In the end, the zoo animals were spared.
After months of dire predictions, including threats to bears and chimpanzees, Mayor Michael Bloomberg and City Council Speaker Gifford Miller reached an agreement on the city's $43.7 billion budget and closed the largest deficit since the 1970's. The zoos in Queens and Brooklyn that the mayor had threatened to close down were saved; so too were trash pickups, child health clinics, libraries, scholarships to city universities, and weekend meals for elderly. Even recycling is making a comeback - plastic pickups will resume on July 1 and glass collections are scheduled for spring of 2004.
"The people of New York City have stood up and taken care of themselves," said Mayor Bloomberg. Still the budget, which goes into effect on July 1, includes some deep cuts, such as:
And there are the tax increases. In the last eight months, the mayor and the council raised property taxes, sales tax, income taxes on the wealthiest residents, and placed a surcharge on absentee landlords.
Former Mayor Rudolph Giuliani once referred to the city's budget process as a "game" with the mayor calling for cuts and the City Council restoring most of them to the relief of the public.
This year, the usual budget rules changed: the mayor announced $90 million in restorations before the council could take credit for them and the State Legislature overrode Governor George Pataki's veto in order to help the city.
But it remained a game - one that many New Yorkers believe they could have done a better job of playing.
"I balanced the budget in five minutes, without cutting one fire station," said Joe Nardiello, one of over 5,400 New Yorkers who balanced the city's budget on their own by playing an interactive budget game on GothamGazette.com.
Most who played Gotham Gazette's budget game chose the commuter tax as their primary way of balancing the budget. Raising property taxes, sales tax, and income taxes were among the least desirable options. (See sidebar for game results.)
Mayor Bloomberg, who has the lowest approval ratings of any mayor in the last 25 years, hopes the worst is over.
"I think certainly barring some totally unforeseen thing, that tax increases are clearly behind us," the mayor said.
THE BUDGET TRAIL
In April, Mayor Michael Bloomberg presented his plan to close a $3.8 billion budget deficit and called for $600 million in cuts to services.
If the state legislature did not provide $2 billion in aid and pass a commuter tax, the mayor said he would have to resort to a second scenario - a so called "doomsday budget" - and lay off 10,000 additional city workers.
Many in the city immediately dismissed the commuter tax as a fantasy. Even proponents questioned the mayor's tactics since his commuter tax was three times larger than the one the city had had for 30 years. Bloomberg also said he would use part of the revenue to give city residents a tax break.
Gazette's Budget Game In the last month, 5,412 people played the interactive budget game. Some game players saw the game as a serious exercise, reflecting their own experiences in the city. "Working for the Department of Education and seeing the entire clerical staff laid off last week gave me a better sense of our crisis," said Pedro Cubero, one game player. "It's not easy to balance the budget, but everyone knows Bloomberg will be a one term mayor because of [it]." Some offered suggestions that the mayor and the game did not consider. "With a full restoration of the stock transfer tax, we could wipe out the deficit in the City's budget and begin to address the state's budgetary problems as well," said Timothy Logan, another player. Still others took a more whimsical approach to the city's fiscal crisis. "I played the game and ended up with a $ 58 billion surplus," said Jeremy. "Sure, I boosted all the taxes and reduced all expenditures to zero, but come on, â€ca-ching!' I'd be rich." The overall results from the game seemed to reflect New Yorker's concerns and some of the most common stories in the news. Players refused to cut spending to the fire department and transportation and increased funding most often for trash collection and housing. New Yorkers also raised taxes as well. The two most popular choices were the cigarette tax (which the mayor did raise) and the commuter tax (which he failed to get from Albany). Cuts New Yorkers cut spending most often in (in descending order) social services, government administration, debt service, education, courts and corrections. The fire department and transportation were the least cut categories in the game. Spending New Yorkers increased city spending most often for fire department, sanitation, environment, housing, parks, children and transportation. Taxes The most popular revenue generating measures were selling taxi medallions, making a deal with the port authority for airports, increasing cigarette taxes, and instituting a commuter tax. The least popular revenue options were raising property taxes, instituting tolls on the East River Bridges, and raising sales taxes. |
But throughout the budget process, Mayor Bloomberg remained optimistic that lawmakers in Albany would come to the city's rescue.
"My prayers, my hopes and my expectations are that Governor Pataki, Majority Leader Bruno and Assembly Speaker Silver will come together and help this city when it needs it," the mayor said in April.
