Comptroller John Liu's Year In Review

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Welcome to Politics Bites, where every afternoon at It's a Free Country we bring you the unmissable quotes from the morning's political conversations on WNYC. This morning on the Brian Lehrer Show, New York City Comptroller John Liu laid out his economic state of the city and reviewed Mayor Bloomberg's proposed budget. 

Private sector job growth in New York City has outpaced the rest of the state and the nation.  Liu says most of these jobs are from the hospitality, education, and health care sectors, and from the finance sector crecovering more vigorously than projected.

Six percent of all private sector jobs in the entire country [were] created this year in New York City. That’s an amazing feat. If you look at the overall percentage of the country, New York City is really leading the way in terms of private sector job creation.

He points out, however, that New York City does still have 9.3 percent unemployment, slightly better than the national average but still high. In addition, he says that attention must be paid not only to the average overall unemployment rate, but that "we also have to pay attention to some substantial disparities in the unemployment, for example, unemployment is three times as high in communities of color."

Liu attributes the lag in employment more to communities and geographic areas than sectors. It's not new—it's but has been a persistent problem—but Liu says the time has come to face this issue head on, and points to steps the city can take. 

This year alone, sixteen billion dollars worth of contracts that the city has taken out in the private sector, and yet a paltry amount of that, just over three hundred million dollars directed towards business owned by women and minorities. That’s a shocking disparity. It’s unacceptable. And we can no longer ignore the inextricable link between disparities in contracting with women and minorities and the disparity in unemployment across different communities..

Liu says that it is hard to tell if there has been an improvement under Mayor Bloomberg, due to a lack of objective complete data.  Today, however, his office is launching their MWBE (Minority and Woman-owned Business Enterprises) Report Card, an online tool which tracks what the city spends with firms that are minority or woman-owned.  Liu is not optimistic. “I’ll say from the outset, it’ll be disappointing, no question about it.” Liu says it is “not about pointing fingers or placing blame, it’s about setting a benchmark, from which to improve.”

The economic pattern of last few years in New York, despite the recession, Liu says has not been too different from the pattern of the last decade.  The richest one percent are becoming richer, so, he says, “it’s not hard to figure out what happened to the other 99 percent.”

Looking to the future, Liu foresees big city deficits for years to come. He credits the Mayor and City Council for starting the year with a balanced budget as required, and for instituting measures to minimize debt for the following fiscal year. But he warns that there is a real risk that the state may significantly decrease municipal assistance to city, and unanticipated collective bargaining issues in the Department of Education may incur unanticipated costs. While he estimates the current year’s risks at roughly $7-8 million, for the following fiscal years, “we’re looking at out-year deficits of $3 billion to $6 billion.” 

While the private sector in New York may be in better health than in the rest of the country, it is still struggling, and tax revenues from the recovering private sector will not be enough to counter the anticipated deficit. There is some good news, however – the real estate sector has recovered somewhat, and consequently real estate taxes and other revenues have been ahead of projections. 

Liu approves of the measures enacted by the Mayor to combat the deficit, but thinks that layoffs and service reductions will not be enough.  The city is going to need to pay closer attention, he says, to contracts with outside consultants.

In this time of fiscal austerity it is not clear to me, as Comptroller, that we really do need all of those consultants working for the city.

There's also the matter of monitoring all the contractors for the city, a pressing need that was underscored by the indictments announced on Wednesday against employees of contractor CityTime, who are accused of bilking taxpayers of $80 million.

I’m speechless. I think all New Yorkers are speechless about how this could have happened in this time of fiscal austerity. Eighty million dollars. A few people charged with ripping of the city through lots of different methods of fraud. The point here though is it’s not just about these accused suspects of what they have done, it’s more about the need for the city to tightly monitor, tightly manage, these contracts.

Liu says there's more to be done to ensure against what he euphemistically calls “slippage” like this, and also to ensure that contracts taken out by the city are necessary and in line with terms. “My job” he says, “is to protect the city’s taxpayers and the finances of this city.”