Posted on 11/25/2002 6:17:59 AM PST by TroutStalker
Edited on 04/22/2004 11:47:33 PM PDT by Jim Robinson. [history]
When businessman Michael Bloomberg took office as New York's mayor last January, he boldly declared that the city was "open for business." It was an essential message to the nation and the world from the new leader of a city that, less than four months earlier, had suffered a devastating attack that blew a hole in its second largest business district, killed more than 3,000 people, and vaporized 90,000 jobs.
(Excerpt) Read more at online.wsj.com ...
. . . And It's Worse By RICHARD RAVITCH
Than the Last Time
With an acknowledged deficit of between $5 billion and $6 billion, there is no question that the government and the people of New York City face a grave crisis that will lead to increased burdens and reduced benefits. Today's problem is far more intractable than the fiscal crisis New York experienced in 1975. Unfortunately, very little of what happened 27 years ago is useful to solving the problems of today.
In 1975, the biggest problem for the city was billions of dollars of overhanging short-term debt that couldn't be refinanced in the public markets because of the growing deficit, as well as Wall Street's appropriate unwillingness to continue underwriting its notes and bonds. The staggering schedule of maturing debt resulted from years of imprudent borrowings; amongst other causes, the city had borrowed against "estimated" future revenues and tax receipts that never materialized. The immediate concern today, however, is the size of the operating budget deficit, five times greater than it was in 1975.
The second major distinction between then and now is the fact that New York State in 1975 had essentially a balanced budget and had already taken the steps in its 1976 budget to ensure that it would be in balance despite declining revenues caused by the recession. The state's financial integrity was critical to the ultimate solution of the city's problems. Today, however, the state faces a budget deficit of its own reportedly in excess of $6 billion. Its financial ability to assist the city is severely limited.
The third distinction is that in 1975 the banks had a major stake in New York City's fiscal woes. They had been the underwriters of the notes and bonds that threatened default and would have certainly been defendants in lawsuits had there, in fact, been a default. The banks also owned a great deal of paper in their own name because tax exempt bonds were useful assets on the banks' books at that time. The leadership of the major clearinghouse banks comprised a major portion of the civic and business leadership of New York. Today the banks do not underwrite city debt, don't hold the securities in portfolio and there is far less civic leadership in this city than there was 20 years ago. Their role in 1975 was critically vital to the ultimate solution.
Next, the media in 1975 was taken by surprise with the prospect of New York City's insolvency and became very self-critical after the fact of their failure to foresee the crisis. This year, however, newspapers have been diligent in reporting the likelihood of tax increases and service cuts given the size of the city's deficit. No one should be surprised by what ever happens in the next 12 months.
In 1975, the president was Republican and the governor and the mayor were Democrats. Today, all three offices are occupied by Republicans. It was not difficult for the Ford administration to express a lot of rectitude about the city's profligate behavior. In addition to the inevitable partisanship, Mayor Beame had been comptroller of the city during Mayor Lindsay's second term, the period of time in which the city began the practices that resulted in the 1975 crisis. In light of the devastating effects of 9/11, no one is likely to criticize former Mayor Rudolph Giuliani for not having foreseen the problem. Mayor Bloomberg is a supporter of President Bush and, even more importantly, bears no responsibility for the great deficit having not held public office until 10 months ago.
Most significantly, New York is not alone in facing fiscal woes as it was in 1975; nor is it uniquely a Northeast problem. The National Bureau of Economic Research foresees a budget shortfall of $58 billion in 2003 for all the states of the union.
If New York City had not received help from the state and federal government in 1975, it would probably have been forced to file a bankruptcy petition in order to avoid a dismemberment of its assets. Whereas, no one should doubt Mayor Bloomberg's determination to balance the budget even if he should get no help from other levels of government, the burden on New York City's tax base and the quality of public services would be so adverse as to justify a serious effort on the part of the political and business leadership from other levels of government.
No amount of importuning the federal government by the liberals will have any effect and conservatives must recognize that lowering federal tax rates while local taxes go up by equal or greater amounts conceptually could have no positive impact on the economy.