However, Governor George Pataki rejected nearly every budget request from Mayor Bloomberg. Pataki said "no" to the commuter tax, produced a plan to restructure the state's Medicaid funding formula so that the city would have to pay more and even tried to grab a larger share of the city's homeland security funding from the federal government.
So Mayor Bloomberg took his case to the State Assembly and Senate, which few considered a hopeful prospect since the legislature had not passed a budget against the governor's wishes in more than two decades.
Faced with complaints from constituents about cuts to education and health care programs, Democratic Assembly Speaker Silver and Republican State Senate Leader Bruno joined forces.
The legislature restored much of the governor's cuts to school aid, Medicaid and public health and gave the city permission to raise three taxes. The state also assumed about $500 million in city debt.
Governor Pataki called the plan a "multimillion-dollar tax grab" and complained that his grandchildren would still be paying off the city's 1970's debt in the year 2034. The governor vetoed the budget, but the State Assembly and Senate overrode his veto the next day.
At the end of the budget process, Albany did come through for New York City, but not in the way the mayor predicted.
The city will actually receive more than the $2.7 billion from the State Legislature than it was seeking. This additional revenue, Mayor Bloomberg said, allowed the city to avoid $215 million in service cuts.
NEW TAXES
The budget plan negotiated by Mayor Bloomberg and the State Assembly and Senate does not include a commuter tax and instead raises revenues from three smaller taxes. While they will provide much-needed revenue for the city, each also creates its own pain for residents.
Sales Tax
This summer, everything in the city costs more.
The city increased its sales tax by .125 percent. Combined with a state increase of .25 percent, New Yorkers will now pay a total 8.625 percent sales tax. The increase is expected to generate $115 million for the city and is scheduled to be phased out in two years. The state also reinstated taxes on clothing and shoes that cost less than $110; those items have been tax-free.
Both Republican and Democratic City Council members were angered by the sales tax, arguing that it would encourage people to shop outside of the city and hurt low-income residents the most. "This is Mike's tax, not ours," said Brooklyn Councilmember Charles Barron when the council passed the sales tax increase.
The sales tax was supposed to begin June 1, but the mayor and the City Council made a costly oversight that delayed it for a few days. The council passed the bill on May 28, but city law requires a bill to "age" for five days before it can be signed by the mayor. The mistake cost the city more than $1 million in lost revenue and angered merchants who had to reset their cash registers twice - once for the state sales tax increase and once for the city increase.
Income Tax
While the sales tax affects all New Yorkers, the city also singles out wealthy residents to help balance the budget.
The city raised the personal income tax increase for individuals earning more than $100,000 a year and couples making more than $150,000 a year. This tax hike will produce an additional $600 million for the city and is scheduled to be phased out in three years.
While many Democrats were pleased with the increase in the personal income tax on the wealthy, calling it the most "progressive tax in recent history," business leaders and some budget watchdogs warned that the higher tax makes the city less competitive.
Landlord Tax
Landlords who own one-, two- or three-family houses and use them for income will see a steep increase in their property tax. This year, owners will pay a 25 percent surcharge on the assessed value of their house. In subsequent years, the surcharge will rise to 50 percent of the assessed value.
Some have argued that the tax on such properties has been too low for too long and an increase was overdue. Lawmakers even tried to make the property tax surcharge seem more acceptable by dubbing it an "absentee landlord tax," playing on New Yorkers' general distrust of property owners.
But others say that landlords will likely pass the increase on to their tenants by imposing higher rents.
CITY COUNCIL EFFORTS
Without the power to raise most taxes by itself, the New York City Council has been relegated to the role of protestor, fighting to keep budget cuts to a minimum.
Brooklyn Councilmember Bill DeBlasio was arrested at a protest to stop the closure of fire company 204. Astoria Councilmember Peter Vallone, Jr. held a hearing on making New York City the 51st state. And Washington Heights Councilmember Robert Jackson walked 150 miles from New York City to Albany to protest education funding.
In the end, the council got most of what it was asking for with two notable exceptions: 3,500 education workers were laid off and six firehouses remained closed.
"Can we honestly say that the restoration package…reflects the priorities of the citizens of this city?" asked Brooklyn Councilmember Yvette Clarke in the council chambers the day after the handshake agreement. "No. It doesn't."
Still Clarke and the other member of the City Council voted to approve the budget. Only the three Republican members - James Oddo, Andrew Lanza, and Dennis Gallagher - voted against the tax increases.
As part of their agreement with the mayor, the council also passed a law to limit the city's liability in slip and fall accidents, shifting the responsibility to property owners.
Council members vowed to keep fighting for teachers' aides, firehouses, and said they want to amend the tort reform bill, worrying that it places too much of the burden on New Yorkers.
