Fixing mass transit in metropolitan New York could involve several components including a transportation bond act and congestion pricing, Mayor Bill de Blasio said Monday as the city and state renewed their budget tussle.

New York spent $9.9 billion on state and local economic development efforts last year, up 17 percent from the $8.5 billion spent in 2016, according to an independent report.

The report, “10 Billion Reasons to Rethink Economic Development in New York,” from the Citizens Budget Commission, a nonprofit civic watchdog, argues that state and local municipalities have spent more on economic development initiatives without enacting meaningful transparency reforms around grants and tax breaks.

The state’s economic development spending has drawn increased scrutiny since Amazon announced its plan to open an office for 25,000 employees in Long Island City, lured in part by a series of tax breaks and incentives from the state. The deal has drawn scrutiny from New York City elected officials, residents and even among Gov. Andrew Cuomo’s fellow state Democrats. Amazon said last week it is reconsidering the deal in light of the pushback.

Last year, projects in Westchester County received $16 million in state grants as part of $87 million in grants directed to the Hudson Valley region. The December awards announcement represented grants and incentives provided through the state regional economic development councils, which doesn’t cover all state and local incentives that projects are eligible to receive.

Economic development spending in New York State has grown substantially over the past three years and is projected to grow even further in the years to come, according to a report released today by the Citizens Budget Commission.

The report, a follow-up to a Citizens Budget Commission report released in September 2016, is critical of what it terms as a lack of transparency and accountability by state and local economic development agencies as to the benefits of tax breaks and other incentives. The commission’s report states that accountability and transparency has not meaningfully improved since its 2016 report was issued.

Riley Edwards, research associate for the CBC and the author of the latest report entitled “10 Billion Reasons to Rethink Economic Development in New York,” stated, “This brief found that between 2016 and 2018 state and local economic development costs continued to increase, state spending shifted toward discretionary grants and away from as-of-right tax breaks, and transparency has not meaningfully improved.”
Edwards notes that Gov. Cuomo has proposed as part of his executive budget this legislative session to fund the creation of a database of economic development deals as well as procurement reform. However, he said those proposals need to be codified in statute and passed by the State Legislature in this session in order to have the strength of law.

Half of the city's large capital projects are overbudget and delayed—and the city lacks sufficient information to even understand why it is falling short, according to a City Council member studying the issue.

The de Blasio administration posts information about roughly 300 projects that include repairs or the construction of bridges, parks and critical infrastructure. However, Councilman Brad Lander said the project dashboard captures only around 2% of initiatives and thus fails to provide the comprehensive picture needed to improve the process and reduce waste.
In addition, he supports proposed amendments to the city charter that would require the city to annually assess existing infrastructure such as bridges and public housing, do better long-term planning and disclose budget lines for every capital project to make tracking expenditures straightforward.

The Citizens Budget Commission, which recently released a report on poor procurement practices on the state level, said that Lander’s bill doesn’t go far enough. The watchdog group said any expanded project tracker should retain historical data and provide links to official budget line items.

The state is pumping billions of bucks into economic development without proving its initiatives actually work, according to a report released today.

State spending on economic development reached nearly $10 billion last year, an analysis by the Citizens Budget Commission found. That is about 17% higher than in 2016, in large part because of major infrastructure projects, including Moynihan Station.

Though Albany touts the tax breaks and capital spending as fuel for job creation, the watchdog group said, the initiatives lack standard reporting requirements and other transparency measures that would show what's working and what isn't.

"Many of these programs go for years without any rigorous or formal evaluation, and the data don't exist to do such an evaluation," said Riley Edwards, the author of the report. "We would like to see the state move [toward transparency] so we can ask the real questions about what taxpayers are getting for this investment."

New York City Mayor Bill de Blasio told state lawmakers on Monday that he was unable to support Gov. Andrew Cuomo’s current congestion pricing proposal but that with certain adjustments he might.

