What was the New York City Council concerned about in early January of 2002, when a municipal budget crisis loomed, the economy foundered, and downtown residents and workers still struggled to get back to normalcy four months after the terrorist attacks?
The art on the walls.
Yup, art: no sooner was former Black Panther Charles Barron sworn in as one of 38 new council members than he announced that high on his agenda would be ensuring that the portraits of famous figures in municipal buildings depicted more people of color. Barron was echoing the sentiments of a council colleague, Philip Reed, who had complained, When I look at the pictures, the first thing that strikes me is how few women there are. Such concerns, explained incoming councilman Al Vann, exemplified the new spirit of the new council, which wasted the next few weeks trying to get a painting of the citys first black mayor, David Dinkins, hung in a prominent place in the council chambers.
The agitation over art set the keynote for New Yorks new and zany city council. Largely created by a term-limits law that forced many veterans to step down to make room for newcomers, the current council has been by turns comic and trivial, inflammatory and divisive, and almost always destructive. With a veto-proof majority in its Democratic caucus, the council has proven as unfriendly to business as it is unsympathetic to taxpayers. And it is just getting up to speed: after stumbling around for its first six months, trying to figure out the legislative process, the council has started to pump out a wide array of legislation aimed at rolling back many of the Giuliani-era reforms that uplifted the city during the 1990s. While much of Gothams attention has focused on rookie mayor Michael Bloombergs shaky start, perhaps nothing so threatens the future of New York as a radicalized city council free to work its will without restraint.
The new city council is the unintended consequence of two policy changes that at first seemed harmless. In 1989, a court decision forced Gotham to dismantle the Board of Estimate, the body that previously held much of the power over city budget and land issues, and invest more power in the city council. What had until then been a nearly irrelevant legislatureonce described by former parks commissioner Henry Stern as not even a rubber stamp, because a stamp at least leaves an impressionsuddenly moved to the center of the citys decision-making process. As the councils power began to grow in the early 1990s, a circle of outer-borough members representing middle-income districts, led by Majority Leader Peter Vallone, determined to chart a fiscally restrained course on taxes and spending, and the council that emerged under charter reform steered clear of embarrassing imbroglios, at least most of the time.
But the landscape changed radically when New Yorkers adopted a second innovation: in a 1993 referendum, they approved term limits that would force a majority of incumbent council members to step down in 2001. For years up until 2001, the character of New York politics had been slowly evolving, as the old neighborhood political clubs and borough organizations that had produced many candidates disappeared or waned in power, replaced by municipal worker unions, social services organizations, and powerful community-based housing and economic development groups, all dependent on government funding. Increasingly, these organizations, which mobilize their clients as voters and their members as campaign workers, cultivated and supported candidates who favored bigger government, more spending on social programs, and higher taxes. Their task was easy, since the citys all-but-defunct Republican Party fielded no candidates in many neighborhoodseven in districts that voted heavily for Republicans like Giuliani and Governor Pataki. Over time, the citys Democratic primaries, whose voters are more liberal than general-election voters, became the de facto elections in many districts.
The evolution became a revolution in November 2001, when political activists scored big victories in city council elections, changing the councils ideological character overnight. Almost a third of the winners ran with endorsements from the extremist Working Families Party, an essentially socialist third-party founded by organizers from left-wing unions and radical community groups like ACORN, for whom New Yorks liberal Democratic Party was too conservative (see ACORNs Nutty Regime for Cities). More than 60 percent of the new councilmen had backgrounds in government, social services, or community activismpeople like Gale Brewer, once chief of staff to former left-wing Manhattan borough president Ruth Messinger, or Robert Jackson of the New York State Public Employees Federation. Higher-profile new councilmen of the same stamp include Al Vann, notorious for heading the racist African-American Teachers Association in the 1960s, when it clashed with white teachers during the Ocean HillBrownsville school decentralization crisis; Bill de Blasio, Hillary Clintons 2000 campaign manager; and Eric Gioia, Al Gores New York campaign manager in 2000.