"Not every step taken in this process was a victory," said Councilmember David Weprin, the chair of the finance committee. "There still remain issues that we will visit again in the future."
LOOKING AHEAD
While the mayor and the City Council emphasized what they had put back into the budget, lobbyists pored over the details.
"There is over $400 million in cuts in this budget that no one is talking about," said Bonnie Brower of the watchdog group City Project.
Education advocates lamented that the mayor was spending more to renovate one courthouse than on all school construction in next year. The amount of money to build new housing continues to shrink. And services like mental health care, foster care, and youth programs still face cuts.
And for all of the politics and the pain of this year's budget, passed just in time for its commencement on July 1st, lawmakers have more challenges ahead.
Two of the largest parts of the city budget - debt service and Medicaid payments - will continue to increase. There are no wage increases for city workers in this year's budget. And some city watchdogs also predict that New York City's economy will not recover as quickly as some hope.
Next year, the mayor and the City Council face another budget deficit of $2 billion.
The school year ended on a high note for the city's 1.1 million public school students. On June 26, in a decision that could have far-reaching effects for the city's schools, the New York Court of Appeals ruled in Campaign for Fiscal Equity, Inc. (CFE) v. the State of New York that every New York public school student is entitled to the opportunity for a meaningful high school education. In the final word in a lawsuit that began in 1993, the state's highest court ordered the state to implement major school funding and accountability reforms to allow students in New York City schools to meet this constitutional standard.
The court's 4-1 decision overturns a lower appellate court's 2002 ruling that the state is obligated only to ensure that students receive an 8th-grade level of education, a ruling that outraged New York City families and educators last summer and became a central issue in the gubernatorial election. The current decision reinstates State Supreme Court Justice Leland DeGrasse's 2001 trial court ruling that all children -- whatever their "socioeconomic deficits" -- are constitutionally entitled to the opportunity for a "sound basic education" that prepares them for competitive employment and for their roles as citizens, and that the state's current funding system fails to meet these requirements.
The Court of Appeals agreed with the trial court that money matters to children's schooling and that additional resources can provide a better educational opportunity for New York City students. It held that city schools must receive sufficient funding to ensure quality teachers, reasonable class sizes, and adequate school facilities and classrooms, including up-to-date libraries and computers.
The nearly 100-page opinion (in pdf format), authored by Chief Judge Judith Kaye, flatly rejected the state's position that poor student performance is caused by socioeconomic conditions rather than the quality of the schools. Justice Kaye writes, "we cannot accept the premise that children come to the New York City school uneducable, unfit to learn."
To remedy the unconstitutional school-funding system, the court gave the governor and the legislature until July 30, 2004, to do the following:
• They must undertake a study to "ascertain the actual cost of providing a sound basic education in New York City."
• The must reform the state's funding formula to ensure necessary resources.
• They must implement a fair accountability system to ensure that students actually receive that opportunity.
The court defined a "sound basic education" as one that includes a meaningful high school education with the skills and knowledge to "function productively as civic participants" in 21st-century society, including being capable and knowledgeable voters and jurors able to sustain employment.
Michael A. Rebell, the executive director and lead attorney of CFE, the coalition of parent organizations, education advocacy groups, and community school boards that brought the lawsuit over ten years ago (where we work, too), called the decision a resounding victory for New York's school children, “a ringing triumph for every child in New York City, New York State, and throughout the nation," Rebell said. "The Court has made clear in no uncertain terms that New York's children are more important than backroom politics. The Court joins the people of New York in agreeing that all children should have a true educational opportunity to succeed in the workplace and in life."
City Council Member Robert Jackson, a co-founder of CFE and the lawsuit's lead plaintiff, said that the decision is a victory for all New Yorkers. It means, he said, that "no one -- not the governor, the legislature, the mayor, or the city council -- can shortchange the children of New York City any longer. It is now mandated that we fund the public education system so that every child can receive an adequate education."
Judges George Bundy Smith, Carmen B. Ciparick, and Albert M. Rosenblatt joined Chief Judge Judith S. Kaye in the majority on the decision. Judge Susan P. Read, a recent appointee of Governor Pataki, was the lone dissenter on the court.
Jessica Wolff, a public school parent, is director of policy development for the Campaign for Fiscal Equity, where Joseph Wardenski also works as senior research analyst.
