Introduction

Thank you.

I am very pleased to be here at Fordham to discuss a complicated, but essential topic: the way New York City spends, and often misspends its money.

I grew up in Brooklyn and I represent the people of Brooklyn and Queens, people who have to balance their budgets and make their priorities at their kitchen tables. They want someone who will do what they do: set priorities and live within their means.

This election is about choices: the current mayor has one approach -- a top down businessman’s approach. The City now invests in big businesses, big projects like stadiums, it focuses on Manhattan, and there’s not a lot of fighting to hold down costs for normal New Yorkers. The Mayor was ok with the new Albany imposed sales tax last month, he imposed his own property taxes earlier in his Administration, and this week we heard water taxes are going up.

I’d like to offer a set of principles that are different from the current approach.

And after that I’ll talk about some new policies that I think flow from my principles.

I. Principles

Here are my guiding principles: first, always focus on the middle class and those struggling to enter it. Second, be much more aggressive in fighting with Albany for our fair share. Finally, re-align our spending priorities towards the areas that matter most.

Let me talk about each, briefly.

First, a focus on the middle class and poor people in our city.  The very wealthy in this city are doing quite well; I believe we need to give much more help to the middle class and those battling to enter it.  The fact is the working people in this city are having a very hard time making it – housing prices are out of control. Health care is almost unaffordable. And it is incredibly hard on senior citizens and the poor – people who have no flexibility.

I don’t think this mayor gets it – the other day he said poor people get better health care than the rich. When the subways broke down, he said that was too bad, someone should invest more. In the midst of a real struggle for resources for our schools, he is fighting to give the billionaire owner of the NY Jets a $600 million dollar subsidy.

That is just a different focus from the one I will bring as mayor.

Second, we need much more aggressive leadership fighting for our City.

I believe we have been too passive in dealing with Albany – I know the Governor is a Republican ally of this mayor. But we need leadership that doesn’t just keep going along. I saw a while ago the Mayor said you have to “use courtesy” to “curry favor” in Albany, that you get more with sugar than with vinegar.  We’ve tried sugar and it hasn’t worked up there. Let’s try a little vinegar -- we need someone who will stand up.  We only get 51 cents on the dollar for the taxes we send to Albany – soft words are not getting the job done.

And of course it is not just in Albany where we need our Mayor standing up for our City. President Bush, who Mayor Bloomberg endorsed and said was good for New York City, has produced budgets that shortchange New York City out of billions. Just last week the New York Times reported we could lose $166 million in federal housing money if the President gets his way. We need a mayor who fights against these Bush budgets.

Finally, we need new priorities – and this goes for both parties.

For too long New York City spent more than it had. We shouldn’t go back to that. We need a pay as you go approach that invests with the same common sense that people of Brooklyn and Queens, Staten Island and the Bronx employ everyday.

But the new big business priorities from this City Hall are not middle class priorities. Now New York City invests in ways that hurt working people – the tiny amounts to small businesses in the outer boroughs are not enough. The great source of our job growth is in those small businesses – but we should invest more than 25% of our economic development money there.

II. Policies

OK – so those are principles – where would those principles lead us? What are the policies that go along with them?

Let me give you five key priorities. I will have other ideas and ways to pay for them as this campaign progresses. But these are some essential ones.

Albany

First, we need a more realistic attitude towards Albany.

The state government and affiliated authorities own more than 1,000 properties in New York City and pay taxes on only 12 of them.  That is more than $1.5 billion a year of lost revenue. We do not get our fair share of tax money back from Albany, and then to add insult to injury, we give them huge tax breaks.  One commentator has rightly called the State’s compensation to us “token.”

This is an example of why you need more openness in government. As the non-profit, non-partisan City Project noted in its report “State of Distress”: “remarkably, the total amount of specific sources of city revenues lost through all categories of property tax exemption – officially referred to as ‘tax expenditures,’…is not reported in any official city document.”

Guess what? In less than 30 years, we went from taxing almost 67% of the City’s real estate to taxing just over 40% of its total assessed value. We lost almost one third of the City’s property taxes.

That’s not money the average middle class person is avoiding paying – those are insider deals that protect the State and State-controlled public authorities. If you fully taxed all of them, you could save the City more than $1.5 billion.

New Tax Code

Second, if we are to make the City more fair and affordable to working people, we need a tax policy that reflects those values.

We need to combine common sense, fairness, and growth.

You know, when this Mayor took office he said he would not raise taxes – he said it in his first State of the City address.  Then he broke that promise, and raised property taxes 18.5%.

And then he gave a tiny symbolic amount back to property owners.  I’m not sure what the priorities are there.

