John Liu Gives His State of the City Address

Comptroller John Liu didn’t let the fundraising scandal that has dampened his mayoral ambitions stop him from outlining a sweeping

John Liu

Comptroller John Liu didn’t let the fundraising scandal that has dampened his mayoral ambitions stop him from outlining a sweeping vision for the economic future of the five boroughs in a State of the City address today at City College. After giving a “shout out” to Knicks sensation Jeremy Lin, Mr. Liu explained why the city economy is in a precarious position and unveiled his plans to improve New York’s financial outlook.

“Today, more than 250,000 new yorkers languish in unemployment. That is more than twice the number of unemployed this city had a few years ago,” Mr. Liu said in a prepared version of his speech that was distributed at the event. “Is it any wonder that people occupy parks clamoring for a better economic plan, when they are left jobless year after year?”

Mr. Liu’s proposals included plans to cut waste, reform the city pension fund, implement a progressive personal implement tax and draw educational institutions to New York.

Before Mr. Liu took the stage, the audience was treated to a series of elaborate entertainments including a traditional Chinese lion dance and a full gospel choir. Despite the fanfare, there was a dark shadow cast over the proceedings after one of Mr. Liu’s supporters, Xing Wu “Oliver” Pan, was indicted yesterday for allegedly funneling $16,000 in illegal contributions to Mr. Liu’s campaign. News of the scandal first emerged in November, but Mr. Pan’s indictment thrust it back into the spotlight.

Apart from a brief joke about how he’d like to get better media coverage, Mr. Liu made no mention of the fundraising flap. He began his speech with an overview of the city’s finances.

“While we can all be proud and grateful that the city’s economy rebounded from the financial crisis far better than anyone expected, we are not out of the woods yet,” Mr. Liu said. “In the second half of 2011, we lost more than 12,000 private sector jobs. Just a year ago, the City’s unemployment rate was well below the national average. By the end of 2011, it was higher by half a percent.”

Mr. Liu said a bad year on Wall Street was largely to blame for “the city’s lost economic momentum.”

“2011 was the worst for Wall Street since the collapse of 2008, and employment in the industry has slipped by some 5,000 jobs since early last year,” he said.

Mr. Liu said the failure of Congress’ debt reduction supercommittee and the resulting $1.2 million in automatic federal budget cuts could pose a “risk” to New York in the coming years.

“There is risk to our economic health from Washington’s actions, or lack thereof. Looming at the end of this year are $1.2 trillion in automatic federal budget cuts, scheduled to take effect because some in Congress refused to make the tough choices needed for deficit reduction,” Mr. Liu said.

Though he believes the federal cuts could take a toll on New York’s economy, Mr. Liu identified a European debt crisis as “the most significant risk to the city’s economy this year.”

“My economists have long warned that a meltdown of the Euro Zone could cause pandemonium in financial markets and lead to a severe worldwide recession. We trust that Europe’s leaders will prevent this from happening, but even a mild European recession and continued stress on European banks will have adverse repercussions here in New York,” Mr. Liu said. “The reality is that Europe’s banks are New York City’s banks. European banks have more than a trillion dollars of assets in their New York City offices. They own or lease more than 8.5 million square feet of office space and they employ approximately 45,000 people in New York City.”

Without these “catastrophes in Europe or in Washington,” Mr. Liu said his office projects “slow but somewhat steady” growth for New York in the next couple of years.

“Given that our city continues to face these budgetary fiscal challenges, my top priority continues to be cutting waste,” Mr. Liu said.

Mr. Liu described several plans aimed at eliminating waste in city spending including; increased scrutiny of city contracts, public town hall meetings to get ideas about where to look for waste, audits of the city treasury and training for “almost 500 auditors and investigators.” He also vowed to “establish a waste hotline, 212-NO-WASTE” and a pair of websites; one “where city employees contractors and members of the public can report waste” and another that will allow readers to track city spending. Mr. Liu also said he would call for the implementation of an information technology dashboard “to rein in runaway IT costs” and “a new system to track government subcontracting”

In addition to his plans for cutting waste, Mr. Liu discussed several ideas for “expanding opportunities and creating jobs” in New York. SInce Mayor Bloomberg’s proposed budget calls for borrowing substantial amounts of money over the next four years. Mr. Liu suggested borrowing “some of it sooner” while “interest rates are at historic lows.” He said the city should “identify $2 billion of spending on construction projects that could be accelerated and developed over the next two years” and double the amount of economically-targeted investments held by the city pension fund.

Mr. Liu also proposed reforming the pension fund, although his idea is quite different from the plans to cut pensions advocated by Mayor Michael Bloomberg and Governor Andrew Cuomo.

“The discussion of pensions today is remarkably one-sided and short-sighted,” Mr. Liu said. “It seems to be all about cost with no consideration of need. worse yet, the scapegoating of public employees seems to be relentless.”

Mr. Liu called for a pension reform plan designed with New School professor Dr. Teresa Ghilarducci that would “have the same staff that manages the New York City pension funds oversee a fund for private workers” that “would leverage the expertise of the Asset Management Bureau” usine money “provided–not by taxpayers–but by participating employers and their employees.”

Along with changing the pension fund, Mr. Liu wants to establish a “progressive personal income tax system in New York City” that would “cut personal incomes on joint filers with incomes below $500,000.”

“Filers earning over half a million dollars per year would pay a nominal additional amount,” Mr. Liu said.

Lastly, Mr. Liu praised the grant that brought the Cornell-Technion campus to New York and called for the creation of an office to attract more institutes of higher learning to the city.

“Currently, we have a Mayor’s Office of Film, Theatre and Broadcasting. Let’s establish a Mayor;’s Office of Colleges & Universities, that would market the city to educational institutions and make it easier for them to open up shop here, or partner with out terrific CUNY colleges,” Mr. Liu said. “As our city’s chief financial officer, I am often asked for stock picks. My response is always the same–education is the best long-term economic investment.”

John Liu Gives His State of the City Address