Talks Finances, Taxes, Pensions
An overview of the past, present and future of the city’s economy was the focus of Comptroller John Liu’s State of the City address, held last Thursday, Feb. 16 at the City College of New York in Harlem.
Complete with performances from the ARC Gospel Choir and the Chinese Freemasons Athletic Club, the event focused on Liu, the former City Council member from Queens and rumored mayoral candidate.
After introductions from CCNY President Dr. Lisa Coico and Geronima Miranda of the Wadleigh Sec- ondary school for the Performing & Visual Arts, Liu began by telling the story of his childhood, noting that his family emigrated from Taiwan when he was five, and eventually settled in Bayside. He would eventually attend the Bronx High School of Science.
“Although we faces many challenges, like other immigrant families, my mom and dad embraced the American dream and believed in what New York City was all about,” he said. “So much so that they changed the names of their three sons to John, Robert and Edward in honor of the Kennedy family.”
A look at the economy
“The recession of the last few years has had an enormous impact on the city of New York,” said Liu, “especially on community of color and the young.”
In the fourth quarter of 2011, the unemployment rate for Hispanic and African-American New Yorkers was higher than the overall unemployment rate.
“Every New Yorker should have the chance to succeed, and as we move from recession to recovery, we need to make sure that people don’t get left behind,” said Liu. “The wider proserity is spread, the more sustainable our recovery is.”
He then proceeded to give an overview of the city’s current economic condition, telling the crowd that 12,500 private sector jobs were lost in the second half of last year.
“A sluggish national economy and international instability present perils for our local recovery,” he stated, claiming that “some in Congress refuse to make the tough choices for deficit reduction” and charging that “a few in Congress have shown a disturbing willingness to derail even the simplest measures meant to protect our fragile national economy.”
The international economy, however, poses an even greater challenge, according to the comptroller: “a European debt crisis is the single most significant risk to the New York City economy this year.”
“The reality is Europe’s banks are New York’s banks,” he added, as they have over a trillion dollars of assets in the city, lease over 8.5 million square feet in office space and employ 45,000 New Yorkers.
However, “barring any catastrophes,” Liu’s office projects slow but steady growth in the city economy. He pointed to parts of President Barack Obama’s platform, such as a payroll tax extension, that could inject $2.6 billion into city coffers.
Unemployment
Currently, 350,000 New Yorkers are unemployed, he noted.
“Is it any wonder why people occupy parks clamoring for a better economic plan when they are left jobless year after year?” he asked. “Economic recovery is not our only objective; so is economic equality.”
The economy has also had an adverse effect on city coffers, he added, thanks to the accumulation of budget surpluses.
However, the city still spends more money than it takes in, according to Liu, and the city is projecting budget gaps of $3 billion in Fiscal Year 2014. Liu claimed the gap must be fixed “the old fashioned way”- by cuts.
Later in the speech, he would push for borrowing funds to put local construction workers to work.
“Right now, interest rates are at historical lows, which makes borrowing less expensive,” noted Liu. “Since we’re going to borrow that money over the next few years, why not do some of it sooner?”
He challenged city agencies to find construction projects that could be accelerated and developed over the next two years, and claimed that his office would help find the funds for those projects.
Waste
Liu then lauded his auditing staff for recouping money into the city treasury and curbing wasteful spending. In one case, he noted, an audit found over $100 million in unused funds; in another, changes to a contract resulted in a savings of $200 million.
The biggest catch, he told the crowd, was the CityTime project, which had ballooned from $68 million to over $600 million in costs. Liu told the crowd that his staff had put the project back on track.
To further his campaign to cut waste, he announced the creation of a new hotline-1-212-NOWASTE- so members of the public can report waste, as well as the newest version of his Checkbook website that lets the public view all city budgets and contracts. In addition, he proposed the creation of a “dashboard” that would let city agencies track their information technology costs. Such a system is already active on the federal level.
He also called for a new system, also based on the federal government, to track subcontracting and track spending and payment.
“The pursuit of smarter government also requires us to look closely at how we engage community-based organization that many of the city’s residents rely upon for essential services,” Liu told the crowd, finally calling for a reform of the city’s VENDEX system for nonprofits, as well as an elimination of fees for using the system. “Let’s get it done.”
Pensions
In his meetings over the past several months with community boards, pensions have been one of Liu’s talking points, and he brought them up again last Thursday, calling for “a comprehensive overhaul of asset management.”
He claimed that changes to the way the city runs its pension funds could save taxpayers $30 billion over the next 30 years.
“The discussion of pensions today is alarmingly one-sighted and shortsighted. It’s all about cost with no consideration of need,” he argued. “Worse yet, public scapegoating of public employees seems to be relentless.”
He proposed a fund for private workers-similar to the fund for city employees-that would take money from participating employers and employees and invest them.
He also noted that the pension investment allocation with minorityand women-owned businesses has expanded to $6.5 billion.
Other priorities
Turning to taxes, Liu spoke of various income tax plans proposed by Manhattan Borough President scott Stringer, and added that if the economy improves, he would welcome a cut in the city sales tax, which he called “the most regressive tax we have.”
He also lauded the City Council for looking to raise the minimum wage.
Finally, he called for the city’s telecommunications companies to offer low-income students broadband Internet access, again modeling a soon-to-launch federal program.
“It’s not just about numbers, it’s about people,” he concluded. “It’s not just about costs, it’s about need. It’s not just about recovery, it’s about equity.
