President's Blog

NYC in the NYHFR

September 9, 2011
post contributed by Megan Flynn

New York has done better during this recession than any other city, Stephen Goldsmith said at the Roundtable’s August Event. He acknowledged the powerful factor of New York City’s size playing a role in its resilience, but also explained why this same attribute is holding it back from reaching its potential. Goldsmith, the then deputy mayor of New York City, gave members a glance into the inner workings of the city’s management and the complicated red tape intertwined within it.

“Rather than too few rules governing public employees, there are far too many…Antiquated and overly complex procurement rules lead to year-long delays and waste millions of taxpayer dollars... Simpler, less prescriptive processes with greater transparency would produce better, faster and cheaper results, minimize political favoritism, increase competition among contractors, and improve the quality of work done on the taxpayer's dime“, Goldsmith wrote in a March 18th, 2011 Wall Street Journal Article. He discussed this topic at length at the Roundtable’s August event using the example of opening up a new restaurant New York City – “It’s excruciating”, he said. All the red tape was setup to make sure no government worker abuses discretion but unfortunately now no one can exercise any discretion at all. The rules accumulate for good reason, but they accumulate, he said.

There was no escaping the government’s notorious revenue vs. spending issue, and Goldsmith provided a specialized perspective from within NYC’s management. The real issue is not on the revenue side, it’s on the expense side, Goldsmith said. Spending and expenses are growing at an alarming rate and are growing much more than the overall wealth of the city. Current trends are not sustainable, Goldsmith said and he particularly went into detail regarding the burden the city has with city employee retirement costs. The city has been forced into eliminating current employees to pay for past employees’ retirement benefits, he said. This issue which he also touched on in the recent WSJ article, “In fiscal year 2012, New York City will pay $8.4 billion from its operating budget to fill a hole in its unfunded pension obligations. An expense of this magnitude leads directly to budget cuts for social programs and education, and to higher taxes that squeeze working families' budgets and kill jobs.”

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