher, solutions. In addition, one-shots can be unreliable; if something does not work as anticipated, the savings will not materialize.”

The same concern holds true for one-shots at the state level. New York state government has received over $11 billion in one-time revenue from settlements of litigation with financial institutions over the past five years. This funding has been used for a variety of initiatives, from infusions into economic development schemes like the “Buffalo Billion” to front end development and construction costs of the Mario M. Cuomo Bridge. Regardless of the merits of these projects, it would have been more prudent and appropriate to use these one-time revenues to reduce the state’s indebtedness and/or increase its rainy day reserves to be better prepared for the inevitable time when there is an economic downturn.

And Rosenthal’s investigation highlights another reason for avoiding reliance on one-shots: not only do they obscure the city’s true fiscal picture but they can create pressure on officials – albeit sometimes unintentional or even unconscious – to maximize resources to fill a budgetary need.

The city has repeatedly included as much as $1.5 billion in taxi medallion sales revenue in its four-year financial plans. This is a great deal of revenue and suggestions that it might be achieved through unfair means would probably not have been favorably received by budget directors happy to have this revenue in their projections to reduce out-year deficits. No one was motivated to look a gift horse in the mouth.

The state and city comptrollers have joined CBC in criticizing the city’s reliance on medallion sales receipts and the amount expected has been reduced and stretched out over longer lengths of time as the market changed and then tanked, and was completely removed from the mayor’s executive budget starting in fiscal year 2019 and since.

It would be a great irony if, instead of leading to more than a billion in revenue, the taxi medallion market’s problems lead to significant city spending to purchase owners’ loans or bail them out in some other way, as some legislators are contemplating. The lesson is that when a sudden and untested revenue source appears, don’t count on it because it may well be too good to be true.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

 

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

 

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Taxi Medallion Exposé Drives Home Key Budget Lesson Tue, 28 May 2019 04:00:00 +0000
What’s the [DATA] Point? 1.28 Cents, the Prospect of a Vehicle-Miles Traveled Fee to Fund Transit Infrastructure https://www.gothamgazette.com/state/8544-what-s-the-data-point-1-28-cents-vehicle-miles-traveled-fee https://www.gothamgazette.com/state/8544-what-s-the-data-point-1-28-cents-vehicle-miles-traveled-fee whats the data point


What's The [Data] Point? Episode 74 -- 1.28 cents, Patrick Orecki [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

patrick orecki cbcNew York State is underfunding upkeep of its roads and bridges to the tune of billions of dollars a year. There are several reasons for this, and potential fixes, including a vehicle-miles traveled fee, which Citizens Budget Commission's Patrick Orecki recently explored in a CBC report. He joined the podcast to explain the state of disrepair, why it matters, and how a smartly-done VMT could make a big difference.

Then, after that 20-minute conversation, hear a recent panel event that CBC and partners hosted in Albany on the prospect of a VMT.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What’s the [DATA] Point? 1.28 Cents, the Prospect of a Vehicle-Miles Traveled Fee to Fund Transit Infrastructure Thu, 23 May 2019 04:00:00 +0000
De Blasio's Budget Savings Plan Contains Few Real Efficiencies, Experts Say https://www.gothamgazette.com/city/8526-de-blasio-s-budget-savings-plan-contains-minimal-real-efficiencies-experts-say https://www.gothamgazette.com/city/8526-de-blasio-s-budget-savings-plan-contains-minimal-real-efficiencies-experts-say Mayor de Blasio city budget executive plan

Mayor de Blasio (photo: Michael Appleton/Mayor's Office)


Mayor Bill de Blasio’s much-touted budget savings program is not what he has made it seem.

After rapidly growing the budget over his first five years in office and resisting calls to find significant efficiencies at city agencies, de Blasio this year instituted his first “program to eliminate the gap,” or PEG, to achieve hundreds of millions of dollars in “savings.” But though the mayor boasted at his executive budget presentation of $916 million in identified savings over the current and next fiscal years -- including $629 million in agency PEG savings -- his budget has little by way of true city agency cuts to existing spending.