A startling example of the councils leftward drift is its newest finance committee chair, David Weprin, a former municipal-finance banker whose experience on Wall Street and as a corporate lawyer seems not to jibe with his tax-and-spend politics. Weprin, who represents middle-income neighborhoods in Queens, is a bundle of contradictions only possible in New York. He fits the profile of the classic moderate New York Democrat, like his predecessor, Herb Berman, who frequently fought to keep a lid on taxes in the city. But Weprin, the son of former State Assembly leader Saul Weprin, ran with the support of the Working Families Party and hasnt disappointed them. He was among the first councilmen to push for tax hikeseven castigating Mayor Bloomberg for not proposing more tax increases in his first budget. He has offered a raft of his own new taxes, including a surcharge on wealthy New Yorkers. Nor does Weprin support President Bushs proposed dividend tax cutwhich would boost the citys securities industry and thereby bolster the municipal budgetbecause he would rather see direct assistance from Washington to New York. This is a rather startling position for someone who once served as chairman of the Securities Industry Association, Wall Streets most powerful lobbying group, which strongly supports the dividend tax cut. But its typical for the political culture of New York, which shows more interest in handouts from the state and federal governments than in cultivating budgetary self-reliance and private-sector job growth in Gotham.
Worsening the problem with the new council is that Majority Leader Gifford Miller has changed the way the body runs, setting in place a laissez-faire regime that has unleashed the most extreme elements. A young Upper East Sider with big political ambitions, Miller leaves no doubt where he stands on the ideological spectrum: he was inspired to enter politics by Bill Clintons election, he saysa relief to him after the Age of Reagan. I was no fan of Reagan, Miller pronounced to the New York Times Magazine. There is a certain politics of greed that I reject. Miller went to work for Upper East Side congresswoman Carolyn Maloneyamong the most left of the citys congressional delegationand then won election to the city council seat vacated when Republican Andrew Eristoff joined the Giuliani administration.
To win the speakers job, Miller had to promise to depart from the way the council operated under Vallone, who tightly controlled its agenda and its members. After the November 2001 elections, several newly elected councilmen who dubbed themselves the Fresh Democracy Council demanded more power for council committees to set their own platforms and more freedom for individual members to push their interests. Seeking their support, Miller declared, The next speaker needs to be the type of leader who brings more empowerment to council members and forms a team which represents meaningful consultation.
And who was Miller empowering when he reached out to Fresh Democracy? One of those instrumental in the group was exBlack Panther Barron, who has emerged as an agent provocateur of the new council, especially on racial matters, using his perch to promote an increasingly angry and divisive agenda, usually with barely a word of dissent from his colleagues. Millers governing style empowers Barrons antics. As Barron himself says in praise of Millers rule: I am able to be as radicalto be black as I want to be.
Just a few months after taking office, Barron garnered headlines by telling a rally on slavery reparations that sometimes he felt he wanted to slap a white person for the sake of his own mental health. A soft-spoken man whose grandfatherly tone often belies the venom of his message, Barron embarrassed the city further when he threw a council reception for Zimbabwean tyrant Robert Mugabe. As chair of the councils committee on higher education, a juicy assignment Speaker Miller handed him, Barron held a hearing tinged with racist overtones on Governor Patakis proposed tuition hikes at CUNY. We used to have free tuition, Barron declared. Then, when the complexion of the university changed, we had tuition. He sat respectfully, along with a host of equally encouraging council members, as students testifying before his committee made increasingly hysterical and inflammatory remarks, with one student at Medgar Evers declaring that the tuition increases were a calculated effort to prevent people like me or other brown-skin people from getting an education.
While Barrons antics have gotten headlines, the quiet machinations of the rest of the new council have been much more destructive. With unions and activists setting its agenda, the new council is virulently anti-business, threatening the economic future of the city. Bills the council has already passed have worsened the business climate in what is already one of the countrys most heavily taxed, heavily regulated citiesa city still struggling to recover from a severe downturn in its Number One industry and a terrorist attack on its Number Two business district.
