Archive for December, 2008

GET YOUR SHOVELS READY, NEW YORK

By ED OTT & KATHRYN WYLDE

December 17, 2008 —

IMMEDIATELY upon taking office, President Barack Obama will launch a massive effort to revive the economy – centered on $500 billion in new funding for modernization and construction of roads, bridges, airports, schools and infrastructure. By the end of January, states and localities need to identify “shovel ready” projects in order to compete for the funds.

When President Franklin Roosevelt undertook a similar program in 1933, New York won the lion’s share of money. That was because Robert Moses, the legendary “construction czar,” made sure the state was first in line with ready-to-go projects. He established a partnership with the construction industry, organized labor and financial institutions to get big projects going on a handshake. Many of our best public facilities are products of that era’s public-private partnerships.

Now we must duplicate that achievement with the Obama stimulus program.

We proved we could do it after 9/11: Emergency powers were invoked to clean up the World Trade Center site and get Lower Manhattan back in business in record time. Industry, labor and government all contributed to an accelerated recovery.

And today we face worse damage, in economic terms, than the terrorists inflicted on 9/11. Our state and city are broke – the state deficit is projected to reach $51 billion in four years. Finding places to cut costs is crucial – but that alone won’t be enough: We have to stimulate the economy and create jobs.

Obama’s program presents a great opportunity – we must win as much federal investment as possible and put the money to work quickly. Can New York rise to the occasion?

Gov. Paterson is certainly trying. With the same foresight he demonstrated in tackling the budget crisis before others woke up to the problem, the governor established a commission in October to determine how New York can tap the expertise and resources of business and labor to help government finance, engineer, manage and build public-works projects on an accelerated, cost-effective basis. The Commission on State Asset Maximization will issue its first report this week and, based on hearings it held across the state, the outlook is promising.

The commission has been asking hard questions about how the state’s cumbersome procedures for procurement, contracting and financing can be reformed to reduce costs and shift risk from government to private-sector experts. The long delays and cost overruns plaguing the Second Avenue Subway are just one example of how poorly positioned we are to make use of a quick start stimulus program.

The commission also found that New York is not in a strong competitive position for pending federal dollars. For example, we recently lost $350 million in federal grants (the funds were reallocated to Chicago and Los Angeles) because we couldn’t resolve our local differences over a traffic congestion-pricing plan.

A strong follow-up on the commission’s work could ensure that New York gets a healthy share of the Obama stimulus dollars. By including strong labor standards and protections, it removes the stigma that public-private partnerships are simply vehicles for privatization that result in lower wages and benefits.

A perfect storm of events is making the prospect of public-private partnerships look like a smart component of New York’s economic-growth strategy. Fortunately, storms of this magnitude don’t come around too often. But then again, neither do these types of opportunities. Like Robert Moses, we need to be ready, and we need to be bold.

Ed Ott is executive director of the New York City Central Labor Council, which represents more than 1.3 million workers throughout the city. Kathryn Wylde is president and CEO of the Partnership for New York City, the city’s leading business group.

BROAD COALITION OF LABOR, BUSINESS, CIVIC AND ENVIRONMENTAL LEADERS CALLS FOR $12 BILLION STIMULUS PACKAGE TO CREATE OR SAVE 435,000 JOBS ACROSS NEW YORK

Immediate Investment in Improving Infrastructure Would Put Thousands Back to Work While Making Crucial Improvements to Roads, Bridges, Public Transportation, Parks and Water Systems Across State

December 10, 2008 (New York, NY) – A broad coalition of labor, business, civic and environmental leaders from across New York today called on Governor David Paterson and the state legislature to pass a comprehensive $12 billion New York State stimulus package that would create or save 435,000 jobs across New York. The coalition also called on the state’s congressional delegation to devote federal stimulus money towards specific projects they laid out in their proposal. The announcement was made just weeks after State Comptroller Thomas DiNapoli made the grim prediction that New York stands to lose 225,000 jobs over the next two years.

Economists to Governor: Raise High-End Income Taxes To Help Close Budget Gaps

More than 100 economists from throughout New York State joined together this week to
send a message to Albany: steep cuts in state spending will weaken the already struggling
New York economy, and will hurt poor and middle income New Yorkers. In a letter to
the governor, the economists urge him to take “a balanced approach” to closing the gap in
the state budget between revenues and spending—that is, an approach that includes
raising taxes on high-income households.

Read the entire letter: Letter

DiNapoli Predicts Loss of 225,000 NYS Jobs and Thompson Foresees 50% Drop in Wall Street Bonuses at BALCONY Forum

New York State Comptroller Thomas P. DiNapoli warned of the loss of 225,000 private sector jobs and New York City Comptroller William C. Thompson Jr. warned of a Wall Street bonus pool decline of 50% at a December 11th breakfast gathering sponsored by BALCONY, the Business and Labor Coalition of New York. The gathering, organized by BALCONY Director Lou Gordon, occurred at the Financial District headquarters of the United Federation of Teachers and was attended by more than two hundred business and labor leaders.