The mayor’s spendthrift approach has led to a $20 billion increase in the city budget since he took power, while savings and rainy day funds, though solid, have remained below optimal levels, according to budget experts. Exceedingly good economic times have allowed the mayor to spend somewhat lavishly on programs and personnel without having to make many tough decisions about cuts.

The city is also maintaining about $5.72 billion in reserves each year, though the mayor has not added to them this year and the City Council is pushing for an additional $250 million infusion.

The mayor’s latest spending plan, a whopping $92.5 billion executive budget proposal for the 2020 fiscal year, is no exception to his spending growth trend. And as de Blasio touts new savings, fiscal watchdogs are casting doubts and poking holes.

One in particular, Citizens Budget Commission, says city budget officials are misclassifying savings, passing off re-estimated spending and cost shifts as efficiencies at city agencies.

Instituting a targeted PEG for the first time this year, de Blasio required city agencies to make specific spending reductions through various means -- efficiencies, re-estimates of spending and revenue, and service reductions. The mandated PEG, with target amounts for each agency set by the mayor’s budget office, came after years of the administration relying on a Citywide Savings Plan, which had agencies offer voluntary savings, re-estimates, and revenue-raising ideas.

All told, the mayor’s executive budget estimated the $916 million in savings between fiscal years 2019 ($419 millions) and 2020 ($496 million). An analysis by Citizens Budget Commission, a nonprofit fiscal watchdog, of the overall savings plan shows that for 2020 the Mayor’s Office of Management and Budget identified about 62.5% of the savings from what it classified as agency efficiencies.

Melanie Hartzog, the director of the Mayor’s Office of Management and Budget, in testimony before the City Council at a budget hearing last month, stressed the “high levels of efficiency savings” at city agencies that were found through the PEG. That included service reduction for the first time under de Blasio.

“In Fiscal Year 2020, the first full year impacted by the PEG, efficiencies account for two-thirds of the savings. To achieve these savings agencies streamlined and improved practices, yet maintained service levels,” she said.

But CBC’s analysis shows that the estimate of efficiencies in the executive budget savings plan may be overblown. Agency efficiencies in fiscal year 2020 only accounted for about 20.77% of the savings, while re-estimates and funding shifts accounted for the bulk, about 66.4%, according to the analysis, performed by CBC’s Riley Edwards.

City Council Member Daniel Dromm, chair of the finance committee, echoed CBC’s concerns about finding true efficiencies at last month’s budget hearing, saying the Council “is struggling to understand the purpose of the PEG.” He noted, as CBC pointed out, that the PEG and savings plan together did not find sufficient efficiencies or recurring savings at agencies. He noted that PEGs are supposed to force administrations to find “true efficiencies and recurring savings.”

Dromm pointed out that the mayor has typically relied on the voluntary CSP instead of a PEG, during a period of healthy growth and positive economic conditions.

“Since the implementation of that program, the Council has been urging the administration to search for savings more rigorously because the majority of the program consisted of accruals, re-estimates, and increased revenue projections that would have occurred even in the absence of a savings program,” Dromm added. “So, when the administration announced a mandatory PEG this year, the Council was hopeful that the mayor was finally getting serious about reining in inefficient spending. Unfortunately, the result of the PEG is just more of the same.”

CBC experts point out that certain categories of savings that OMB classifies as efficiencies aren’t truly that, including swaps where state or federal funds are used in place of city funds or the hiring freeze that OMB says saved about $116 million across fiscal years 2019 and 2020. According to OMB, the hiring freeze involves permanently taking down 1,600 positions in the executive budget (many are currently filled and will be eliminated when they become vacant without affecting agency performance) after 1,000 vacancies were already eliminated in November. The freeze reduced net planned headcount growth this year for the first time under de Blasio and is meant to create savings every year till 2023.

“Because we’re dealing with positions that are already vacant, we consider that a re-estimate rather than an efficiency,” said CBC’s Edwards, in a phone interview.

