2004-08-06 / Columnists

The Rockaway Irregular

by Stuart W. Mirsky

Still wrestling with the city budget as we move toward another election cycle, Mayor Bloomberg has been promising real estate tax rebates to residential homeowners (after leading the charge to raise these same taxes in his first year in office) and insisting that he will hold the line on new taxes since, as he recently said, New Yorkers “have already done their share.” The mayor has to fight this battle while keeping city services up to par and holding the civil service unions, chomping again at the bit for a resumption of routine contractual pay raises, at bay. It’s not an easy task but it’s part and parcel of what it means to govern this major American city.

To the mayor’s credit, things are looking up. The city is back in the fiscal black, at least for the short term, largely due to the increased revenue from higher taxes and a resurgence of the business economy, upon which so much of the city’s revenues depend. So far, the New York economic recovery, while lagging much of the rest of the nation, has not stalled out due to our much-higher-than-the-national average tax rates though an argument can be made that it could be doing much, much better if taxes weren’t so draconian. And, while not a lot of new efficiencies seem to have been introduced into city operations, at least services appear to have stabilized and, in some cases, actual improvements can be detected.

One of the most obvious things Rockawayites may have noticed is the massive clean-up that has occurred over the past few months, of the long vacant and fallow lots in the middle of our peninsula. Once an agglomeration of overgrown eyesores, filled with garbage and other debris, these lots have recently been cleaned of debris and much of their wild overgrowth is steadily being trimmed away by an apparently reinvigorated Sanitation Department. No doubt this is due, in part, to the mayor’s recent visits out here in connection with the kick-off of new housing construction in the old Arverne Urban Renewal area.

Perhaps the mayor or his advance men saw, and were appalled at the unsightly squalor of the areas surrounding the sites on which the new homes are to be built. Or perhaps Sanitation actually acted proactively here and began the clean-up, even before the mayor made his appearance. Whatever the reason, the improvement is noticeable.

Also, I’ve learned that the underutilization of some city buildings has begun to be addressed. Some readers here may recall a number of columns I offered a year ago on this and some related matters. I noted at the time that the city owned buildings throughout the five boroughs which were under-occupied while, at the same time, city agencies routinely rented space at costs that were three and four times what it cost to operate the city’s own buildings.

Worse, the rental deals the city secured tended to be poorly structured so that private landlords had the advantage over city tenants and the city agencies renting the spaces in question tended to rent more than they really needed. All of this added up to higher costs to the city because of a failure to use its own resources efficiently. Now it seems that some of this, at least, is being addressed.

As a taxpayer and citizen I’d like to see more attention to this of course, particularly the development of a full-blown computerized system for tracking and monitoring utilization of the city’s vast real estate portfolio. But as a taxpayer, I guess I have to be content with small gains, hoping the larger ones will follow.

Needless to say, New York’s municipal operations still have a long way to go, and this is not surprising given the nature of such a bureaucratic behemoth.

As yet, I’ve heard nothing concerning the crying need to address the massive inefficiencies in the city’s capital renovations system. There, a lengthy and cumbersome contracting mechanism and a centralized capital agency, incentivized to promote and countenance higher costs with little regard to comprehensive on-site project management or cost-tracking and project speccing, leads to costs for capital work that routinely come in at three to four times the costs for equivalent private sector work.

City capital project completion times usually exceed the private sector’s completion times by roughly the same multiple, as well. Worse, the work delivered to the city is often of such poor quality that it requires extensive subsequent projects to make it whole, at still more added costs, of course. Some of this could be ameliorated if the city better monitored and enforced warranty provisions, but it often fails to do even that. So Mayor Bloomberg still has opportunities before him to improve city operations and leave our town better than he found it.

Another area the mayor ought to be looking at happens to involve taxes. While the mayor raised taxes on city residents to close a disastrous budget gap that seemed to hit us on the day he walked into City Hall, I’m advised that there remain certain tax inequities which, if repaired, might not only make the tax system fairer for New Yorkers, but would actually generate more revenue from those who make their money in this city.

Now I’m not in favor of big taxes since I know that taxation can be a disincentive to business, the real economic generator upon which the life of New York City depends. But we all know you can’t have a government, and all the things government does for us, without some kind of taxes.

Someone recently mentioned to me that non-city residents who own property in New York City are not obligated to pay real estate taxes on that property, unlike those of us who live here.

According to my informant, a person like Leona Helmsley, who owns vast and lucrative hotel holdings in town, falls into this category since she lives in Connecticut. If it’s true she, and others like her, pay not real estate taxes (and I haven’t fully confirmed this), then one might reasonably ask if this is not one more gigantic loophole through which city revenue is flowing in the wrong direction? Certainly, the Helmsley (and similar) properties all benefit from the city infrastructure (sewers, roads) and services (police, fire) that support all city property. Isn’t this another area where a mayor, with an eye towards increasing city efficiency, should be looking?

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