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Welfare Reform's Aftermath


In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) was reluctantly signed into law by President Clinton. PRWORA, welfare reformÕs rightful name, was overwhelmingly endorsed by a conservative Republican congressional majority. These would-be reformers legislated the demise of the federally-financed entitlement program Aid to Families with Dependent Children (AFDC), enacted in the Great Depression. Given that era's social mores, its original target group, women with children and without husbands, was viewed as being modest in scale.

However by the 1960s this was no longer the case, and the program's numbers began to mount. To further complicate matters, AFDC was fast becoming identified as a minority program that promoted family dissolution. While pundits speculated endlessly about "root " causes of poverty, taxpayers had long concluded that little good would come of AFDC, save for the much-derided culture of dependency. (Also in welfare reformers sights was the much smaller General Assistance program, received largely by single adults, down on their luck. But as a state-financed effort, GA was not within TANFÕs reach.)

With PROWRA's passage, AFDC was out, and Temporary Assistance to Needy Families (TANF) was in. To ease the transition, the feds, through TANF, provided the states with a sum of discretionary money to be used on behalf of their welfare populations over a five year period. Few parts of the country had bleaker predictions about the success of TANF than New York. Democratic pols, left-liberal academics and think tankers amply represented locally saw it as a racist-inspired Great Betrayal.

Tales From the City

Between 1996 and 1999, the number of New Yorkers who received TANF and General Assistance declined by 35%, from 1.1 million to 656,000. As a share of the City's population, they fell from 15% to 9% of the total. This declining trend also occurred in each of the boroughs and, more remarkably, in each of the City's 59 community districts. Within the overall public assistance population, the ranks of General Assistance recipients fell at a much faster rate 54% than did those TANF, down 29%.

But the decline of the late nineties was not the case throughout the decade; the 1990s saw the City's welfare population literally go up the mountain and then down again. Between 1990 and 1994, public assistance recipients increased by 34% and by the end of that period accounted for one out of six of all New Yorkers. Though this occurred during the Dinkins mayoralty it was hardly due to a policy of padding the welfare rolls. Rather it reflected the local economy's dire straits. A comparable upsurge in welfare took place nationally in the early 1990's, reflecting the halting recovery from the 1990-91 recession. The first two pre-Welfare Reform years of the Giuliani mayoralty coincided with a modest revival in the City's economy and the beginnings of a welfare population rollback. As the local economy picked up speed over the next (post-Welfare Reform) three years, the drop in the rolls intensified.

Taking Stock

What has happened to those who have dropped from the welfare rolls? No one really knows for sure. A considerable number have been picked up by SSI, a federally financed entitlement program which has a growing contingent of non-elderly disabled children and adults. But the safe bet is that most are in paid employment. Are they better off than before? This question is still unanswerable, though there seems to be little evidence of dramatic deterioration. One telltale indicator supporting this position is the post-1996 trend in food stamp usage. Still a federally funded entitlement program, food stamp recipients fell by 28% between 1996 and 1999. Hard times for former welfare recipients would be mean more, not fewer, recipients.

The Mayor and Governor Pataki were supporters of "ending welfare as we know it" from the get-go. But it is impossible to say how much of the ensuing reduction in the public assistance population on their watch is due to their tough-love positions, and how much is simply the result of the strong economy for which they bear little responsibility. And while great progress may have been made in changing the culture of dependency, it is nevertheless all too true that a considerable number of the poor are still with us. As 2000 began, over a million New Yorkers were on some form of public assistance (including SSI recipients), and more than a half a million of the working poor are dependent on Medicaid for health care.

 

 

In The News: Looking Ahead


It will soon be that time of the decade again. In Spring 2000, the census enumerators will be making their appointed rounds gathering information needed to gauge the changes in the way we live and work that have taken place in the last ten years. But their findings, scheduled to be released in early 2001 shouldn't come as a complete surprise to New Yorkers or to others. So here's a preview...

New Wine and Old Bottles

The 2000 Census will show that the City's Y2K population will be just under 7.5 million, one to two percent greater than it was in 1990. In other words, another 100,000 to 200,000 residents will have been added to New York's already crowded streets, packed subways and hard-to-grow housing stock.