A conceptual view of how the MTA is planning for the new Fulton Street Transit Center at the corner of Broadway to look |
Rush hour in New York, 2015: At the World Trade Center Transportation Hub, a commuter gets off the PATH train from Jersey City and walks two blocks to his office in the 1776-foot-tall tower on Fulton Street. At the nearby Fulton Street Transit Center -- airy, brightly lit, and easy to navigate -- a downtown resident takes the #2 subway train uptown to her job in Times Square. At the same time, a family from Japan gets off their flight at John F. Kennedy Airport and boards a train that goes directly to the 9/11 memorial on the former site of the old World Trade Center. And a Wall Street executive from Greenwich arrives on time to work via the Second Avenue subway, using an easy connection at Grand Central Terminal.
Those who currently live and work in lower Manhattan could easily see this scenario as science fiction.
Today, downtown subway stations are archaic and uninviting. The streets seem to be a perpetual construction zone. Added security and barriers, such as at the New York Stock Exchange on Broad Street, create a war zone atmosphere. West Street remains a barrier to the World Financial Center and Battery Park City. Connections among subway lines are confusing or non-existent.
The tragedy in lower Manhattan highlighted the inherent weaknesses in the transportation system serving it, particularly in contrast to Midtown. With no direct commuter rail access from New Jersey, Long Island or Westchester (Midtown has direct access from all three), lower Manhattan has been at a competitive disadvantage to attract businesses for several decades.
Rebuilding lower Manhattan after September 11 has meant not only restoring the transportation that was damaged during the attacks, but improving many parts of the transportation system downtown.
In October 2002, Governor George Pataki submitted a request for funding for lower Manhattan transportation projects to the Federal Emergency Management Agency and the Federal Transit Administration. Early this year, they agreed to together provide $4.55 billion. The approved projects include a transit hub at the World Trade Center site, with underground connections to a new subway complex called the Fulton Street Transit Center. Pataki’s list also includes the rebuilding of the dysfunctional South Ferry 1/9 subway station and improvements to lower Manhattan streets and public places. In addition, the governor has called for tunneling part of West Street and a further study of how best to connect lower Manhattan to the airports.
World Trade Center Transportation Hub
The World Trade Center Transportation Hub involves the construction of a temporary and then a permanent PATH station, with pedestrian connections to the E train station, the existing N/R station, and entirely reconstructed 1/9 station. An underground walkway under Dey Street will link the hub to the Fulton Transit Center, which will incorporate four subway stations and nine subway lines. It will have another walkway under West Street that connects to Battery Park City. The cost of the project is estimated at between $1.7 and $2 billion, and it will be completed in phases by early 2009.
One controversial element about the hub, which has still not been resolved, is how much retail space will be built underground in the hub’s passageways. While retail developers are anxious to build as many stores underground as possible to attract business from commuters walking through the station each day, building too many stores underground would create a mall that could sap the life from the surrounding streets. To build a vibrant neighborhood in lower Manhattan, as much retail space as possible should be built at street level.
Another issue is the possibility of including a terminal under the World Trade Center site to house tourist buses. The city and local residents say the bus terminal would keep foul-smelling buses from lining up on crowded local streets, but many family members of those lost on 9/11 are offended by the thought of buses stored where their loved ones died. While some bus parking, especially for school buses, may be necessary, it can be kept to a minimum by encouraging tourists who visit the 9/11 memorial to use ferries and subways.
Fulton Street Transit Center
The MTA's design concept for the John Street and Broadway entrance to the Fulton Street Transit Center. |
The Fulton Street Transit Center to the east is being planned by the Metropolitan Transportation Authority. The station complex, which includes four stations and nine subway lines, the 2, 3, 4, 5, A, C, J, M, and Z, is a maze that challenges the savviest New Yorker. The MTA plans to open up the Lexington Avenue station entrance by razing some or possibly all of the properties on the east side of Broadway from Fulton to John Streets. The authority also plans to simplify the pathways and make it easier for people to see where to go when transferring from one line to the other. See the MTA website for more details. Many preservationists are very worried that historic buildings, most notably the Corbin Building on John Street, will be torn down or damaged to make way for the new station. This 1889 building, with its terra cotta façade, is one of the area’s first skyscrapers. The MTA should preserve the façade of the building and incorporate it into the design of the new station. The cost for the transit center is $750 million, and it is scheduled to be completed by 2007.
New South Ferry Subway Station
The new South Ferry subway station will overcome the many deficiencies of the existing station, such as platforms the length of just half a subway train, delays caused by slow trains forced to negotiate an almost impossibly tight curve, and a single overcrowded exit. The station, which serves as a gateway for tourists destined for Liberty and Ellis islands, is an embarrassment as it is now.