CBC director of city studies Ana Champeny said this savings plan has largely been a “continuation” of past years’ plans. “There was a change in their approach in setting the targets for the agencies but they still haven’t delivered substantially more efficiency savings,” she said. According to CBC, these could be achieved through redesigning programs and shrinking or eliminating inefficient ones, as the mayor did by eliminating Extended Time Learning at Renewal and RISE schools; by using technology to improve operations; sharing resources across agencies; finding alternative service providers within or outside the public sector; and strengthening centralized management of cross-agency operations.

Champeny said the city should not stop looking for savings through re-estimates or funding shifts, which are “routine budget management that you would expect every administration to be doing. Our criticism is that there should be more PEG savings, more efficiency savings in addition to this routine budget and fiscal management.”

Ideally, efficiency savings in one year would equal about one percent of the city-funded budget, she said. “That’s about $700 million in one year, not across two years,” she said.

Nicole Gelinas, senior fellow at the Manhattan Institute, a think tank, concurred. “I think the PEG is pretty superficial in the context of this larger budget,” she said, noting that the executive budget increases overall agency spending by about $1.4 billion compared to the mayor’s initial proposal released in January, allowed by higher revenues than earlier projections. Those higher revenues “are giving them some room to increase spending while sticking to this narrative of savings,” she said. “Overall, agency spending is not shrinking by any means. It would be hard to call this an austerity program.”

“It would be good if agency spending pretty much kept pace with inflation, going up 1.5-2% a year,” she said.

Budget watchdogs have also repeatedly urged the administration to find long-term recurring savings rather than temporary ones. Gelinas pointed out that hiring freezes, in particular, “don’t last forever” as a source of savings.

“It’s kind of superficial because the mayor has increased hiring by so much already that it’s kinda time for a pause,” she said. “Hiring freezes are not very good management. This is the same problem at the MTA. If you need a new person to do something, you should hire that person. If there’s something that the government is doing that it shouldn’t be doing anymore, repurpose that person. But just a sort of general hiring freeze oftentimes means positions that should be filled aren’t being filled. So it’s kind of the opposite of efficient.” 

De Blasio has overseen a large increase in the city workforce, from about 297,000 employees when he took office to roughly 332,000 now. Still, he has budgeted for many more positions at various agencies that have gone unfilled each year, with many of those now “frozen” and the act of keeping them empty being counted toward savings.

OMB spokesperson Michael Greenberg said in a statement Tuesday, “Our aggressive approach helped us meet ongoing, fundamental needs, and balance the budget. We will continue to find ways to save money for New Yorkers in future financial plans.”

In a Thursday statement, after this article was published, Greenberg pushed back against the criticism from Gelinas and CBC. "The 2,600 positions we have permanently eliminated since November will lead to hundreds of millions of dollars in savings, much of it recurring annually, and agencies will provide the same level of service with fewer employees. Despite what others might say, this is the actual definition of 'efficiency savings,'" he said. 

Short of creating more efficiencies, the city risks major service reductions should an economic downturn set in. Even without a downturn, the city faces a budget gap of $3.5 billion in 2021 and $3 billion annually in the years after, according to its own documents. While those numbers are manageable and fairly typical, they become much more concerning if there is a recession.

“A recession could easily double or triple these out-year budget gaps that we already need to fill,” Champeny said. “Right now you have the ability to take the time and do a careful analysis of where you can make efficiency changes or improve your processes whereas if you’re cutting during a recession, you’re sometimes looking for quick savings and you’re not as precise and you’re going to have more negative impacts in services reduction.”

Gelinas added, “The city always depends on revenues coming in higher than expected and then because it says it conservatively budgeted, it has these extra revenues. So these budget deficits basically disappear. But that only happens if the city’s economy is doing well. If we do fall into a recession...then suddenly these are real deficits so you’d need a lot more than a billion dollars in savings in two years. So that’s when you really start to see layoffs and service cuts.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note - This article has been updated with additional details about the administration's partial hiring freeze. 

Note - This article has been updated with additional comment from OMB spokesperson Michael Greenberg. 