Rapid racial and ethnic changes and their consequences have been a constant theme over the past half century in New York, and in all of America's larger, older cities. In the past, racial and ethnic differences were primarily a white and black affair. But while blacks and whites shared a common national birthplace, they possessed radically different perspectives on what their respective rights and entitlements were and what role government might play in securing them. Conflicts over these matters reached a boiling point in the 1960s and 1970s. Though there is continued tension, more recently, new groups have inserted themselves into the City's political order and socio-economic structure. They have created a new demographic reality. Continuing attempts to impose the institutions and approaches developed around the classic black versus white struggles of the Civil Rights era as a framework for dealing with the needs and problems of the newcomers seems less than adequate. New situations require new thinking.

The Way We Look Now By 2000, over 40 percent of the City's population will be either Latino (30%+) or Asian (10%+). Latinos will have surpassed the number and share of (non-Latino) blacks. Though whites still represent the largest of the City's major racial /ethnic groupings, their share is likely to be down to 37% by 2000 (and falling). Demographers note: Latinos are not a racial group, but are defined as having immigrated from a Spanish-speaking country or having a parent or grandparent who at one time did the same.

The emergence of this new demographic reality in New York and in a handful of what are now being called Gateway metros (Chicago, Miami, Washington D.C., Los Angeles, San Francisco) is the result of the increasing scale and diversity of immigration into the US during the last thirty years. This process was initiated in the mid-1960s as the somewhat unintended result of a major liberalization of the laws governing immigration into the US. There is no gainsaying the role that immigration has come to play in population growth. In the 1950s, immigration accounted for well under 10% of the country's net population growth. Between 1990 and 1998, the comparable figure was just over 30%. And this only measures immigration's direct impact on population growth, without taking into account the disproportionately large contribution of immigrant families to the nation's birth rate. It is also worth noting that once within the US, immigrants still concentrate in only a handful of places, mostly in Gateway metro areas like New York. The tristate New York Metro area represents about 7-8% of the US population, and has attracted 20% of the immigrants entering the country between 1992 and 1997.

The 2000 Census is likely to show that 40% of the City's population is foreign born, up sharply from its 1990 level of just under 30%. In New York's case, the shift from a native born to an increasingly foreign born population is a pervasive one, affecting all the City's major groups. For example, around 30% of the City's whites and blacks are foreign born. The comparable figures at the national level are in the neighborhood of five percent. New York's still substantial foreign born white population consists of two distinctive elements. One of them is an aging, waning cohort of people who arrived as young adults or as children between the 1920s and the 1950s. Another one consists of a growing number of recently arrived Jews from Russia and the newly-independent states of Soviet Union. New York's distinctive and once again fast-growing foreign born black population is drawn from the countries of the Caribbean and includes Haitians and English-speaking Jamaicans, Trinidadians and Guyanese. Over 40 % of the City's Latino community is foreign born. The Latino native born population is still overwhelmingly dominated by persons who were either born in Puerto Rico, and hence automatically became US citizens, or whose parents or grandparents were. But like native born blacks and whites, the ranks of the City's Puerto Rican are being thinned. Last but not least, four-fifths of the City's fast expanding Asian population is foreign born.

However, just looking at the proportion of the population that is foreign born dramatically understates the extent to which immigration in the current period has and is transforming the life and look of the city. If one counts as foreign the children born in the US to a foreign mother or father the so-called second generation then the proportion of the City's population that is of foreign stock by 2000 will probably be close to two-thirds of the total. How different is NYC in this respect? Quite a bit. The comparable national figure will be around 20 percent. Indeed, the likely outcome of the 2000 Census will highlight how demographically unique New York really is.

Emanuel Sounds Off:

The clock is ticking on the real life drama set in motion by the Welfare Reform Act of 1996. By 2001, strict term limits are to be imposed on the remaining recipients of public assistance. While the City's welfare rolls have indeed plummeted -- a joint function of policy and a very strong local economy -- the specter of what might well be a substantial core of adults, many with children, who are simply unemployable is impossible to wish away. In any case, data indicating what progress is being made in moving this ill-favored group to the ranks of the employed is needed. This is, of course, no easy matter. But from an informational standpoint, it is difficult at this time to tease out the barest facts of what is going on in the controversial world of welfare reform. Evaluations, as they are somewhat generously called, are thick on the ground. For the most part they are carried out by groups heavily invested in opposing or espousing welfare reform's timetable and assumptions. But they add more heat than light to clarifying the issue of exactly has happened. Some plain English narrative would do a world of good at this point. The United Way of New York City used to provide such a narrative. Until 1997, it had been preparing for the City's Human Resources Administration a straight arrow, nonpolitical statistical compendium describing the historical trends in the City's low income population and in their utilization of social services. This effort has been discontinued for reasons which are not altogether clear, but is probably related to the Giuliani administration's penchant for limiting access to information which it believes could be used against it by its critics. That's not only a pity, but short sighted: This data base could provide a useful context against which to judge the consequences of welfare reform. It should be reinstated posthaste.