The original design for the replacement would have torn up part of Battery Park, cutting down dozens of trees on the east side of the park. After the Battery Conservancy and other groups complained, the MTA decided to rethink the design. A new plan has been devised by the MTA, and it is a big improvement. The station would now be located mostly outside and east of the park. Building it will do little damage to the park, and the new plan brings the station closer to others in lower Manhattan to make transferring easier. It will also be closer to the Staten Island ferry terminal than the first plan. The earlier design was to cost $400 million and be completed by 2007, but costs and timing of the new design are not yet available.
West Street
West Street presents a barrier for pedestrians who want to go to and from the World Financial Center and parts of Battery Park City. Prior to 9/11, two pedestrian overpasses helped walkers cross the 200-foot-plus-wide highway. The more heavily used overpass, which went directly into the Winter Garden, was destroyed and will likely be replaced.
Initially, there was much interest in burying West Street in a tunnel from the World Trade Center site all the way to the Battery, but cost estimates were so high that the New York State Department of Transportation is investigating less ambitious plans – either a short tunnel from Vesey to Liberty Streets, which the governor has recently called for, or a deck over West Street into the World Financial Center across the way. This deck or platform would bridge over the existing highway. Depressing the highway in a tunnel would almost certainly be more expensive, but it would improve access to the World Financial Center and the ferry services beyond on the Hudson River and would better protect the memorial site from the noise of traffic. Some downtown residents have opposed a tunnel, saying it isn’t necessary and will require a disruptive construction zone. The New York State Department of Transportation is currently making presentations about the tunneling and decking options, after which the public will be in a better position to judge which plan will work best. Costs have not been determined for either project.
Airport Connections
In the governor’s letter to the federal government, he indicated that local agencies would be working to provide direct access from lower Manhattan to Newark and Kennedy airports. Much of the PATH line to Newark is already in place, and the project’s viability will depend on its cost and whether it can operate without affecting existing PATH services. The Port Authority is examining this.
For Kennedy airport, the options are more varied. New subway connections with Brooklyn could bring trains into lower Manhattan from Jamaica to serve Long Island commuters and also provide for an easy transfer to the Kennedy Airport Airtrain, to open next year. But many worry that the new trains would interfere with existing subway service and do little to cut the travel time for Long Islanders going directly to lower Manhattan. Mayor Michael Bloomberg has proposed creating a new tunnel under the East River, which would provide a one-seat ride to Kennedy Airport and could also provide a connection to the Long Island Rail Road.
The Regional Plan Association, where I am a senior fellow for transportation, strongly supports a new East River tunnel. However, the association’s plan is for the airport connection to be linked to the planned Second Avenue subway, which is designed to allow an extension into Brooklyn. Governor Pataki has asked the Lower Manhattan Development Corporation, along with the MTA and the Port Authority, to sort through the alternatives and make a recommendation by next spring. Where the funding for any airport project will come from is not yet clear.
Second Avenue Subway
Incredibly, overlooked in all of the discussions about lower Manhattan transportation is the project that the MTA has already committed to, the Second Avenue subway. It would add two new subway services to lower Manhattan and unclog a third, the notorious Lexington Avenue express. The MTA supports placing the new subway line in lower Manhattan underneath Water Street on the east side. If this line is extended, it could connect with Brooklyn and the Long Island Rail Road as described above. (The portion of the line in Manhattan is the subject of MTA hearings scheduled for May 12 and 13.)
Fixing Downtown Streets
Lower Manhattan’s streets are barricaded for security reasons and overcrowded with pedestrians competing for limited space with many types of vehicles, all with a claim to the same space. Security needs to be provided without creating an “armed camp” atmosphere. A solution for overcrowding should allocate space according to the need to move people and goods, and recognize the important role of streets and sidewalks as part of the public realm. This can be done by creating a plan for lower Manhattan’s “public realm,” including closing some streets to traffic, and building park-like boulevards and small parks. The governor’s recent allocation of funds for streets and parks is a step in the right direction.
The transportation system must be made whole again. Otherwise, the willingness of commuters and others traveling to lower Manhattan on business or to shop, will slowly, but assuredly erode. So will the resolve of the area’s residents. People will be unwilling to stand the inconvenience and lost time, when other options, whether in Midtown, the rest of New York City and suburbs or worse, other areas outside the region, are available. To overcome this potentially mortal blow to the financial district, the transportation system must entice back those who have left, overcoming the system’s weaknesses that existed before 9-11.
Jeffrey M. Zupan is senior fellow for transportation at Regional Plan Association, the not-for-profit research, planning and advocacy organization in the tri-state region.