|
-Comptroller proposes using City’s Pension Funds to invest in infrastructure-
 |
New York City Comptroller William C. Thompson, Jr. addresses more than 300 attendees at a Crain's Business Breakfast Forum on Tuesday, October 21, 2008. Thompson talks about the current economic crisis confronting New York City and the nation.
View slideshow |
| Read Crain's speech (pdf) |
|
Amid the economic turmoil that has embroiled the nation, New York City Comptroller William C. Thompson, Jr. today called on the Mayor to immediately launch comprehensive agency audits to identify wasteful spending in City government.
Thompson’s proposal, made during a speech at a Crain’s Breakfast Forum, was key among three priorities essential to overcoming a “crisis of confidence” in New York City’s economic stability: fiscal discipline, including opportunities for belt-tightening and greater efficiency; a commitment to economic development to prime the local economy; and, diversification of the economy and improving the climate for small businesses and entrepreneurship.
“We must continually seek out ways to make our precious tax dollars go farther and do more for average New Yorkers,” Thompson said. “When we talk about looking for efficiencies, on a basic level we are talking about doing things better and, where possible, doing them better for less.”
You can view the remarks at www.comptroller.nyc.gov.
In September, the Mayor announced spending reductions of $500 million for Fiscal Year 2009 from the $59 billion budget, and $1 billion for Fiscal Year 2010. Thompson called the cuts warranted but the City can and should consider other steps to exact savings.
Addressing fiscal discipline, Thompson – whose office has conducted nearly 650 audits identifying around $258 million in savings and exposed instances of wasteful spending – said that every City agency commissioner be required to produce an annual efficiency report.
“My office doesn’t have the resources or the personnel to comb through every line of spending at every agency,” he said, continuing to highlight the exacerbating lack of transparency in the current crop agency reports. “Unlike the Mayor’s Management Report, these reports would examine agency budgets and programs from top to bottom, identifying savings and enabling us to hold commissioners accountable.”
“It is notable that, beginning last year, the Mayor removed detailed agency statistics from the City’s web site. Among other things, this prevents independent analysts from evaluating performance, and limits the ability of the public to assess the impact of budget cuts on City services.”
The Comptroller, noting that budget growth has been out of balance with the growth of the local economy, also proposed that the City carefully examine using the gross city product, or GCP, as a guide to cut costs.
“Had we started to tie city spending to GCP growth ten years ago, my office estimates that the City would have spent roughly 8.5 billion dollars less last year,” Thompson said.
Further, he added, the City should take a hard look at excess spending. For Fiscal Year 2008 alone, his office noted expenditures of $31 million on IT consultants, $1 billion for hourly workers, $1 billion for overtime, and more than $26 million for non-overnight travel expenses.
“The savings we can realize by cutting back on outside contracting and other excess spending could be dedicated in part to providing additional training for existing city workers – helping us advance our workforce development goals while reaping millions of dollars in savings for New York,” the Comptroller said.
The Comptroller noted, however, that the current term limits debate is unfortunately distracting New Yorkers from debating the real issue: a “crisis of confidence” and the City’s welfare “as we are coping with a downturn in our local and national economy that some say will rival the Great Depression.”
Last week, Thompson forecast that as many as 165,000 total private-sector jobs will be lost throughout the city’s economy over the next two years, almost doubling his July forecast of 85,000. Some 35,000 of those jobs will come from the city’s securities sector.
“Thousands of average New Yorkers are suffering,” he said. “With all this talk about numbers, let us never forget the human toll that this incredible collapse has caused. And as we look soberly at the new downturn, we must avoid the temptation to look for the mirage of a new bubble that will somehow save us.”
Addressing concerns about economic development projects derailed by a weakening economy, Thompson stressed that “we cannot take an approach that embraces, then shies away from, important investments in our city’s future.”
He called on the City not to abandon projects such as Moynihan Station, downtown Brooklyn, and Willets Point in Queens, calling them “bold plans that will generate future growth in our business sector, re-imagine our skyline, and fundamentally shape the perception of New York for generations to come.”
Accordingly, Thompson revealed that his office is exploring the use of New York City Pension Funds to invest in infrastructure, investments that could address the urgent need to repair and expand roads, bridges, power plants, and schools to meet population growth amid budgetary prudence.
Additionally, Thompson proposed potentially consolidating the large number of economic development agencies that impact New York City, including the New York City Industrial Development Agency, Economic Development Corporation and Department of Small Business Services.
“We must begin a thorough examination of the effectiveness of these entities, looking for opportunities for efficiencies and consolidation,” he said. “Such scrutiny would suggest ways in which these entities can streamline their operations, create consolidations, and move projects more swiftly through the pipeline.”
The City also needs to do more to establish a better climate for small businesses. More than 98 percent of New York City firms have fewer than 100 employees, and employ almost half (48.5 percent) of all New York City private sector employees.
Thompson said one way to help small businesses and entrepreneurs is to remove the burden of taxes that hamper the growth of their companies, such as the unincorporated business tax, or UBT, and the double taxation on sub-chapter S corporations.
“The UBT is a tax that has created unnecessary hardship among small firms in the city by siphoning off investment capital at a critical stage of their incubation,” said Thompson, who supported the Mayor’s decision to expand the credit against personal income tax for City residents with UBT liability. But, he said, “That change did not go far enough….The income level at which the UBT kicks in is still too lowand the range over which the UBT tax credit declines isn’t indexed for inflation.”
Thompson closed by stressing that New York and New Yorkers have time and again proven their resiliency amid the most trying of times.
“New York and New Yorkers have shown themselves capable of adapting, of re-imagining themselves and their city, and emerging stronger and more brilliant than ever before,” he said. “With careful nurturing and attention to the fundamentals of our economy, New York will continue to represent to new generations that place where dreams are forged and government faces down its challenges with a commitment to innovation, diversity, and progress.”
###
|
