By MIKE MUSURACA
Assistant
Director,
DC 37 Research and Negotiations Department
In the first
months of the Bloomberg era, many political leaders and commentators have broadcast
a troubling message. They echoed Mayor Michael R. Bloomberg, who ruled out tax
increases in his inaugural address and budget proposals and has suggested a reduction
in the city's workforce through attrition, early retirement incentives and severance.
Although he says he hopes to avoid layoffs, there will be pressures on him
to turn to such drastic moves in the new fiscal year beginning July 1. If benefit
cost reductions and federal and state aid do not materialize, the mayor's contingency
plan includes layoffs. That, in short, is the framework the city will use in making
what the mayor calls "tough choices" to balance the budget.
This
thinking is as narrow and as unimaginative as it gets. It also ignores a number
of realities.
For one, the composition of the city's workforce has undergone
a radical transformation since Rudolph W. Giuliani took office in 1994. Teaching
and uniformed personnel now account for a much larger share of the employees than
they did then.
Living on borrowed time
While we applaud the mayor's plan to move ahead with civilianization in the NYPD,
we must warn that workforce cutbacks alone will not generate nearly the levels
of savings the city needs.
Second, we have to recognize that long before
Sept. 11, New York City was living on borrowed time. The tremendous surge in the
stock market from 1995 to 2000 allowed the city to both cut taxes and deliver
services. This was becoming more difficult in the slowing economy before Sept.
11. It is impossible now.
As the city plunges into tighter economic circumstances,
some of the structural problems that led to the 1975 fiscal crisis still exist,
notably the city's relationship with the state. Albany shortchanges the city by
billions of dollars on education and Medicaid.
New York is one of the
few states that require cities to pay any share of Medicaid costs. Take the local
share of Medicaid - over $3 billion a year - off the city's books, and the fiscal
problem is more manageable.
"The great
unspoken"
In the last few years, Albany has gone further than
previously in putting the screws to the city, eliminating both the Commuter Tax
and the Stock Transfer Tax Incentive Payment. That is more than $600 million in
revenues on an annual basis, or the equivalent of roughly 15,000 jobs at $40,000
per position.
Of course, the city has not helped its case, because it
too has reduced taxes, apparently believing that the run-up in the stock market
would last forever.
The economic slowdown reinforces the urgency of the
city's need to reevaluate some of the $3 billion in tax cuts that have been enacted
since 1995.
Behind this discussion of tough choices and revenue increases
versus spending cuts is a great unspoken: the services that are on the chopping
block.
In 1975, the City University of New York, public hospitals, the
subway fare and affordable housing programs were sacrificed to the gods of the
bond market. As the mayor reminds us in this year's budget, more than 60,000 full-time
employees were eliminated.
What will we give up now? Or will we make
the really tough choices to fund the services we need to sustain a vibrant local
economy and keep this a city that folks want to live in?
The city clearly
faces a revenue problem. Can it be solved by simply relying on the private sector
to quickly resurrect the city's economy and its tax base? Or do the services that
city employees provide play a central role in creating the conditions that allow
the private sector to flourish?
If you believe that the role of government
is vital, then raising revenues has to be an important part of the solution to
balancing the budget.