Meet Bloomberg’s Budget Aristocrat

To see Mark Page testify at a City Council finance hearing is a bit like watching a standoffish professor defend an academic paper to a panel of overconfident college first-years.

Some questions to the city’s budget director are well informed and intelligent. Others are asked as if they are.

Throughout these hours-long appearances on the city’s budget proposals, Mr. Page sits and sometimes squirms in his leather chair as he delivers assertive, thorough, long-winded responses and retorts, often with some exasperation in his voice. Occasionally, he lets out a sigh before he speaks.

“Your premise that the world ends on June 30, 2009, I don’t think is realistic,” Mr. Page said to one question on why the city was proceeding with a tax increase now. He speaks with candor, sometimes, reluctantly, making news, as he did last week when he contradicted the mayor in admitting under questioning that the city could not, legally, withhold the city’s $400 homeowner rebate checks without approval from the Council.

He has little patience for what he sees as the inability of politicians to see beyond a short-term calculus. In a recent phone interview, he explained the incongruity between the perspective of the Council and his Office of Management and Budget on budget issues. “There’s an inherent tension between what we do and each council member does,” he said. “They tend to be very focused on the importance of the individual service that they happen to be looking at a given instance.

“And our job at this business is to try to keep the whole working-it’s the sum of the parts, guys-and that’s not always the most easily absorbed point of view for the individual council members.”

With the disintegration of the financial sector, the main pillar of the local economy, there’s going to be a awful lot of diminished parts. Even if property taxes are raised and the rebate is withheld, as the mayor and Mr. Page want, the city is projected to face a gap of $1.3 billion for the fiscal year that starts next July (for context, a citywide hike in the property tax of 7 percent is projected to bring in about $1.2 billion a year). The year after that, the gap soars to $5 billion, and $4.9 billion the year after; both years assume that revenues start rising again.

These gaps put Mr. Page, the erudite, often dour, 60-year-old custodian of the city’s budget, in a powerful (if unenviable) position within the Bloomberg administration. While major policy decisions are ultimately made by the mayor on budget matters, Mr. Page is responsible for creating a cocktail of cuts and tax increases, then working to sell whatever plan emerges to the Council, which duly fights it.

The severity of the financial crisis will likely be enough to devour the billions of dollars amassed from years of surpluses that Mr. Page and the mayor successfully stowed away into a sort of rainy-day fund. This year, $3.5 billion of that fund is expected to be used should the Council approve a mayoral budget modification; for the fiscal year that starts in July, another $4.1 billion from past surpluses will likely be used, leaving just $350 million for future years.

On paper, Mr. Page is something of an anti-Bloomberg. In contrast to the self-made Jewish media mogul from working-class Boston, Mr. Page comes from old wealth. His great grandfather on his mother’s side was none other than J. P. Morgan, and his father, Walter Page, ran the firm J. P. Morgan in the 1970s. Unlike the CEO mayor, who exalts the private sector and has done his best to mold city government in its image, Mr. Page is, by choice, a career bureaucrat.

This year marks the start of his fourth decade working in the OMB, and now at its head for the past seven years, he is the longest-serving budget director since at least the Lindsay administration. He was the agency’s counsel from 1978 until he was promoted to director in 2002, a long tenure during which he helped craft most every financing structure made by the city since it dragged itself up from financial ruin.

What he and the mayor share is an affection for municipal finance-Mr. Bloomberg seems particularly in his element when he delivers to reporters a PowerPoint on the annual budget, a slideshow that the mayor personally edits-although the contexts in which they come at the budget are quite different.

The mayor approaches budgetary decisions weighing a set of competing needs including approval ratings, the feelings of the Council and his legacy as a fiscal steward. Not so Mr. Page.

“He’s clearly not on an ego trip-he doesn’t want to get out there and be the darling of the press,” said John Cape, the state budget director under Governor Pataki who dealt with Mr. Page in city and state budget skirmishes (with almost always no hard feelings at their conclusion, he noted). “He really is a practitioner. He’s a scholar of New York City history, finances and politics, and he just wants to have people sort of leave him alone and do his job.”

He is, for all his anti-political instincts, a team player. For example, he had initially expressed strong reservations about the complex, multibillion-dollar financing structure planned for the redevelopment of Manhattan’s far West Side as part of the city’s Olympic bid, according to several people familiar with discussions at the time, but in the end went along and helped sell the plan to the public and the financing world.

He also can be stubborn when he believes he is right, and transparently impatient.

Last summer, Mr. Page was testifying on the city’s proposed budget for the year when Councilman Robert Jackson, chairman of the Council’s Education Committee, asked him about school funding, and interrupted the budget director’s responses with more questions and declarations.

“If you’d like to make speeches, which clearly you do, then clearly you are not interested in what I have to say,” Mr. Page fired back at Mr. Jackson.

Councilman David Weprin, who as chairman of the Finance Committee takes testimony from Mr. Page every few months, said the budget director is refreshingly open when he comes before his committee.

“He’s probably one of the most candid commissioners or agency heads that’s ever appeared before me on Finance,” Mr. Weprin said. “Almost everybody else comes in with a prepared speech, detailed testimony-you can be sure it was vetted by the mayor’s office many times. He comes in there without any prepared statement.”

But beyond just the public interactions with the Council, the budgeting process can be a frustrating one given that the structure of legislatures anywhere-where members are more closely connected with constituents and home districts than the executive-makes them far better at growing budgets in flush times than exerting fiscal discipline. In an ideal world, budget directors tend to want to even out the sine wave of public spending, where budgets swell in booms and shrink in busts, just when city services are in their highest demand. So why, despite a general attitude of fiscal prudence, did city expenditures grow more than 20 percent faster than inflation since Mr. Bloomberg came to office? Mr. Page’s response to this question, posed by Councilman David Yassky at the hearing last week, was a simple one.

“These budgets have been negotiated with some intensity between the administration and this body, and I think that the spending that has been authorized, other than amounts for benefits, debt service and so forth, which are not immediately controllable-the reason the money’s been there is that people wanted it.” (Even as Mr. Page does battle with the Council for the administration’s perceived parsimony, he, and the mayor, have received much criticism from budget watchdog groups like the Citizens Budget Commission and the Manhattan Institute for what they say is a failure to restrain the rapid growth in spending on pensions, benefits and debt payments.)

In the interview, he elaborated on the theme of stern guardians of the city’s treasure struggling to stand firm against an insatiable public demand for expenditure.

“There’s a basic model in government resources, which is that people would always like you to spend more and take less,” he said. “Nobody likes to pay more taxes and everybody likes to get better services, and frankly that’s true in boom periods, and that’s true in down periods, and one of the things that I think OMB is trying to do, and this mayor is certainly trying to do, is to try to give people the best bang for the buck we can.”

For a time, Mr. Page’s job may get easier in at least one respect. Budget directors tend to be at their strongest in recessions as “no” becomes a more irrefutable answer, and the public, elected officials and agency heads can better appreciate the rationale behind cuts and new taxes.

Should current estimates hold or prove optimistic, the fiscal strength of the city stands to deteriorate badly over the next three years, and major cuts and new taxes are sure to be needed. The mayor has already opened the door to an increase in the personal income tax and perhaps the sales tax, though both of those require approval in Albany, which could be levying new taxes of its own this spring given the enormous budget gaps in the state budget. Funding cuts from the state seem likely as well.

“I would suspect that we’re still on the way down at the moment,” Mr. Page said. “When that’s going to turn, I would dearly love to know, quite frankly.”

Meet Bloomberg’s Budget Aristocrat