Andrew A. Beveridge has taught sociology at Queens College since 1981, done demographic analyses for the New York Times since 1993, and provides expert testimony on a range of cases, including housing discrimination. The opinions expressed are his alone.

NYC's Latest Figures


The Topic: Demography is "the study of statistics of births, deaths, disease, etc., as illustrating conditions of life in communities." Its subject matter is how and why the populations of particular places change over time, at least insofar as those changes can be quantified with some reasonable degree of precision. Near-synonyms: Population; Immigration; Socio-Economic Data.

The Context: New York City's population has remained largely unchanged over the past half century while the US population has doubled. Since 1970, New York City's American-born adult population has declined sharply, and is being replaced on a virtually one-for-one basis by immigrants and their children. In 1990, 28% of the city's population was foreign born. By the year 2000, the comparable figure will likely be closer to 45%.

Albanian Immigrants


The Topic: Demography is "the study of statistics of births, deaths, disease, etc., as illustrating conditions of life in communities." Its subject matter is how and why the populations of particular places change over time, at least insofar as those changes can be quantified with some reasonable degree of precision. Near-synonyms: Population; Immigration; Socio-Economic Data.

The Context: New York City's population has remained largely unchanged over the past half century while the US population has doubled. Since 1970, New York City's American-born adult population has declined sharply, and is being replaced on a virtually one-for-one basis by immigrants and their children. In 1990, 28% of the city's population was foreign born. By the year 2000, the comparable figure will likely be closer to 45%.

The Reporter: Emanuel Tobier is a Senior Researcher at the Taub Center for Urban Research, and a Professor of Economics and Planning at New York University's Robert Wagner Graduate School of Public Service. A native of the Bronx, he is a long-time student of and frequent commentator on the New York scene. His essay, "The Bronx in the Twentieth Century: Dynamics of Population and Economic Change," appeared in the Fall 1998 Centennial issue of the Bronx County Historical Society Journal.

The Archives: See past monthly updates for Demographics.

Andrew A. Beveridge has taught sociology at Queens College since 1981, done demographic analyses for the New York Times since 1993, and provides expert testimony on a range of cases, including housing discrimination. The opinions expressed are his alone.

Mayor Offers Balanced Budget — But At What Cost?


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NEW YORK — Mayor Michael Bloomberg has proposed a $70.1 billion budget, the last of his administration, with no new taxes or layoffs and the costs of the recovery from Hurricane Sandy expected to be repaid by the federal government.

But some experts warned that the preliminary budget announced on Tuesday fails to set aside a sufficient reserve to settle expired labor contracts, which could lead the next mayor to make tough decisions about service cuts and tax increases. They say the budget also makes risky bets on one-shot sources of funding.

The nonprofit Citizens Budget Commission has called the unsettled labor contracts the biggest risk to the budget. "What you are looking at is a potential very, very big hit to the budget," said Maria Doulis, an analyst with the organization.

The Independent Budget Office has said settling the contracts could cost the city billions of dollars.

Overall, the mayor struck a note of growing optimism about the city's financial future, with revenues expected to increase modestly, with Wall Street rebounding and the local economy diversifying.

"We've done a lot," the mayor said. "We've gone through Sandy, we've gone through Irene, we've gone through a mortgage crisis, and yet with all of those things, the city's budget is still in balance."

But fiscal policy experts warned the budget takes risks by relying on the sale of a new class of taxi medallions for additional revenue and a $1 billion drawdown from a health insurance trust fund, which would deplete it. Bloomberg's budget forecasts $600 million in revenue from the medallion sale, which has been frozen after current cab owners sued to stop it.

Observers have long warned that patching up the budget using a one-shot revenue source like the sale of taxi medallions was troublesome.

The IBO also warned in December after the mayor first announced that the city would not be burdened by the cost of Sandy aid "may prove to be a risky assumption."

"The possibility that the city will indeed have to shoulder some of the cleanup and recovery costs — as well as expenditures to mitigate devastation from future storms — remains very real," the IBO said.

The budget estimates $4.5 billion in Sandy-related costs.