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De Blasio's Budget Savings Plan Contains Few Real Efficiencies, Experts Say Tue, 14 May 2019 04:00:00 +0000
Former City Taxi Commissioner on Regulating the App Companies and Saving the Yellows https://www.gothamgazette.com/city/8521-former-city-taxi-commissioner-on-regulating-the-app-companies-and-saving-the-yellows https://www.gothamgazette.com/city/8521-former-city-taxi-commissioner-on-regulating-the-app-companies-and-saving-the-yellows Meera Joshi taxis

Meera Joshi, right, at a rally (photo: Benjamin Kanter/Mayor's Office)


Meera Joshi’s five-year tenure as the head of the New York City Taxi and Limousine Commission coincided with a tumultuous time for the industry she was tasked with overseeing and regulating. Joshi, who left the de Blasio administration in March, joined the What’s The [Data] Point? podcast from Citizens Budget Commission and Gotham Gazette to discuss her tenure, the taxi industry and key steps she spearheaded to regulate it, and what’s next for app-based for-hire vehicle companies like Uber and Lyft.

The introduction and explosion of those ride-hailing apps has shaken the overall for-hire vehicle industry, disrupting the traditional taxi sector in New York City and beyond, and creating new challenges in terms of street congestion, driver working conditions, and more. In two years, the number of for-hire vehicles in New York City grew 59% and they now outnumber yellow and green taxi cabs my many thousands, having surpassed taxis in 2017, according to TLC data. As of last year, there weree 13,587 licensed yellow cabs in the city, along with 3,570 green cabs, and 107,435 app-based for-hire vehicles.

At the same time, the value of taxi cab medallions has depreciated from a peak over $1 million to $175,000, leading to financial hardship and even suicide, and questions about a government bailout.

On the podcast, Joshi discussed the challenges of regulating an emerging business model while also attending to the decline of another, as well as other issues that came up during her tenure as chair and CEO of the Taxi and Limousine Commission, a position she was appointed to in 2014 by Mayor Bill de Blasio. Joshi had served under the pior TLC commissioner and also held positions at the city’s Department of Investigation and with its police oversight body, the Civilian Complaint Review Board.

During Joshi’s five years leading the TLC, the de Blasio administration, at times working with the City Council, sought to be aggressive in response to the industry disruption posed by Uber and Lyft.

Under her and de Blasio’s leadership, the city made a failed attempt to extend some regulations to the for-hire apps in 2015, when the companies were smaller, losing a battle over placing a cap on the number of new cars that could be licensed after a high-profile battle with the companies and their supporters. The Taxi and Limousine Commission did mandate that larger app-baseds companies share trip data with the city, taking a significant step toward understanding how the emerging sector was influencing traffic and travel patterns in the city.

The city wound up getting the cap in 2018, while also creating sweeping new pay protection for for-hire drivers. New York City was the first municipality in the country to take the series of actions, leading to significant changes for both the companies, their traditional taxi competitors, and the city’s transit scene.

“In New York City, we have a good history of data-driven policy,” Joshi said on the podcast. She pointed out that taxi cabs have been tracked in great detail since 2007. The city Department of Transportation uses that information to understand traffic flow and the TLC uses it to make driver protection, licensing, and other regulations. The city’s mandate that app-based taxis share trip data followed this precedent and allows for similar data-driven policy, according to Joshi.

In what would become the final months of her tenure, New York City rolled out several new regulations that have impacted the app companies.

Last year, the City Council, with the blessing of Mayor de Blasio, voted for a one-year cap on new for-hire vehicle licenses, unless for wheelchair accessible cars, and mandated a minimum wage of $17.22 per hour for rideshare drivers. It also empowered the TLC to set minimum pay rates. These actions enabled the TLC to study the impact of ride-hail apps on the city’s congestion, among other dynamics. Uber and Lyft have opposed these legislative and regulatory actions.

The city’s recent actions have come under legal scrutiny since they were announced, but the city has prevailed when legal challenges have been filed and the cases have been closed. “This is an industry that is very litigious,” Joshi admitted.

New state congestion charges for taxis ($2.50) and rideshare vehicles ($2.75) were ruled to be legal by a New York judge in February. This month, another judge upheld the new minimum wage rates against challenges from Lyft and Juno. However, the app companies’ lawsuit against the one-year cap is still ongoing.