The Democratic mayor’s conditions included issuing a hardship exemption for people seeking medical care in some parts of Manhattan and dedicating new funds to capital construction.

Last week, the governor said the funds should be put in a “lockbox” dedicated to the MTA. He also said some of the funds should be available for upgrades to the Long Island Railroad, another MTA subsidiary, and not just the subways.

Mr. de Blasio rejected Mr. Cuomo’s call—as he has for the last several years—for New York City to pay more to fund the MTA’s construction projects. More than 70% of the authority’s revenues are now derived from city residents, according to the Citizens Budget Commission, a watchdog.

Mr. de Blasio also sought funds to extend mass transit to parts of the five boroughs where it doesn’t exist and some city authority over the administration of the congestion pricing program.

Spending on economic-development incentives in New York increased 17% over two years to $9.9 billion in 2018, according to a report released Monday by an independent watchdog.

State tax breaks and other incentives, such as grants and capital spending, increased 28% between 2016 and 2018 to nearly $4.4 billion, according to the report by the Citizens Budget Commission, a nonprofit civic organization. Incentives from municipal and county governments grew at a slower pace of about 9% in the same period, to about $5.6 billion.

Riley Edwards, a research associate for the commission, said it isn’t clear whether New Yorkers have gotten a good deal from corporate tax incentives. She said the state should build a public database that compiles economic-development incentive data from local, county and state programs.

“There’s not really a centralized source of information on these things,” Ms. Edwards said. “Instead of looking at what we’re spending and making sure we’re getting what we want to get out of it, this number just keeps increasing.”

The average monthly Long Island Rail Road ticket will have doubled in price over 20 years under the MTA’s latest proposed fare hike — far outpacing inflation and income growth in Nassau and Suffolk counties over the same period, according to a Newsday analysis.

Data show the average monthly ticket has gone from $170 in 1999 to $334.50 today, and would climb to $344 this spring under the Metropolitan Transportation Authority’s plan to raise the fare by 4 percent. The new fare would, on average, represent a 102 percent rate hike over a 20-year span. For some commuters, it would be closer to 120 percent.
While echoing calls for increased belt-tightening at the MTA, the Citizens Budget Commission, a nonprofit state watchdog group, has warned against straying from regular fare increases. It reasons that cutting off the critical revenue stream could result in deferred maintenance and other cost-cutting measures that will cause LIRR service to further deteriorate. The group has said having riders pay about half the railroad’s expenses — more than they do now — is fair.

“If you begin to deprive the MTA of those resources, they’re going to start making short-term choices that may have long-term consequences,” said Jamison Dague, director of infrastructure studies at the Citizens Budget Commission. “That’s just going to make it even more difficult for the agency to improve its performance.”

2019

New York City Mayor Bill de Blasio’s $92.2 billion preliminary Fiscal 2020 budget won praise for his effort to rein in spending before an expected economic slump, though some observers said he didn't go far enough.

In a first for his Administration, de Blasio’s budget includes a "program to eliminate the gap," or PEG, a move the mayor said he took in response to uncertain economic conditions ahead and current funding cuts and policy changes from the state and federal government. The mayor is also expanding a partial hiring freeze and will require $750 million more in savings from city agencies by April.

While giving the plan praise for its cautious tone and partial hiring freeze, the Citizens Budget Commission said more work needed to be done in the budget to ensure the city remains on a sound financial footing during the economic downturn that many predict will hit in 2020.

“Greater recurring savings from making government more efficient are needed to bolster reserves and make certain that the city can provide critical services to New Yorkers in both good times and bad,” the budget watchdog said. “Much bolder action is needed to ensure the city is prepared for an economic downturn. Spending growth should be limited to inflation and reserves should be increased. The PEG announced today should be developed with an eye to making operations more efficient and generating recurring savings.”

Mayor Bill de Blasio laid out a $92.2 billion preliminary budget on Thursday including $3 billion in new spending since the budget was adopted in June—an increase of roughly four percent.