In his announcement Tuesday, Bloomberg also said the city stands to lose out on hundreds of millions in state education aid because of the failure to reach an agreement over teacher evaluations with the United Federation of Teachers. The city is already expected to lose $250 million in such aid, which will lead to the loss of 700 teacher positions this year.

He went to Albany on Monday to call on state lawmakers to stave off the loss of state education aid, saying the UFT's demands were untenable and would be "a fraud on the public."

“My message today is simple: Do not punish our schoolchildren for the obstructionism of the UFT. Our children don’t deserve it. They have done nothing wrong," his testimony read. "They just need a quality education to survive in an ever more global and competitive world, and they can only get that with qualified teachers at the front of the room."

The UFT has blamed the mayor for the breakdown in negotiations. "Just as we reached a tentative agreement with the DOE, Mayor Bloomberg scuttled it and once again turned his back on our schools," said UFT President Michael Mulgrew in testimony.

The loss of teacher positions and other proposed cuts to services are expected to be at the center of budget negotiations involving the Bloomberg administration, the City Council, policymakers and advocates.

“This Council is committed to reaching a responsible, balanced budget that protects the vital services New Yorkers depend on," Council Speaker Christine Quinn said in a statement after the mayor's announcement. "We look forward to working with Mayor Bloomberg to ensure that a fair and balanced budget is reached on time and truly meets New Yorkers’ needs."

As expected, soon after the budget was announced, advocates, mayoral candidates and other elected officials began weighing in on the mayor's proposal.

City Comptroller John Liu, who is expected to run for mayor, faulted the Bloomberg administration's "negotiating strategy" on teacher evaluations for losing the badly needed state education funds.

The Campaign For Children, an advocacy organization, said Bloomberg was proposing to roll back the same cuts to after school and other programs that were restored in last year's budget.

Public Advocate Bill de Blasio, who announced Sunday he was running for mayor, tweeted: "Yet again, early ed & after-school programs are on chopping block, upending lives & leaving NYers scrambling. It's no legacy to be proud of."

Another mayor hopeful, Bill Thompson, said the Bloomberg administration had pursued the "wrong fiscal policies."

"Mayor Bloomberg’s failure to work with labor unions and drop cooperation in favor of name-calling and vitriol has been harmful to our city; one need look no further than these budget problems," he wrote in a statement.

The preliminary budget will be followed by an executive budget, a budget negotiation in June, and then an update in the fall.

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Image by Edward Reed, courtesy of the mayor's office.

 

Council Passes Bill To Increase City Contracts For Minority Businesses


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NEW YORK — Londel Davis' Harlem-based company has contracts to service fire extinguishers with some of the city's largest agencies, including the Department of Education.

But in spite of his success, Davis, who is black, says it's far more common for him and other minority business owners to get rejected when they bid for city contracts. And he says he doesn't really know why that is.

"It might have been our bid was too low," he said. "We might not have had a piece of a document."

The City Council approved a bill yesterday that would revise Local Law 129, passed in 2005, which was supposed to increase opportunities for minority and women-owned businesses to get contracts from the city. Among other enhancements, the new bill would add a greater level of accountability and eliminate a $1 million contract cap.

Local Law 129 had set targets for city agencies to contract minority and women-owned businesses for certain sectors, including construction, architectural and engineering, as well as services and goods.

But the law had been criticized for failing to do its job because of its lack of enforcement and effectiveness. There were also complaints that, because of the $1 million cap, only 15 percent of the billions of dollars worth of city contracts had been subject to the law.

An analysis of the program under Local Law 129 by the mayor's Office of Contract Services this year found that "disparities still exist" between the number of minority and women-owned business enterprises and "the extent to which they are performing city contracting work."

Minority and women-owned business enterprises had about 3.1 percent of the share of eligible city contracts for most of 2012, according to data on the city Comptroller-run site M/WBE Report Card NYC.

In announcing yesterday that the Council would pass Intro 911, the update to Local Law 129, Speaker Christine Quinn said in remarks to the press: "It really became clear, crystal clear, that we needed to do more to ensure that [minority and women-owned business enterprises] got their fair share in the city procurement process."

Michael Bloomberg praised the decision by the Council, strongly suggesting he would sign it into law. "These measures are an important part of diversifying our economy," he said.

Not everyone has been enthusiastic about Intro 911. Some Hispanic business groups were disappointed that it lowers procurement goals for Hispanic-owned construction companies from 9 percent to 4 percent, the Village Voice has reported.

"We're very disappointed with this decision," Frank Garcia, chairman of the New York State Coalition of Hispanic Chambers of Commerce, told the Voice. "We thought that they would at least negotiate with us to give us a higher percentage."