The new regulations are having clear effects. In April, Uber and Lyft both stopped accepting new driver applications, perhaps because of the new utilization rate structure and wage minimums, not to mention the vehicle license cap. The utilization rate structure effectively penalizes rideshare companies for having a large number of drivers on the road at the same time who are not moving passengers.

During the interview, Joshi explained that “40% of every hour the app drivers that are on the road don’t have passengers. The driver pay rules try to address that balance in a way that works off of incentives and penalties. You’re going to have to pay more if you can’t keep your drivers busy,” she said. She pointed to the April announcements from Uber and Lyft as being “great news” for existing drivers, because they are the ones most hurt by oversaturation.

Joshi also believes the move was “a good example of where regulation and the market worked together,” where “the regulation is aimed at the problem and the reaction came from the companies.” This was the main goal of the policy, according to Joshi, who said “closing the pool is what we really wanted to get at.”

On May 8, some app-based drivers in New York and other cities across the country went on strike in protest of low wages and low quality of life at work, though some in New York hailed the city’s new laws and said they were striking in solidarity with drivers elsewhere and against the companies more generally. This came just ahead of Uber’s initial public offering (IPO) of stock. The New York Taxi Workers Associations coordinated the strike in New York City.

Despite her criticisms of ridesharing apps, Joshi also recognized the benefits that the industry had for the city. She said that “this is a good service, a popular service filling a void.” According to Joshi, the boroughs outside Manhattan have seen the biggest benefit from the apps and the effect on those areas “was the concern when the cap legislation was passed.”

However, Joshi also said that TLC data has shown “that there is still continuous growth” in mobility in boroughs other than Manhattan through the apps, which she attributes to the “built-in excess in the business model.”

While Joshi oversaw these new regulations and implemented them in the face of opposition from the major companies, she has also been criticized for negative consequences that the growth of these apps, including the falling value of taxi cab medallions and wages for taxi drivers, to the increased stress and suicide rates of drivers.

When asked why she is not in favor of a bailout for taxi medallion owners, Joshi said that “the problem stems from the loan,” pointing out that taxis earn profits when they are on the road and saying that banks were irresponsible in their lending.

“So many of these taxi medallions have outsized loans attached to them because the price was inflated,” comparing the situation to the housing bubble of the late 2000s. She believes that a bailout would primarily benefit the banks who offered loans for taxi drivers to acquire the medallions, saying, “I don’t know if the individual owner is better off, because they still may owe a tremendous amount of money to the banks.”

Joshi believes that banks “are going to have to write [the loans] down anyway” and “resize them for what they’re selling for now, because they have to take the loss and they might as well keep the borrower.”

As Joshi moves on to a position at NYU’s Wagner School of Public Policy as a visiting scholar and a policy advisor at Remix, the debat eover the future of the taxi industry in New York City continues, with some of her moves hailed as major progress to help save the yellow taxis and improve the lives of drivers of those and other for-hire vehicles, while others say the city has not acted quickly or aggressively enough to help taxi medallion owners, for-hire vehicle drivers, and others.

Inarguably, New York City was the first U.S. city to effectively increase regulation of the app-based for-hire vehicle companies, despite significant opposition from the industry.

Additionally, TLC was one of the agencies responsible for implementing Mayor Bill de Blasio’s Vision Zero street safety program. Fatalities involving TLC vehicles dropped 50% during Joshi’s tenure. Lastly, Joshi has been credited with overseeing an increase in wheelchair-accessible vehicle availability.

[Listen to the full conversation: What's The [Data} Point? with former Taxi Commissioner Meera Joshi]

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by Andrew Millman, Gotham Gazette

Read more by this writer.

Ben Max contributed to this story.

