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New York Post

 

A Nation Gone Yonkers

September 16, 2012

By Stephen Eide

PRINTER FRIENDLY

With a $1 billion budget and out-of-control union costs, the city is hurtling toward bankruptcy. The scary part? Towns across America face the exact same disaster

These reports show that: 1. Yonkers faced gigantic budget shortfalls even during the good years before the recent recession, and 2. Somehow, the city has always managed to pull through.

Annual, recurring deficits of tens of millions of dollars? Yonkers has been there many times before. So what’s different this time?

According to John Larkin, the Republican minority leader of the city council, what’s different now is that the state has its own problems: "We used to try to look to the state to assist us, and we can’t do that as in the past."

THIS TIME WE REALLY MEAN IT

This is also the view of Mayor Spano. "When the economy was good, the city could get by, but we’ve maxed out on all the credit cards. There are no more buildings left to sell," Spano said.

A former Republican, now Democrat, Spano served nine terms as a state Assemblyman and worked as a lobbyist for Forest City Ratner. A member of a well-connected local political family, Spano was elected in 2011 with strong support from public employee unions.

In other words, he’s not exactly what you would expect from a fiscal reformer. Nevertheless, Spano says that responsible self-government is possible in Yonkers. In his 2012 State of the City Address, he vowed to "step up and right the wrongs of the past in the city’s finances and make the tough choices now that will provide for a brighter future."

Spano has backed these words up with many actions. Some are symbolic, such as auctioning off a few dozen city-owned cars that had been perks for high-level employees. Others have aimed at bringing transparency to Yonkers’ problems, such as issuing a four-year financial plan and convening a special "Commission of Inquiry into the Finances of the City of Yonkers," led by former Lt. Gov. Richard Ravitch and former state Assemblyman Richard Brodsky.

And Spano has pushed for reforms that would provide real savings in the near-term, such as instituting a hiring freeze and picking a very public fight with the firefighters’ union.

Brodsky, among others, is impressed: "He’s done some very tough-minded things."

But it’s still far too early to give credit to Spano for saving Yonkers. More generally, it may be too late. The city is past the time where its fiscal problems could be remedied through better planning and more transparency.

Immediate fiscal relief will only come through cutting spending, which means either reducing compensation or staffing levels. Spano is intent on avoiding layoffs, "We need cops, we need firefighters. We need to keep as many of them working as possible." But this outcome depends entirely on unions’ willingness to make concessions.

FACING THE REAL PROBLEM

For decades, the citizens of Yonkers have been told that the sky is falling, fiscally speaking. This time it may actually be true.

Short of a bailout, what value can the state add? Expert management? Good government? Fair enough, but the city has been moving on these fronts already, and it’s not as if Yonkers’ problem has been incompetence. If anything, the city has been too clever for its own good.

Yonkers may soon face insolvency, but right now the crisis is better understood as one of inflexibility. Yonkers needs more flexibility in contract negotiations and to manage its benefit costs. State government could provide this by, for example, repealing New York State’s Triborough Amendment, which allows pay to continue to increase after contracts have expired, or limiting public-safety unions’ ability to force binding arbitration when contract talks stall.

When asked why he robbed banks, Willie Sutton explained "because that’s where the money is." To stabilize city budgets, both local and state governments must look at where the money is, which means personnel costs. Teachers, firefighters and police officers spent decades getting lucrative promises out of cities across the nation. Now that the bills are coming due, will the unions kill the golden geese?

Yonkers is trying to confront the problem, but, if its contract negotiations fail, another control board may be the only solution left for the city. Control boards are often ineffective and always controversial. If the crisis is inflexibility, then a more logical solution would to empower local governments to deal with their spending problems, not take them over.

Original Source: http://www.nypost.com/p/news/opinion/opedcolumnists/nation_gone_yonkers_I6mmkJCdYobztjMedDKhUL/3

 

 
 
 

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