An urban fiscal collapse is on the horizon in New York. Last week's warning by state Comptroller Tom DiNapoli that municipalities are in real danger was a welcome, if mild, addition to the awareness of the looming fiscal crisis across the state.
Four upstate mayors are trying, and DiNapoli can be an ally in their efforts to get someone to pay attention. But there's a gap between the oncoming fiscal realities and the current state of our politics.
Last month, at the invitation of Syracuse Mayor Stephanie Miner, an urban fiscal summit was held at Syracuse University's Maxwell School. She was joined by Rochester's Tom Richards, Albany's Jerry Jennings and Yonkers' Mike Spano.
Miner is smart, forward-looking, a good listener who has a real grasp of her city's finances. Richards is a former corporate CEO with an ability to put complex ideas into a few well-chosen words. Jennings is the consummate pro, with a real passion for reform of urban education. Spano is the new kid, who insists on internal reforms before asking for outside help. They decided to become a team, and they're readying for battle.
The message is clear. Three of them have completed four-year financial plans. The plans show that within the near future, each will have budget gaps that cannot be filled with the resources available within the city. For example, two years from now Yonkers will face a budget gap of about $140 million. If it raised every tax it has to the maximum, it would raise $30 million. Similar numbers were presented for Syracuse and Rochester. All this on top of big tax increases and cuts to police, fire, sanitation, parks, education and all other services that the cities provide.
There will be plenty of debate about what's gone wrong, and plenty of finger-pointing: Labor contracts, anti-tax ideology, dishonest budgeting, state and federal indifference are all part of the history.
But beyond blame, Richards explains it well:
"The economic model that worked for New York cities doesn't exist any longer. There's no manufacturing base, there's an influx of populations in need and an outflow of wealthy and middle-class residents, schools are providing for social services and special needs beyond their ability to pay. And the property tax base, simply won't rebound even when the rest of the economy recovers."
DiNapoli suggests that the cities reform themselves by creating four-year budget plans and ending the use of budget gimmicks and borrowing for operating expenses.
He's absolutely right, but that still leaves the central problem unaddressed. In the visible future, too many mayors will have to choose between bankruptcy, control boards or an outside bailout. That's the missing conversation.
The state and federal governments offer no realistic hope. The banks, the governor and the Legislature continue to push borrowing for operating expenses. The cities continue to use gimmicks to paper over structural budget gaps. Labor unions are reluctant to rewrite contracts. And the public wants high-quality services without the taxes to pay for them.
None of these options are good news. Bankruptcy is embarrassing, but it leaves elected officials in charge and treats all the players equally. Control boards put appointed officials in the place of elected officials and usually leave the banks alone, forcing municipal employees, taxpayers and citizens who use services to bear the brunt of the crisis. And bailouts don't seem to be in the vocabulary of presidents, governors or legislators.
The consequences are not the usual food fight within the political and governing classes. Real people, real communities and our vision of ourselves are in danger.
Richards' trenchant observation sums it up:
"Cultural and social bankruptcy precedes economic bankruptcy."
New York won't look like New York if our cities fail. Come fall, these mayors will publish their budget gaps, adopt internal changes and confront the federal and state governments with their plans.
These are very different people in personality, background and style. But they will force the public, the media and the political class to pay attention.
As Spano says, "We can't kick the can down the road any longer."
Let's hope he's right.
Richard Brodsky is a former state assemblyman from Westchester County. He now is a fellow at the Demos think tank in New York City and at the Wagner School at New York University.