City officials have emphasized that the goals are aspirational, not a quota. The participation goal for blacks in the construction sector was also decreased from 12.63 percent to 8 percent in the new bill.

Besides updating the participation goals, Intro 911 makes a number of revisions and enhancements to Local Law 129, among them the elimination of the $1 million cap and a provision establishing an accountability program, M/WBEStat, modeled loosely after the New York Police Department's method of analyzing crime statistics.

M/WBEStat would require agencies to report their progress toward participation goals to a high-ranking city official.

Davis, who started American Fire Control in 2007 and says his company services 15,000 to 25,000 extinguishers a week, said he was keenly interested in the accountability measure that has been added to the local law through Intro 911 because it adds a level of enforcement that didn't exist before.

He said this could help make the process of bidding for city contracts more fair. "We would all like equal opportunity like everyone else," he said.

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Image of City Council business breakfast summit, courtesy of the Council.

Advocates Send Thanksgiving Message Calling For Hike In Minimum Wage


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NEW YORK — Earlier this week, at the Church of the Holy Apostles in Chelsea, about 50 people waited in line  with cafeteria trays to have an early Thanksgiving lunch consisting of an apple, hot sandwich and cider.

As they came to the end of the line, they were asked to sign a card appealing to New York State Senators to pass legislation to raise the minimum wage by $1.25 to $8.25.

It is unclear whether politicians will be listening to the message as they head into the holiday weekend.

Minimum wage was supposed to be on the agenda for a special session of the state Legislature this winter and it was a popular talking point across the state during this month’s elections.

But many lawmakers are now focused on recovery from Hurricane Sandy and prospects for a special session are  growing slimmer by the hour. Control of the State Senate is also in chaos and the popular governor, who could push lawmakers into a deal, has waffled on whether a hike in the minimum wage is politically feasible at this time.

In spite of the dimming hopes for minimum wage, activists and spiritual leaders who gathered Monday at the Church of the Holy Apostles, home of the largest emergency soup kitchen in New York City, were undeterred. They had chosen Thanksgiving Week to time the launch of their statewide campaign to call on legislators to pass minimum wage legislation, bringing together activists, spiritual leaders and unemployed New Yorkers.

Mark Dunlea, executive director of Hunger Action, which helped organized Monday’s event at the Manhattan church,  said the hurricane was no excuse for putting off a special session or a minimum wage hike.

“We should have a special session and fill a gymnasium in Queens,” Dunlea said, referring to one of the hardest-hit regions in the city. “Get all the legislators down there, have them pass the minimum wage hike and everyone can help out with Occupy Sandy and see what really is going on.”

Sen. Joe Addabbo, who represents some of those hard-hit parts of Queens, said he would like to go back to Albany to do “the people’s work” — including passing legislation to increase the minimum wage.

“The governor can force us to go there, but he can’t force us to do work and that is unfortunate,” he said. “I thought we would be back in Albany and addressing important legislation. The time frame on the minimum wage is flexible. If we had to wait to January and the Democrats are in charge we will pass it then, if it has to wait til January and the Republicans are in the majority we will have to be a loud voice for it. But I really thought we would be back in December to work on this.”

In front of the soup kitchen’s altar, religious leaders, community advocates and unemployed residents gathered around a roundtable, passing a microphone to amplify the message.

The Rev. Raymond Rivera, president of the Latino Pastoral Action Center in Brooklyn, said it would be absurd to increase legislator’s wages while the minimum wage remains at $7.25. “Before you raise your own salaries, first deal with minimum wages,” he said, referring to pay raises for legislators that was also expected to be discussed at a winter special session.

But some business groups and legislators say hiking the minimum wage would kill jobs in the state.

Ken Pokalsky, of the Business Council of New York, said his group thinks a wage hike could cost jobs.

“We estimate the minimum wage hike that  has been talked about would cost about $2,900 per job. Our point is: Don't create jobs by increasing cost of labor. If you increase the cost of something, whether it is labor or gasoline, people are going to buy less of it,” he said.

Pokalsky pointed to a 2008 study by Cornell professor Richard Burkhauser that estimated a minimum wage increase in New York would cost 16,000 jobs, and that only 20 percent of the benefits achieved by a hike would go to poor households. “The money comes from somewhere,” Pokalsky said. “Maybe you increase prices, maybe you have fewer jobs at a higher wage, maybe less investment elsewhere or maybe you are making no money.”

