Bloomberg Proposes Ideas for Federal Economic Plan

Fri January 16, 2009 - Northeast Edition
Sara Kugler Frazier




By Sara Kugler

Associated Press Writer

NEW YORK (AP) Citing growing budget shortfalls and troubling economic trends, Mayor Michael Bloomberg’s administration is lobbying for direct aid and other assistance from the federal economic stimulus package, according to a letter sent to New York’s congressional delegation.

Bloomberg’s administration outlined its concerns and requests in an 18-page document sent to the delegation on Jan. 5 as Congress works to develop the enormous aid plan. The letter was obtained by The Associated Press.

Bloomberg’s federal legislative director, William J. Daly, warned in the letter that when cities suffer in economic downturns, the federal government also feels the pain as core services in urban areas get cut, causing cities to lose residents and jobs, eroding municipal tax bases.

“Maintaining the livability and economic vitality of cities is critical to a national recovery,’’ Daly wrote.

Congressional leaders said the economic recovery plan won’t be ready until the middle of next month, at the earliest. President-elect Barack Obama has refused to put a price tag on it, but his aides have said it could cost as much as $775 billion.

Governors, local leaders and interest groups have been lining up with wish lists and suggestions for how they would use money. The package is likely to include tax cuts, funding for health care programs for the poor and a large amount toward infrastructure projects.

The Bloomberg administration did not put a number on how much aid the city wants.

Jeff Kay, director of the Mayor’s Office of Operations, said the memo was less about dollar amounts and more about suggesting ways that funding could be best targeted and used.

For example, it proposes that the economic package allocate school construction funding in a manner similar to the Title I program, which provides money directly to local education agencies, rather than states, and targets districts with the greatest need.

Kay said the letter was intended to say, “Get money in. Let’s get it to flow as fast as we possibly can, but at the same time, let’s make sure it’s used wisely and with accountability.”

The Bloomberg administration suggested that the federal package not only include direct aid to cities but also look for other ways to provide aid, including lifting certain requirements on federal programs such as the Community Development Block Grant (CDBG).

Currently, those funds can be used only to pay for new programs or for existing services that are being significantly increased. If those restrictions were waived, Daly said, local governments could use CDBG funds to support existing city services that would otherwise be cut as cities nationwide look to slim their budgets.

In New York City, Bloomberg has slashed spending, cut jobs and raised taxes as he tries to bridge budget gaps. He also has hinted at even more tax hikes and will present a new budget plan later this month.

The letter also suggests allowing cities to lower debt costs through refinancing.

Currently, municipalities are limited to one advance refunding and cannot benefit from lower rates over time. Another refunding would let cities lower their debt service costs; New York City got a temporary authorization to do this after the Sept. 11, 2001, terrorist attack on the World Trade Center.

Bloomberg also wants more aid for job training and placement programs, an expansion of unemployment insurance, more money for food stamps and more tax credits for low-income workers.

Within the economic recovery plan, Obama has said he wants to target projects that are “shovel ready,’’ meaning design and permitting are complete and work is ready to launch within 90 to 120 days.

Bloomberg’s note to the delegation said the city has identified more than $5 billion in projects that could be ready to go quickly, including work on the Brooklyn Bridge, a new police precinct facility in Staten Island and new boilers in schools.

The letter warned that the city’s capital program is already being stretched, with some projects in danger of being delayed indefinitely if economic conditions worsen.