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Former City Taxi Commissioner on Regulating the App Companies and Saving the Yellows Sun, 12 May 2019 04:00:00 +0000
What's the [Data] Point? 125,323, with Former Taxi Commissioner Meera Joshi https://www.gothamgazette.com/city/8507-what-s-the-data-point-125-323-with-former-taxi-commissioner-meera-joshi https://www.gothamgazette.com/city/8507-what-s-the-data-point-125-323-with-former-taxi-commissioner-meera-joshi whats the data point


What's The [Data] Point? Episode 73 -- 125,323, Meera Joshi, former chair of the city's Taxi & Limousine Commission [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

wtdp meera joshiMeera Joshi was appointed by Mayor Bill de Blasio in 2014 to chair the city's Taxi & Limousine Commission, which sets rules for and has oversight over the city's taxi industry, including yellow and green cabs, app-based for-hire vehicles like Uber and Lyft, and more. Joshi left city government in March and joined the podcast to reflect on her tenure at TLC, including the major challenges of dealing with declining yellow and green cab sectors and booming for-hire vehicle sector.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

Read more by this writer.

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What's the [Data] Point? 125,323, with Former Taxi Commissioner Meera Joshi Thu, 09 May 2019 04:00:00 +0000
There's Plenty of Money in the MTA Capital Plan, It's Just Not Being Spent https://www.gothamgazette.com/state/8505-there-s-plenty-of-money-in-the-mta-capital-plan-it-s-just-not-being-spent https://www.gothamgazette.com/state/8505-there-s-plenty-of-money-in-the-mta-capital-plan-it-s-just-not-being-spent Cuomo subway MTA

Gov. Cuomo inspects track work (photo: Kevin P. Coughlin/Governor's Office)


The subway (plan) is delayed again.

While subway service has improved since the nadir that led to the current (and controversial) “state of emergency,” it’s obvious to anyone who rides the system enough or just watches the New York City Transit Twitter feed that there’s still a ways to go before everything is at or near full strength.

But while the Metropolitan Transportation Authority (MTA) needs a funding stream that’s sustainable and long-term, the authority has been unable to spend many billions of dollars already appropriated to it by both the city and state, money that’s supposed to be spent on expansion projects, getting the trains to a state of good repair, and more.

In other words, there’s plenty of money in the MTA capital plan, it may just be in the wrong hands.

The MTA’s 2015-2019 plan for capital projects is in its final year, but as the months tick by, it looks increasingly likely that the plan won’t wind up anywhere close to completed, raising questions about what will make it into the next plan and what will happen to billions of dollars allocated to this one.

By the MTA’s own account, only about $11.3 billion of the $32 billion pledged to fund the plan in 2016 has actually been delivered to the agency. It’s a function of the MTA’s inability to efficiently and effectively complete projects as well as poor planning and delays that go into the design of the capital plan, which covers everything from major expansion and repair projects to track replacement and signal upgrades, and deals with the city’s subways and buses, as well as the commuter rails.

While both New York City and State pledged record amounts to the plan when funding was announced -- a joint agreement among the MTA, Governor Andrew Cuomo, who effectively controls the state authority, and Mayor Bill de Blasio -- neither entity has given the agency anything close to the full amount promised over the life of the plan.

And there’s a particularly large shortcoming when it comes to the state’s pledge of $8.3 billion given that among several key provisions of the funding deal, which Cuomo and de Blasio haggled over for months, is one that says the money from the state and city are to be the last dollars spent.

As transit watchers turn their attention to the upcoming 2020-2024 MTA capital plan, it looks increasingly likely that the $7.3 billion New York State hasn’t sent the MTA for the current five-year plan will not be delivered to the agency during the expected time frame, or possibly ever. Complicating the upcoming picture are new MTA revenue measures, including congestion pricing, passed in the new state budget April 1.

When the 2015-2019 capital plan was unveiled, Cuomo and de Blasio put out a press release in which both men hailed the “historic investment” the two levels of government were making in the authority that, among other things, runs the New York City subways and buses. And both men promised big money.

The mayor pledged that New York City would give $2.5 billion to the capital plan, and the governor said that the state’s contribution would be $8.3 billion. But at the moment, the MTA’s own numbers show that as of March 31 the authority has only received $805 million from the state and $668 million from the city. On the other hand, the authority has issued $4.1 billion worth of its own bonds to finance the plan.