Recently, the Mayor said he didn’t think New Yorkers were overtaxed.  I think they are. I may be the only one in the race who thinks it, but I have a different approach. When the Mayor raised taxes, he did it on all property owners.

I believe we should restructure the personal income tax rates to create a more progressive tax system. One that is fair and promotes growth.

I believe we should make a commitment to the middle class and poor people of New York City – we will not raise your taxes. I think we should create a new tax bracket for millionaires.  Rather than give millionaires a tax break, as the Mayor has done, we should ask them to up their contribution a few percentage points.  At the same time, we should cut taxes for people who make less than $150,000 a year. We will have a more progressive, fairer tax code in this city.

The very wealthy are doing well in this City – the huge increases in the value of real estate have helped them. They are assets. But for renters, those on fixed incomes, and those struggling to buy a home – the increase in real estate has created real hardships.

We can maintain our growth rate and have a fairer tax code.

I will soon propose legislation that would double the per child tax credit in Washington.

We need an approach that puts our tax cuts where working people need them.

A Reform Budget

That brings me to a third basic policy difference:

We must do a better job of cutting out patronage and waste from our budgets.  You may notice that I am not endorsed by political machines or big developers. I am proud of that – I think to be effective we will have to do some tough things as a City. I think every year the mayor should identify at least 5% of the City’s least effective programs in the budget and cut or reform them. We may take that saved money and decide to try a different approach or just save the money. But in a $35 billion budget, (not including monies from places like the federal or state government) we should commit to cut or reprogram the funds budgeted for the least useful 5%.

Does anyone really think we can’t improve the least efficient 5% of the City government, every year?

The process needs to be objective and fair of course.  The budget office would issue a set of recommendations based on a clear standard: how well is the project accomplishing its goals?

If we took just two steps – taxing state property in the City and removing or reprogramming the bottom 5% of our budget – that would be over $3 billion a year saved for New York City.

More Transparent Government

Fourth, we need more openness in government. It is not only the right thing to do; it will save us hundreds of millions of dollars.

Take the example we are all talking about – the proposed Jets stadium on the West Side. Before we began demanding a more open bidding process, the Jets offered only $100 million. This mayor accepted that. When there was even some modicum of competition, the Jets expanded their offer up to nearly $300 million – they claimed it was $700 million. In fact, the MTA really could have gotten at least $700 million if they had had any real bidders. But the point is that openness is not only the right thing, it is the budgetarily sound thing to do.

Last month I proposed that all city property be sold in open bidding, with the interests of the community considered.

That openness will save us a great deal of money.

Make Education and Investing in Teachers a Priority

Fifth, I believe we need to invest in our priorities first.

I’ve described savings of over $3 billion annually.

As those resources become available, we should put them where they can do the most good for working New Yorkers. Let me give you my priorities.

Education.  We can increase teacher salaries to make them more competitive with surrounding suburbs and we can attract and keep the best teachers in the world. We don’t need to negotiate how much right here, but we do need to say this is a priority; we need to set aside money for this.

Health Care.  We can help more small businesses create groups and associations to buy health insurance.  These small businesses are being crushed – if we move heaven and earth to keep big companies in Manhattan, let’s do the same to help the thousands of neighborhood businesses prosper. And we need to help seniors who are struggling to balance health, housing, and food.

Crime. We can support more police and pay them what they deserve. The number of police serving New York City has actually declined since this Mayor took office.  The NYPD is smaller today than it was on 9/11.  I am the lead sponsor of the C.O.P.S. program in Washington which has put thousands of police officers on New York streets and in our neighborhoods.  We know this can be done. And we know that sooner or later, having fewer cops is going to catch up with us.

Poverty.  Last year 500,000 kids needed emergency food in this city. I propose we create a city wide public interest czar with real resources to help. And this one issue requires going to Washington and claiming what is ours, food stamp monies that are appropriately used to fight hunger.

Will we be able to do all of these right away? – No. But we will get after it.

That is what budgets are: they are about choices.

And that is what this election is about: choices.

We have a choice whether to put more money into top down educational administrators or into teachers and classrooms.

We can invest money on West Side stadiums, or instead help small businesses afford health care and poor kids get enough to eat. That is a choice.

We have a choice whether we make affordable health care a priority – this mayor has said his opinion that poor people are getting great health care – I have a different view.

We have a choice on whether we fight Albany and Washington for our fair share.

Some pundits say that this is hopeless – that an outsider can’t do these things – that budgets will always be controlled by insiders, that small businesses will always lose out to big business, that middle class folks will never be a priority.

I am not endorsed by big political organizations.  But I know most New Yorkers are outsiders too.

And together, we can bring real change to this city.

Thank you, I look forward to talking about these ideas further.