Bloomy Indicts Pataki

Budget Blasts State Actions That Cost City Billions

The same day last week that The New York Times published its portrait of George Pataki as "The Postpartisan Governor," the Center for an Urban Future released a 17-page report spelling out in disturbing detail the myriad ways the imperial Governor has sacked this colonial city. While other reports of the think tank have garnered front-page Times stories, Albany's annual $2 billion gouging of a Democratic city, to the benefit of upstate and suburban Republicans, didn't merit so much as a sentence in any of the dailies.

It's not as if the center's findings were controversial. Michael Bloomberg's financial plan, released over six weeks ago, made a similar case minus the finger-pointing, and it, too, was ignored by a media monopoly that has already re-elected the governor. Bloomberg's muted yet unmistakable 15-count indictment of the governor was disguised as a series of "state initiatives" proposed to help close the city's $5 billion budget gap. This quiet laundry list asked the state to clean up one dirty trick after another, all recent actions initiated by Pataki that plundered the city even while the state was enjoying record surpluses, spurred by the city's boom.

With CEO Bloomberg regularly bowing to Pataki as if he were chairman of the board, the mayor's critique of him ("We would have had this billion and a half except the state collectively took these actions") contains the following compelling examples:

The mayor's budget tries to reverse a slew of policies Pataki initiated.
photo: Jennifer S. Altman
The mayor's budget tries to reverse a slew of policies Pataki initiated.

In October—right after 9-11—Pataki finally settled the state budget, and overrode assembly objections to his proposed elimination of the $114 million a year the city has received since agreeing in 1978 to phase out the stock-transfer tax, creating a gap that Bloomberg said "requires closing."

Two years ago, according to the Bloomberg budget, "the Governor enacted into law pension legislation that provided automatic cost of living adjustments (COLA) to all public employee retirees," replacing the prior practice of "ad hoc supplementation to retirees." With Rudy Giuliani opposing this bonanza, which will cost the city $500 million a year, Pataki and the state legislative leaders agreed to allow the city to phase in the financing of it over five years. Since the costly new benefits are irreversible, all Bloomberg can do is ask that the phase-in be stretched to 10 years, adding $125 million to the financing price tag in the end, but saving $275 million in next year's budget.

Pataki insisted in October, again after 9-11, on restricting the eligibility of poor families for federal child care subsidies, forcing the city to spend $50 million of its own money to provide services to families earning up to 275 percent of the poverty level ($38,500 a year). Even though the Republican senate backed a provision raising the figure to that level—and the assembly pushed for 250 percent, or $32,000—Pataki prevailed, maintaining the standard at 200 percent, or $28,000. Bloomberg is pushing for a Pataki switch, which will free up federal funds for city use, costing the state nothing.

While Bloomberg has kept mum on the greatest Albany outrage—the 1999 elimination of the $500-million-a-year commuter tax—his plan does point out that the state is charging the city $7 million a year more than it should for collecting the personal income tax—actually increasing its fee after the number of city filers dropped by 21 percent with the end of the commuter tax.

Similarly, Pataki has shifted to the city the total cost of administering the rent control and stabilization program, adding at least $23 million to the city's deficit, without increasing the amount of reimbursement the city can legally collect from property owners. The state is also claiming all of the $60 million in revenue from the E-911 surcharge on wireless phones and applying it to state police costs. The city generates 50 percent of these receipts, but gets no benefit, since state police perform no functions here.

The Pataki budget just passed in October sliced $35 million in highway funding and $5 million in law enforcement aid, while cuts in 1999 and 2000 cost the city $24 million in Medicaid managed care assistance, $10 million in homeless aid, and $12.5 in foster care funding. Not only does the Bloomberg plan seek those restorations, it also describes two simultaneous state decisions to cut reimbursement for state prisoners kept in costly city cells, seeking multimillion-dollar reversals of those policies. It also complains that the city has not received a cent of the $25 million in recycling funds authorized by the 1996 environmental bond act, noting that $10 million has already been spent elsewhere.

Bloomberg even contends that the state is taking $15 million of the FEMA 9-11 money due the city, claiming it as an administrative fee. Bloomberg insists that the city can administer these emergency federal funds itself.

In addition to the Bloomberg bill of particulars, the center report lays out a host of other damaging Pataki decisions. He secured a 5 percent increase in revenue sharing in 2000 for every region of the state except the city, costing us $16.5 million this year. The city gets none of another Pataki supplemental revenue sharing package, though our share of state and local aid has dropped 32 percent in the last decade, while Syracuse's has grown 96 percent, Buffalo's 74 percent, and Rochester's 46 percent. Resisting opposition within his own party, Pataki also divided up the tobacco settlement so that cities outside NYC get 145 percent of their estimated damages, while we get 74 percent.

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