A recent study by the office of state Sen. Jeff Klein disputed that notion, finding that a hike would increase wages for over one million workers, generate $600 million in new consumer spending and translate to over 5,000 new full-time jobs.

Business For a Fair Minimum Wage, which counts Costco and the Greater New York Chamber of Commerce among its members, also touts research that says raising the minimum wage does not cause job loss.

Dunlea, meanwhile, has his attention focused on Cuomo, since the governor declared a minimum wage hike was politically dead this summer after the Assembly passed Speaker Sheldon Silver’s bill to increase the minimum wage. The Senate did not take up the measure.

Cuomo has immense political clout and high approval ratings from voters, but even if the governor came out in full support of a hike he would need to get the State Senate to pass the legislation and it isn’t quite clear at the moment who will control the chamber come January.

Cuomo supported a number of Republican Senators but his endorsements were not enough to protect their majority after Democrats picked up at least three seats. Now recounts and backroom deals will decide whether Democrats or Republicans control the chamber.

Senate Democrats have made raising the minimum wage part of their general platform — Mike Gianaris, head of the Senate Democratic Campaign Committee, has touted his conference’s support for a wage hike all year, while Senate Republicans have generally opposed the hike.

“Whether this is addressed in a special session or in January, I believe our candidates won with this across the state,” said Democratic state Sen. Gustavo Rivera, of the Bronx. “But we have to think about the recovery of  the state, so I defer to the governor and the people who were hurt by the storm about when it is done. But I believe this is the  reason why we need to be in the majority. It is clear we have a mandate. We got more votes than Republicans across the state and we  won talking on these issues.”

Senate Majority Leader Dean Skelos called a minimum wage  hike a “jobs killer” and said that a hike would hurt small businesses. Meanwhile, news reports indicate that the Independent Democrats have made a hike in the minimum wage part of their platform and will only back a a Majority Leader who intends to bring the measure to a vote. The four legislators are being courted by Republicans  and Democrats.

But the political wrangling means very little to those gathered at the Church of Holy Apostles. For some, making any amount of cash is a challenge.

Willard Grant, 30, is from Jamaica, Queens, and has been unemployed for several years and is a regular at the Church of the Holy Apostles soup kitchen. Grant has been living in a Port Washington shelter for six months. “I’m not proud. It’s sad, shameful, and embarrassing but I’m taking things one step at a time,” he said.

He has been moving from shelter to shelter because he doesn’t like being on the streets.

Grant says he lost many friends and family members when he began staying at the shelter but explains he does not like asking people for things or relying on others for money.

Two and a half years ago, he lost his job as a stockboy lifting boxes into Jack’s 99 cent store for minimum wage and needed to work other off-the-book jobs because he said his salary was not enough to pay rent.

Now Grant says he rides his bicycle throughout all five boroughs doing athletic tricks and entertaining moves to keep others in shape. “Sometimes people give me money, but I don’t always like to accept,” he said.

Monday’s event to launch the statewide call for an increase in the minimum wage ended with a prayer from a religious leader asking to “turn the heart of our state legislators” and “hear God’s cries for social and economic justice.”

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Photo of activists at Church of Holy Apostles by Bridget Woznica.

Study seeks to help local food producers improve distribution


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Photo courtesy Flickr/rachelkramerbussel


NEW YORK – Eight months ago, Bob McClure, the co-owner of McClure's Pickles in Brooklyn -- purveyor of all kinds of preserved cucumbers in flavors ranging from chili-spiked to garlic dill -- decided to start a distribution cooperative.

His company used one delivery van to distribute the products of other local, smaller manufacturers for a rental fee, with the idea it would help the companies reach more retailers. The companies would upload their invoices to a website and distribute their products together in the hopes of forming a collective pool of clients.

But he said eventually the amount of products made the delivery process too expensive and he had to discontinue the distribution cooperative.

“There is a need for development on a larger scale complete with warehousing, staff, and marketing," McClure said.

Food distribution might not be exactly glamorous, but for many small companies it is a critical link between success and failure. Now the City Council is funding a study by the Pratt Center of Community Development that Speaker Christine Quinn says aims to find ways to “unlock the economic potential of our local food economy."

The study will look at local city food manufacturers – a $5 billion industry that employs over 14,000 workers.

"This commercial sector has remained a bright spot throughout the recession and has established itself as a hotbed of economic activity in the city," Quinn said in a statement announcing funding for the study earlier this week.

She first announced the idea for the food distribution study in a speech before the Association for a Better New York last fall.