This spending pattern was designed like this from the start. In the same press release where de Blasio and Cuomo hailed their respective historic investments, it was noted that the state and city contributions would come proportionally and at the same time. Outside the realm of press release promises, state law made clear that the majority of the money would be the last dollars in to the plan as the 2016 budget language laid out:

“The additional funds provided by the state pursuant to section one of this act shall be scheduled and made available to pay for the costs of the capital program after MTA capital resources planned for the capital program, not including additional city and state funds, have been exhausted, or when MTA capital resources planned for the capital program are not available.”

Where’s the Money
This too was by design, according to a Cuomo administration official, who said that the last-dollar-in formula was to ensure that the authority spent efficiently and quickly on the plan.

“The MTA was in a state of emergency at the time we did these capital funds,” the official told Gotham Gazette during a background call under the condition of anonymity, “and we wanted to make sure that not only were we sending a record capital program, but then those dollars were going to go out the door. But the MTA had a practice of doing was enacting the capital plan funded with its funds and then using a portion of the proceeds that were committed to fund the debt service on the capital plan, but actually for operating,” the official said.

While this 2015-2019 capital plan, like those that came before it, continues to lag, the Cuomo administration official told Gotham Gazette that no part of the plan was being held up due to a lack of funds, and defended the last-dollar-in policy as ensuring the plan gets done.

“So why the agreement says that they should contribute first? Because we wanted to make sure that they did not not execute the plan,” the official said. And Freeman Klopott, a spokesperson for the governor’s budget office, insisted that the money is available to the MTA whenever it asks.

“The over $1.4 billion in the FY 2020 Enacted Budget is now available, as is the balance of the over $8.6 billion State contribution,” Klopott told Gotham Gazette by email, while also promising that whatever amount of funding is necessary for the plan beyond 2019 will still be available to the MTA.

But there’s also the question of where the money owed to the MTA in the current capital plan is going to come from. The latest report on the MTA’s finances from Comptroller Tom DiNapoli, released in October 2018, noted that “[t]he State has not yet identified the sources of $7.3 billion of its funding commitment, and the City has not identified the sources of $1.8 billion of its commitment.”

A spokesperson for Mayor de Blasio told Gotham Gazette that the city “will meet our statutory obligation which is explicit about how the monies flow” when asked about the status of the money pledged to the MTA.

The Cuomo official who spoke to Gotham Gazette disputed the comptroller’s report, said that the money is appropriated in the budget, and that it “will come out of the state’s general fund. The state’s general fund is over $100 billion, so it will come out of that, and it will come out as soon as they need the funds.”

Big Budget Questions
While the MTA finds itself in a position of facing down a capital plan costing perhaps $40-$60 billion, in large part to potentially fund MTA New York City Transit President Andy Byford’s Fast Forward plan, which involves tremendous amounts of work to get the system to a modern state of good repair, transit experts say it’s difficult to parse whether or not the authority is actually making do without the state money.

“These are not basic questions, they’re actually kind of hard questions, because I'm not really sure how the MTA is making do without this money, or how they get it back from the state,” transit expert Ben Kabak, who writes the Second Avenue Sagas website, told Gotham Gazette.

Kabak said that when the money is slow to arrive, the agency first cuts back on “cosmetic upgrades or things that aren’t important to keep the system running” to focus on signals and tracks and train cars. But over time, he said, as the money continues to not arrive “you end up with this sort of maintenance gap, where something that might have happened a year and a half ago, is delayed because of budget negotiations, and they have two stations that they need to catch up on instead of just one.”

A recent report from watchdog organization Reinvent Albany that focused on a number of MTA reforms backs up Kabak’s point on the maintenance deficit. In a look at the agency’s capital spending, Reinvent Albany found that the agency had only committed to spending $2.3 billion on signal modernization in the most recent capital plan despite the MTA’s most recent 20-year needs assessment determining the authority needed $3 billion. In addition, while the MTA needed almost 6,000 new subway cars in the span of the 2010 to 2019 capital plans, the authority only purchased 863 new cars.

“The fact is, [the MTA] hasn’t spent what they've needed to on things like signals and buying more subway cars and buses,” Rachael Fauss, a senior researcher with Reinvent Albany and author of the massive new MTA report, told Gotham Gazette. “Those are the areas where they’ve really not invested the way they should have.”

