Welcome to 2009; Hope We Do Better This Year Than Last
These are reflections as the calendar changes. They are not a summary of the old year or predictions for the new one. They are simply observations, made on a cold, cloudy day in a largely empty office.
Part of the theme is that time passes so quickly that events slip into history along with generations. Some is simply recollection of important events, and at the end we look, skeptically, at the near future.
Well, we made it to 2009. Even bad years come to an end, and the 366 days of 2008 closed out Wednesday at a subfreezing midnight in Central Park.
Friday is a weird half-holiday, the stump of a week that was interrupted by Thursday's celebration of New Year's Day. Many people are not working; it is a sign of productivity to complete one's tasks in time to take at least two days off and return to work on Monday, January 5. For some, particularly in the private sector, the entire two week period encompassing Christmas and New Year's is part of the holiday season.
Public employees don’t get Christmas bonuses (at least, they’re not supposed to) but the pensions are pretty good and the legislature keeps sweetening them on request. Isn’t it the least that senators and assembly members can do after accepting contributions from state and municipal labor unions year after year?
As part of the seasonal atmosphere of peace and goodwill, city marshals usually halt evictions during the year-end holidays. The pause on removing nonpaying tenants from their homes is allegedly intended to clear up paperwork. More likely the two-week respite is due to the privately funded marshals not wishing to appear to the public as complete Scrooges. The weather at the time is likely to be very cold. And evictions are no fun for the evictor and even less pleasant for the evictim.
When I was a commissioner, we had a policy of not firing people between Thanksgiving and New Year's Day, so as not to cast a pall over their families during the holiday season. Most agencies, I believe, followed a similar practice. In those days, the city only let people go only if they were not performing their jobs in a satisfactory manner, or had committed a serious offense. Cutbacks for budgetary reasons were rare, and usually took effect on June 30, the last day of the fiscal year.
Year after year, the city payroll grew and grew, in part because it was much easier to hire someone than to fire someone, no matter how serious the misconduct or how deficient the attitude. The sorry facts were often concealed from hearing officers, or denied before them, and whom is the poor man going to believe anyway? And what standard of proof is required? The failure of employee discipline is one of the greatest weaknesses of the civil service system, because the defendant has four allies: his union-provided lawyer, his political rabbi, the influence his local and its officers exert, and civil service rules and regulations that serve as shields for misbehavior and neglect of duty.
Today the discipline situation varies from agency to agency. Statistics are not helpful; a low rate of dismissals may indicate that inspectors and hearing officers are inept, or that all employees are doing their jobs faithfully. The chances are that the former is the case. The uniformed services are often stricter in these cases than other agencies. In many agencies, however, the disciplinary process is subject to heavy union influence, informal but powerful. “After all, we all want to get along together, don’t we?”
The two darkest days, from city employees' point of view, came in 1975 and 1991, the years of Fiscal Crises I and II. Mayor Beame was in office for the first crisis and Mayor Dinkins for the second. Neither was re-elected; Beame lost to Koch, and Dinkins to Giuliani. Many more employees were laid off in 1975 than in 1991. In the Koch years, 1978-89, there were minimal layoffs and the city regained its credit standing.
Now hard times are upon us again, due in large part to the national economic collapse, and in some part to the city's long- standing practice of spending most of its surpluses in the good years, and being caught unprepared with the business cycle heads downward, as it always eventually does. In fact, Mayor Bloomberg has been more prudent than any other public official in setting aside reserves for pension expenditures, health benefits and other purposes. That is one reason the city is relatively much better off than the state government.
Nonetheless, the commitment to 4% raises for practically every city employee every year is a guarantee of steadily increasing costs, which are now beyond the rate of inflation. The practice of not signing labor agreements until two or three years into the term of the contract, often foisted on the city by the union, gives the unions a floor but does not impose a ceiling on prospective benefits.
Givebacks, as the mayor first asked? Forget about it.
The city’s hope now is that President Obama will sponsor a massive bailout for state and local governments throughout the country. The theory will be that if you can bail out the bankers, the mortgage brokers and the manufacturers of automobiles that the public is not buying, why not help the cities and states who provide essential services to the people? Local governments have raised property taxes (often all they have the legal right to do), and are still in danger of foundering because they lack the power of the Federal government to print money. This authority gives a whole new meaning to the phrase, "the power of the press." The collapse of the equity market has reduced the interest rate the US government pays on short-term debt to practically nothing. Unfortunately, most of the debt is long term, and the burden of servicing that debt increases each year.
On the local scene, debt service is an increasing drain on the operating budget of the MTA. The subways can never pay for themselves while they have the burden of paying for capital improvements, which are a constant requirement, if only to keep the transit system in a state of good repair.
There is talk of shared sacrifice, and everyone taking a haircut. When fiscal pain is widely shared, the result is more just than when it is borne by just one of the stakeholders. Subway, bus and rail passengers will pay more in 2009, exactly how much more is left to be determined.
But what about transit workers? Their union, the TWU, has just had its check-off privileges restored at the urging of a kindly MTA. They were suspended at the time of the last transit strike, in December 2005, as the Taylor Law required. But what difference does a law make between good buddies?
Will a newly Democratic state legislature repeal the Taylor law, or modify its provisions in order to protect striking public employees? The law was originally passed in 1967 to protect the public, but times have changed over the past 41 years.
During Fiscal Crisis I there was shared sacrifice. At that time the city had so badly overspent and overborrowed that it was unable to pay its debts as they became due. To help the city avoid bankruptcy, municipal unions deferred pay increases for several years. The United Federation of Teachers, then led by the iconic Albert Shanker, invested $150 million in union pension funds in Municipal Assistance Corporation bonds which at the time were barely marketable. Later the bonds turned out to be highly profitable, paying almost as much interest as people received from Bernard Madoff. Since the MAC bonds were tax-exempt, the results were even better than the swindler's. MAC buyers also received more than the principal amount due, when the bonds were later called at a premium. Today, 33 years later, most people do not remember those days. Many were not even born at the time. That is one reason the story should be retold. To learn much more, go to Wikipedia.
Fiscal Crisis I was the municipal equivalent of the Cuban Missile Crisis of 1962, Forty-six years ago, non-drinkers flooded into bars to keep up with television news programs about the crisis. For days the outcome hung in the balance. Eventually Soviet missiles were kept out of Cuba as a result of secret agreements, which the public was not told about until years later (and the United States removed its own missiles sites, aimed at the Soviet Union, from Turkey).
Who knows what other secret agreement may have been made by public officials, of which we are unaware today. The United State Senate seat is one, new taxes and budget reductions are a second, and the mayor’s entry into the Democratic primary is a third, if he chooses to seek that line. We will learn the answers in a few months, when it will be too late to affect the result..
We are well into a Regency period in local politics: rule by wealth, power, celebrity and prestige. Whether this is better or worse than the old style of rule by crooks and political bosses is something we will discover as time passes.
We cannot close without mentioning the enormous bright spot of 2008; the election of Barack Obama as President of the United States. One never knows what will happen, we have been disappointed by men who were honest when elected but over the years became enmeshed in the mire of hubris. It has been many years since New Yorkers regarded the national government as superior to our local governments, but that renaissance just might be on the horizon.
Henry J. Stern writes as StarQuest. Direct email to him at StarQuest@nycivic.org. Peruse Mr. Stern’s writing at New York Civic.
Miss having you as our parks commisioner! nice blog!
- T
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Posted by: MostEmailedNews.com | January 08, 2009 at 08:18 PM