Adam Friedman, the director of the Pratt Center for Community Development, said there are "hundreds of food manufacturers scattered around the city, making it a complex network.”

Friedman said the study, which has already started and will involve talks with dozens of local food manufacturers, would look at how to “improve competitiveness within the business environment for local food companies in New York City and reduce the environmental impacts of vehicle emissions in traffic.”

He said there was a lot of redundant food trucks that go to grocery stores and that one main goal of the study is to find ways for local food manufacturers that deliver to the same groceries in Manhattan to “maximize their benefits."

He said the co-op McClure organized for fellow local food manufacturers is one example of that model.

Friedman said the study will also examine ways to exchange information between producers and stores.

“You can get a lot of insightful market information from the grocer, such as price points, competition, and suggestions," he said.

The study, scheduled to be completed by June 2013, will also look at how small companies looking to export their goods can get their products to new markets and gain access to trade shows.

A 2007 study titled “More Than a Link in the Food Chain” conducted for the mayor's office by the the Fiscal Policy Institute and the New York Industrial Retention Network (now a project of the Pratt Center) revealed that local food manufacturers export a total of 34 percent of sales or $1.6 billion to companies outside the city.

The top foods exported were soft drinks and specialty foods, such as chocolates, nut products, frozen food, ethnic foods and spices, the study reported.

Daniel Sklaar, the owner of Fine and Raw Chocolate, said he started off distributing his confections on the subway, then later graduated from bicycle to truck. He also joined McClure's co-op when it was around, and also began shipping his products.

He said he would like to see the study focus on the challenges local food manufacturers have with overseas distributors.

“It’s very challenging. Essentially you have to deal with rigorous amounts of paperwork and logistics, shipping, and international brokerage," he said.

NYC child care programs restored in $68.5B budget


NEW YORK — Mayor Michael Bloomberg and the City Council agreed on a $68.5 billion budget that restores funding for popular child care programs, while assuming the city will reap hundreds of millions of dollars in revenue from the sale of taxi medallions. 

The agreement on the 2013 fiscal budget was announced by Bloomberg and Council Speaker Christine Quinn at City Hall earlier tonight.

The two posed, shook hands and kissed each other on the cheeks in front of a room full of reporters and cameras. 

The announcement brought to an end the so-called "budget dance" where the mayor and the Council negotiate the spending priorities for the fiscal year that begins July 1. 

Quinn, who hopes to become the city's next mayor, said the budget agreement was a statement of values. "With this budget I think all of us in City Hall have made clear that the children of New York City are, without a doubt, a priority," she said. 

The budget provides fo $150 million in funding for child care and after school programs that had been slated to be cut under the mayor's initial proposal. It also includes increased education funding to avoid slashing teacher aide jobs.

City officials said they were able to restore funding to the programs by trimming the budget of other agencies and setting priorities. 

The agreement also modifies the expected revenue from the sale of taxi medallions to expand hail service to the outer boroughs to $635 million in 2013 after the plan was held up in court earlier this month.

The sale of the medallions is expected to continue through fiscal year 2015, with an overall estimated $1.46 billion in revenue.

Earlier this month, a state judge agreed to an injunction after yellow taxi fleet owners sued over the plan, arguing that it violated the state constitution because it was passed in Albany instead of in the City Council.

Bloomberg said the city expected to win the court fight and that taxi medallions would continue to be valued. "Owning medallions has turned out to be a great investment," he said. "And we think people will still want to do that."

The mayor said that if the city were to lose out on the sale "it would put an enormous hole in the budget." 

Besides the taxi medallion sale, the over $3 billion fiscal year gap has also been patched up with the $466 million from the CityTime fraud settlement and $1 billion redirected from the Retiree Health Benefits Trust.

City officials also said last night that the updated budget includes debt service savings of about $150 million and about the same amount from a federal settlement with ING Bank. 

Budget experts have warned the decision to rely on the one-time sources such as the sale of taxi medallions is risky. 

The state comptroller’s office, which is one of four agencies that has oversight of the city’s finances, said the “largest quantifiable budget risk” was the anticipated revenue from the sale of 2,000 taxi medallions. The state comptroller’s office urged the city to “develop a contingency plan” if the money were not raised.

Cuts to child care on the line in budget dance


budget lg

Mayor Michael Bloomberg presents his 2013 executive budget on May 3. Photo by Spencer T. Tucker.


