Actually, that subsidy was proposed by Pataki and Rudy...and the chief opponent to it was Ralph Nadar.
Long story short, the NYSE and member firms contribute uncounted billions to the City and if the exchange were to move to Jersey City or Greenwich, the City and State would see a massive decline in revenues. You have said previously that the Exchange only employs 5,000 people.
Let me suggest, as a retired investment banker on Wall St., that its contribution extends far beyond its employees to include all the firms that are members. The Mayor and the Governor were IMO simply doing their best to improve their hold over the exchange and $1 billion is a drop in the proverbial bucket.
The member firms of the NYSE have a global capitalization of $17.4 Trillion. They would pay a little more to use a shiny, new trading floor. Let the market decide. And the NYSE was not talking about leaving the city, but to build an additional trading floor somewhere in the city or elsewhere. Even if the trading floor were to move, the member firms are scattered all over the United States (do you think that Dell is headquartered in NYC?) and the location of the stock trading floor is immaterial to their location. Therefore, my point is still valid. The NYSE only employs 5,000 people and the retention of its new shiny trading floor in NYC isn't necessarily worth $1 billion in wealth confiscated from the taxpayer and given away.
I'll admit, however, that there are merits on both sides of this issue and you could make a case that this particular event demonstrated "fiscal responsibility" on the part of Giuliani. But you can be sure that the Democrats are going to hammer him with it.
Put aside my point of view on the subject, this represents a significant liability to Giuliani in the General election. The Democrats will hang this millstone around Giuliani's neck and their arguments will hold obvious appeal to the average voter. I can see the campaign commercials now and hear how this would be brought up in the debates. Any defense Giuliani would offer would be too complex for the average voter. The images will show impoverished areas in the city, run down and leaky public schools, etc. Then they'll show gleaming 3D renderings and architectural drawings of the grand plan. They'll then make the emotional arguments against corporate welfare and mention the HUGE annual profits that NYSE-listed corporations make. They'll mention that the NYSE has a global capitalization of $17.4 trillion, including $7.1 trillion in non-U.S. companies. Then they'll likely go back to an image of a poor, black girl getting off of a rickety old school bus and walking up the steps of a barbed wire fenced, run down public school in one of NYC's most blighted areas. Now, you tell me how that's going to play to the voters in November 2008.
The next campaign ad the Democrats might use would be to have statements from surviving firefighters and the families of firefighters who died on 9/11. They'll say that Giuliani knew about the radio comms problems since the original 1993 WTC attack and did nothing about it. There are many firefighters and family members who blame the deaths of so many firefighters on the fact that their radios did not work in the WTC and that they didn't get the evac order. And there's a report from the 1993 WTC attack that points this out. They'll do the whole NYSE sweetheart deal thing (gleaming towers, global capitalization of $17.4 Trillion, etc.) as described in the previous paragraph, and then they'll point out the $1.1 Billion subsidies to the NYSE equaled the entire annual operating budget of the New York City Fire Department. They may close the ad with a split screen of video with Giuliani on one side smiling and shaking hands with his billionaire buddies and on the other side would be Giuliani shaking hands with firefighter family members at a funeral.
Just use your imagination, as I have, and you can see how much mileage the Democrats can get from this.