BALCONY Co-Chair Bruce Ventimiglia, Chairman of Saratoga Capital Management, introduced Comptroller Di Napoli, describing him as “exemplifying what a great public official should be, competent and alert to help all New Yorkers.” DiNapoli said that the comptroller position was a great training ground for executive positions like city mayor. He then paused and gestured to Comptroller Thompson on the dais. There was general laughter among the audience, most of whom were well aware that Thompson had just announced his candidacy to replace Mayor Bloomberg the day before.

Then DiNapoli turned serious and described the financial crisis that New York is facing because of the “Wall Street meltdown.” He warned that spending cutbacks in the state budget would spare no sacred cows, because anticipated job losses would mean that the state and city would lose up to $30 billion in revenues over the next three years. DiNapoli foresaw 225,000 job losses in the private sector, a number that could increase because of the multiplier effect. Just as financial sector prosperity creates many new jobs in other sectors of the workforce, so too does a financial sector decline mean layoffs for many of these ancillary positions.

DiNapoli also mentioned the proposed auto industry bailout, stating that it would help western New York as well as Michigan and Ohio, because the Buffalo area economy is highly dependent on small businesses that serve the auto manufacturing giants. 230,000 New Yorkers work in the automotive sector, receiving wages and benefits totaling $12 billion annually. Finally, DiNapoli warned that an anticipated federal stimulus package will help, but will not supplant the state’s efforts to overcome the structural budget gap that has existed in New York State for many years.

After DiNapoli concluded, UFT CEO Michael Mulgrew welcomed the audience to the forum. BALCONY Co-Chair Alan Lubin, the Executive Vice-President of the New York State United Teachers, introduced City Comptroller Thompson. Lubin said “I have known and worked with Bill for over thirty years, and he’s been a great steward for the finances of New York City.”

Comptroller Thompson characterized the current financial crisis as “the worst economic downturn since 1929” and ruefully stated that “we’ve learned more about the credit markets over the last few months than we ever wanted to.” Thompson assessed the likely damage to the five boroughs, referring to a report that his office has prepared, “The State of New York City’s Economy and Finances” (www.comptroller.nyc.gov). According to the analysis, 46,000 financial sector jobs will be lost, and 60,000 additional jobs that service the financial industry are also at risk. For each $1 billion drop in Wall Street bonuses, the city loses $20 million in personal income tax revenue. As the predicted 2008 slash of Wall Street bonuses nears 50%, this means that city and state revenues will also diminish. Thompson blamed this crisis on “an oversight failure of the banking industry by the federal government, especially great after the SEC made changes in 2004 that allowed banks to operate with a 30 to 1 debt to assets ratio.”

Thompson did sound one optimistic note. “If we ever needed a new president who understands the problems of cities, now is the time, and President-Elect Barack Obama is one fresh ray of hope.” He noted that Obama is proposing the largest public works project since the Interstate Transportation System in the 1950s. Thompson also believes that modification of at risk mortgages is a further critical key to recovery, and that the federal government should do this, as the problem crosses all state boundaries.

On a local level, Comptroller Thompson called for the reinstatement of the commuter tax and a new weight-based vehicular registration fee, the latter being part of his solution to the looming MTA crisis. He also pointed to the new Moynihan Penn Station as an example of a good infrastructure investment.

Both DiNapoli and Thompson stayed for a vigorous question and answer session, and both sang praises to BALCONY and its co-sponsors – UnitedHealthcare, TIAA-CREF, First American Title Insurance of New York, Saratoga Capital Management, New York State United Teachers, Emblem Health, and the Marwood Group. DiNapoli specifically welcomed the participation of the unique BALCONY coalition, asking that BALCONY serve as a key player in generating innovative new approaches to the upcoming financial difficulties. Thompson said that he had watched BALCONY grow over its three year history with great satisfaction.

The BALCONY coalition was well represented at the forum. Representatives included AARP, Autism United, BECATECH, the New York State AFL-CIO, Central Labor Council of the City of New York, Captain Consultants, Community Healthcare Network, CSEA, CWA 1180, First American Title Insurance of New York, the Fiscal Policy Institute, the Greater New York Chamber of Commerce, Local 46 Labor Management Cooperative Trust, the Marwood Group, M. D. Sass, the Medicare Rights Center, the National Center for the Study of Collective Bargaining in Higher Education and the Professions, the Public Employees Federation, the RWDSU, the South Bronx Board of Trade, Suggs Media, TIAA-CREF, Timberline Capital, Topdot Mortgage, UnitedHealthcare, and the Workforce Development Institute.

For further information on BALCONY, call (212) 219-7777.

Poll: Raise personal income tax

Most New Yorkers are in favor of increasing the personal income taxes on relatively wealthy people — but they want that done in concert with budget cuts to remedy the state’s fiscal woes, says a poll to be released today by the Working Families Party.