The bulk of the new spending this year comes from the city’s labor agreements and education costs related to the expansion of the early childhood education program known as 3K, mandatory charter school costs, and special education.

For the first time in his administration, de Blasio announced a $750 million savings program known as a PEG (“program to eliminate the gap”). All city agencies will be required to cut a set dollar amount from their budgets (as opposed to an across the board percentage as done under the Bloomberg administration). The savings must be achieved by April in time for the Executive Budget.

Budget watchdogs applauded the PEG program, but said the city needed to do more.

“The budget we heard today builds spending instead of bolstering the reserves that are necessary for a rainy day,” said Andrew Rein, head of the Citizens Budget Commission.

The city points to $5.75 billion in its reserve funds but the largest share of that money, $4.5 billion, is part of the Retiree Health Benefits Trust Fund that is supposed to be used to pay the healthcare benefits of future city retirees.

For the first time as mayor, Bill de Blasio on Thursday called for city agencies to cut their budgets, painting a grim economic outlook for New York City he said is the result of volatile nationwide economic activity, a loss in personal income tax revenue, and cuts and cost shifts in the state budget.

"We know that every agency does its best, but some have programs that perhaps haven't been as effective as hoped or haven't yielded the kind of results we would have liked," de Blasio said at his announcement. "Some have areas where they can find deficiencies. Some have personnel decisions they can make that, even if they're not ideal, they're sustainable."
Budget watchdogs are keeping close tabs on the growth of the overall budget.

"This preliminary budget grows the budget around 3.4 percent. Certainly less than he has done in the past, but it is certainly growth that is unsustainable if we have a downturn," said Andrew Rein, the president of the Citizens Budget Commission."This preliminary budget grows the budget around 3.4 percent. Certainly less than he has done in the past, but it is certainly growth that is unsustainable if we have a downturn," said Andrew Rein, the president of the Citizens Budget Commission.

When Mayor Bill de Blasio presented his preliminary budget proposal last year, he issued solemn warnings about the threats posed by cuts in the state budget and from federal maneuvers that could mean fewer resources for the city. On Thursday, de Blasio repeated that message, but in more dire terms, as he unveiled a $92.2 billion spending proposal for the 2020 fiscal year that starts July 1.

While the plan calls for another significant annual increase in spending -- about $3 billion, or 3.4 percent, from the budget adopted last June -- the mayor also said his administration would have to make difficult decisions in the coming months, instituting a new savings program to find efficiencies in city government while ensuring that front-facing services do not suffer.

“We have some tough choices up ahead under any scenario,” de Blasio said in City Hall’s Blue Room. “We will be guided by the need to make hard choices, to find savings and then when we have to choose, we will favor the priorities that we believe are most strategic and high impact. If a program is nobly intended but not as strategically central or not as valuable, that’s where you will find the cuts.”

The mayor’s proposal will soon become the subject of City Council hearings, and the mayor will be in Albany on Monday to testify at a state budget hearing, where he will tell legislators they must help him undo elements in Governor Andrew Cuomo’s executive budget plan, which the mayor said totaled about $600 million in proposed cuts and cost shifts to the city.

Year after year, fiscal watchdogs and rating agencies have praised the city’s responsible budgeting but have also raised alarms about spending trends that could backfire in an economic crunch. Andrew Rein, president of the nonprofit Citizens Budget Commission, reiterated some of those concerns on Thursday, noting that the budget showed “modest restraint” in increased spending.

“Much bolder action is needed to ensure the City is prepared for an economic downturn,” Rein said. “Spending growth should be limited to inflation and reserves should be increased. The PEG announced today should be developed with an eye to making operations more efficient and generating recurring savings.”

Last week, CBC recommended that the city pursue a four-part strategy of lower spending growth, greater reserves, improvements to the capital plan and strengthening the fiscal health of three major public authorities -- the New York City Housing Authority, NYC Health + Hospitals, and the Metropolitan Transportation Authority.