NEW YORK – The Campaign for Children, a coalition that came together this year to fight millions in proposed cuts to public funding for child care and after school programs, has been holding budget vigils on the steps of City Hall since the beginning of June.

It is the kind of scene typical of the “budget dance” that goes on this time of year, when the City Council and Mayor Michael Bloomberg’s administration negotiate the city’s spending priorities for the next fiscal year -- and advocates rally to bring pressure on policymakers to spare their programs from being cut.

An agreement on the budget could be announced as early as today, though the sticking points between the two sides have been significant: besides proposed cuts to child care and after school programs, 20 fire companies could be closed and funding for libraries slashed.

“You plan on doing everything that you like to do, and then the reality brings you back, and then you do only part of what you would like to do,” Bloomberg said during a news conference May 3 to announce his proposed $68.7 billion executive budget.

A new budget must be in place by July 1, the beginning of the fiscal year.

Katherine Eckstein, the director of public policy for The Children’s Aid Society and a member of the Campaign for Children, said the cuts being proposed by Bloomberg would be devastating for child care and after school programs that families depend on.

“These cuts are affecting New Yorkers who are already struggling,” she said recently while standing on the steps of City Hall.

Fiscal policy experts say the budget dance has become little more than a choreographed show.

The mayor initiates it by proposing a preliminary budget sometime around the middle of January that includes many cuts to programs often dear to the Council’s constituents. The Council then undertakes a round of hearings on the proposal, publishing a preliminary budget response in March.

The mayor then responds with his executive budget, which is followed by another round of Council hearings that ended this year in early June. Then negotiations begin, steered by the budget teams of both sides, culminating in an agreement and vote by the Council.

The Council has the authority to restore some funding cuts proposed by the mayor for one year at a time.

Doug Turetsky, of the Independent Budget Office, said the process directs “the Council's attention to restoring funds for existing programs that the mayor knows are very popular in the council member's neighborhoods. So they have less ability to focus on maybe some new initiatives that they want to undertake.”

Maria Doulis, the director of city studies for the Citizens Budget Commission, said it also keeps the city from debating structural changes to municipal fiscal policy.

“Instead of looking at restoring some of the spending on these programs for one year, the Council should really focus on spending items that are growing at a fast pace," she said, adding that the city’s capital spending and health insurance costs in particular should be scrutinized.

For their part, the mayor’s office and Council point to on-time budgets in recent years to demonstrate that the dance, while imperfect, does the work.

The mayor’s executive budget closes a $3.6 billion fiscal year gap with one-time sources of funding, including $466 million from the CityTime fraud settlement and $1 billion in anticipated sales of taxi medallions to expand hail service to the outer boroughs.

It also redirects $1 billion from the Retiree Health Benefits Trust, meaning future taxpayers will have to float the cost of retiree health benefits.

Budget experts have warned the decision to rely on the one-time sources was risky.

The state comptroller’s office, which is one of four agencies that has oversight of the city’s finances, said the “largest quantifiable budget risk” was the anticipated $1 billion that is expected to be raised from the sale of 2,000 taxi medallions. The state comptroller’s office urged the city to “develop a contingency plan” if the money were not raised.

The sale of the medallions has been held up in court. Earlier this month, a state judge agreed to an injunction after yellow taxi fleet owners sued, arguing that the plan violated the state constitution because it was passed in Albany instead of in the City Council.

Bloomberg said at the time of the judge’s decision earlier this month that the consequences of not receiving the expected revenue from the sales of taxi medallions would be “very serious.”

There are other risks to the budget. Experts have highlighted that while the city has regained jobs lost during the Great Recession, the city’s reliance on the financial sector could pose a danger given the economic uncertainty in Europe. The city’s comptroller office called the European debt crisis “a primary threat to both the U.S. and local economies.”

Upon the release of the mayor’s executive budget, the Council said it was particularly worried about cuts being proposed to city-subsidized child care and after-school programs.

The Campaign for Children said 47,000 children would lose access to the programs under the cuts, particularly in neighborhoods with high rates of poverty, unemployment and obesity.

Speaker Christine Quinn, in a statement at the time the executive budget was released, calling the cuts “unacceptable” and that they were “being implemented in ways that create tremendous disruptions for families, communities, and providers.”

Turetsky, of the IBO, said that even though the programs are perennial losers in the budget, this year would be particularly complicated because the are undergoing structural changes.

“The cost per kid would be higher under the new format,” he said. “Even if the funding gets restored, it's not clear you would have the same number of kids being able to take advantage of the programs.”



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