One place where the governor’s office and Reinvent Albany agree is on the design of the majority of the state’s appropriation for the MTA. But where the governor’s office suggests it is a good way to make the MTA accountable, Fauss criticized the practice as a driver of extra debt for an agency whose operating budget is 16% debt service.

“The way that that money was set up from the very beginning was problematic, because it was never guaranteed to be given to the MTA until it is finished borrowing money,” Fauss said. “I think it was always set up in a way that it was a false promise of full state funding, and it's been simplified to the level where it's been explained as it is a direct contribution when it's when it was extremely conditional.”

Where the Cuomo administration official told Gotham Gazette that the MTA wasn’t borrowing any more money than the agency had agreed to when the current capital plan was agreed to, Kabak and Fauss criticized the mounting debt as something that contributed to slowing down the agency’s ability to finish the plan close to on time.

“I think the better approach would be for the state to just directly fund all of these projects, and not fund a bond issuance, or something along those lines. If you're building out a new subway, that is going to generate more passengers and more revenue, you can bond that out, that makes sense,” Kabak said. “But if you're just investing in state of good repair service, or state of good repair projects, and then you really just pour more debt into the existing system in the hopes that the ridership will either grow organically or not start declining to boost those revenues you end up in a situation where they're at now where they're just sort of paying out debt to continue to maintain the current system,” he said.

“We're in the fifth year of the plan,” Fauss said. “So is it always meant to be that five-year capital plans drag on for a decade, and that the money from the state comes in at the last minute? Borrowing at the MTA is reaching such an unsustainable level that if the deal all along was to have MTA borrow some money, maybe that deal was bad to begin with.”

She added that “16% of [MTA] operating expenses are eaten up by debt right now. And it's going to go up to even more than that in the future, to a higher percentage. So when you've got debt service eating up the operating budget, that means less crews to do cleaning, that means less maintenance, that means fewer workers trying to do the same work when morale at the agency isn't exactly at an all-time high right now.”

That political leaders and the MTA have just come to accept that the MTA capital plans will now stretch out well past five years is also something that hurts the transparency of the plans when the agency plays catch up to finish them. Per the new Reinvent Albany report, the MTA “provides the total spending on each plan over its entire lifetime at the end of each year” instead of showing how much the authority spends per year per plan.

Having done its own math to determine what spending was each year, Reinvent Albany found that in 2017 the MTA was still spending $212 million on the 2005-2009 capital plan and close to $3 billion on the 2010-2014 capital plan.

And as the current capital plan reaches what’s supposed to be the end of its life, advocates and watchdogs are concerned that the promised state money for the 2015-2019 plan will never actually be delivered.

Maria Doulis of the Citizens Budget Commission explained that the agency could continue with business as usual, dragging out this plan for years. Another scenario is that in Governor Cuomo’s many desired reforms for the agency, the current capital plan could be capped at the projects being worked on at the moment and then rejiggered for the 2020-2024 plan “that will incorporate some of the projects that were previously there, or maybe drop some of them out,” Doulis said. “And in that scenario, the state’s $8 billion doesn't get used, and then the state can sort of rededicate it if it would like, to the new capital plan.”

A rollover like this is also a concern for Fauss. “The real question is going to be what happens to those individual projects, what's going to roll over, and our fear is that that commitment is just going to get shoved over to the next plan. Because they're not fully funded for the 2020-2024 plan,” she told Gotham Gazette.

An analysis from Citizens Budget Commission showed that thanks to recently enacted legislation around congestion pricing, an internet sales tax, and a real estate transfer tax on expensive properties, there will be $25 billion for the MTA to put in a capital plan lockbox.

“But that does not equal the forty to fifty to sixty billion [dollars], depending on who you talk to, that they need. So, if that money rolls over, or if those projects roll over they basically weren't completed in time and we're still going to be behind on them,” said Fauss of Reinvent Albany.

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by Dave Colon, Gotham Gazette
     

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There's Plenty of Money in the MTA Capital Plan, It's Just Not Being Spent Tue, 07 May 2019 04:00:00 +0000