The severity of the problems facing state and local governments and the paradox of rising local rates and declining federal rates argue very strongly for re-evaluation of which government functions should be paid for at the federal level and which on the local level. It would be timely for the Congress to address this fundamental issue and examine for example whether the health-care system shouldn't be a national obligation. The external threats that we face are a reminder that what we have in common is more compelling than our local and regional differences.
No one can deny that the well being of New York City has an impact on the state and on the nation. Unlike 1975, the mayor has a lot of company amongst state and local elected officials and given his support of the president, he should have a much more sympathetic audience.
Mr. Ravitch, a former chairman of the New York Metropolitan Transport Authority, is a New York lawyer and co-chair of the bipartisan Millennial Housing Commission. http://online.wsj.com/article/0,,SB1038186659199200748,00.html?mod=opinion%5Fmain%5Fcommentaries
Bingo! By RUSS SMITH
I'm a disappointed man. Actually, worse, I'm a disappointed New Yorker. Michael Bloomberg, my mayor -- contrary to his own admirable business career -- hasn't contributed one creative idea in office. But on the assumption that the mayor doesn't want his city to resemble Newark a year from now, I offer a suggestion that hasn't even been considered, at least publicly, in his cubicle at City Hall. It's time that gambling become legal in Manhattan; and I'm not thinking merely of slot machines at the corner bodega. Rather, the establishment of casinos -- Las Vegas-style -- in locations like Times Square and the West Side piers would immediately yield revenue that's so vital in the current depressed economy.
Think this through: Tourism, which has suffered enormously, is bound to increase dramatically, drawing not only tri-state visitors, but tour groups from the rest of the country and overseas. While there's no shortage of legalized gambling in the U.S., the lure of New York could be expected to trump say, Missouri. The majority of these casino patrons would be casual gamblers, who'd typically spend three hours pulling slots, playing blackjack or roulette and then retire to a nearby hotel. Broadway, restaurants, galleries and retail outlets would inevitably see an uptick in business.
Gambling opponents cite organized crime as a reason to nix casinos in the city. Excuse me for stating the obvious, but the mob is still well-entrenched in New York, as any business owner can attest to. Another objection is rooted in morality, a ludicrous position considering that panhandlers, three-card-monte sharks and other undesirables already roam the streets looking for easy prey. New York, "the city that never sleeps," hardly resembles a Utah community.
Currently, Massachusetts's governor-elect Mitt Romney, a Mormon, is contemplating legalized casinos as a means to cut his own state's deficits. Not surprisingly, the Boston Globe is opposed to the idea, calling it "fool's gold." It's likely Mr. Romney will prevail, despite the provincial naysayers. Mr. Bloomberg, on the other hand, hasn't even discussed the issue. In my mind, that's a dereliction of his duties.
Mr. Smith is editor-in-chief of the New York Press, for which he writes the "Mugger" column.
http://online.wsj.com/article/0,,SB1038186890410067508,00.html?mod=opinion%5Fmain%5Fcommentaries
Thank you. We pay the highest taxes in the country. I commute each and every day from Westchester. They charge me $126 per month to come into Grand Central every day. Now they want to put a commuter tax on us that is sky high. Millions of commuters from the suburbs and $126 or more (depending on how far you live) a month - and they still want to tax us some more. Something is rotten in the Big Apple.
Other than that, he apparently can't give up his democrat background and try to run the city competently. The next election will show him the door, either in the primary or in the general.
But, no one is willing to touch that budget line item.
Talk about your "third rail" issues.
Now I see I spoke too soon, for really, who can tell the difference?
That is debatable. On some issues (abortion, guns) he was a RINO. On others (crime, fiscal policies, taxes) he was very main stream republican. Show me one issue that the current mayor is anywhere near main stream republican (ie where he is close to the postion on issues of the party HE IS A MEMBER OF...)
CORRUPT UNIONS.
CORRUPT POLITICIANS.
Gee, as I look at those, I realize the REDUNDANCY there.
Excuse the metaphor, but I heard that Tony Soprano and the boys got a piece of nearly every chunk of rubble moved from the WTC site.
Now THAT'S POWER!
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