Taking its orders from the Working Families Partyand especially from ACORN, the radical community organizer with a comprehensive socialist agendathe council quickly passed a living-wage bill, setting a new minimum wage more than $3 above the federal minimum for many private companies that do business with the city. The debate over the living wage produced the kind of tortured logic now typical of the council. Members argued, bizarrely, that the bill would actually improve the citys economy by providing higher wages, ignoring numerous studies by economists across the ideological spectrum that show that hiking the minimum wage so dramatically destroys low-wage jobs, harming those whom the bill aims to protect. As debate over the living wage made painfully clear, many councilmen dont begin to understand how the free-market economy generates wealth in the city. For instance, Wall Street veteran Weprin, who should know better, argued that the council had to enact a living-wage bill to ensure that low-wage workers had enough money to pay for a property-tax increase the council had recently approved, as if the city council could simply ordain that the private sector in New York generate more wages for workers to use in paying higher taxes.
Even though New York City now has 50,000 workers under living-wage legislation, more than any other U.S. city, living-wage supporters are not satisfied. When the council reduced the bills scope in response to Bloomberg administration complaints that the original legislation would cost city hall itself $100 million annually, the sponsors vowed to seek a wider law later on. Were going to come back with a bigger net, said Deputy Majority Leader Bill Perkins.
The new council seems intent on doing the bidding of its most radical union supporters through the narrowest special-interest legislation. At the same time that the council sent the mayor the living-wage legislation, to take only one further example, it also passed a bill that forces the buyer of a new building to keep the previous maintenance and security staff employed for up to 90 days and then provide written evaluations of each employee. To fire workers, the owner must then go through an arduous arbitration process. Although the council claims it was trying to create stability in the workforce, the legislation is an unprecedented intrusion on employer-employee relations and was a direct gift to the powerful local union that represents building workersand that pushed for the law. The law allows unionized buildings to opt out of the burdensome employee retention and evaluation process, a clear incentive for the new owner to unionize the workforce rather than deal with the consequences of the legislation. The old city council certainly had union interests at heart, says Joseph Strasburg, formerly Peter Vallones chief of staff and now president of the Rent Stabilization Association, a landlord groupbut at least the old council wasnt a wholly owned subsidiary of the unions.
The displaced-worker bill shows the council at its most cynical. When the Bloomberg administration objected that the original bill could cost the city millions of dollars, presumably in administrative and compliance costs, the council simply changed the legislation to exclude city-owned buildings. But in its report on the legislation, the council nevertheless asserted, in clear contradiction to this action, that the bill would add no significant costs to the private sector.
Other council legislation makes clear that the members care little for the long-term effects of their measures, so long as they can claim short-term victories. These members will be gone in eight years, says Strasburg of the Rent Stabilization Association, so they dont seem worried that they will have to deal with the consequences of their actions. One example of how term limits have shortened the bodys time horizon is a bill that targets predatory lenders. On its surface, the bill seems like a worthwhile effort to curb abusive practices among lending companies that charge excessive fees on mortgages and home equity loans to poor, inner-city residents, or that make the loans expecting to seize the homes when borrowers fall behind in payments. But the council law, stricter than any other in the nation, contains a number of provisions that threaten to dry up capital for all high-interest loans, most of which represent legitimate lending to people with poor credit.
The law targets financial institutions that purchase mortgages in bulk from lending companies and package them into securities, a practice that provides an essential stream of capital to the mortgage market. The New York City law makes these financial institutions liable if any genuinely predatory loans (as opposed to merely high-interest loans) wind up as part of their portfolios, even though these institutions have no way of knowing what transpires between a borrower and lender, or whether the lender complied with all laws in making the loan. The law attempts to punish these mortgage packagers by barring them from doing business with New York City government, a hefty price to pay for those financial institutions that New York uses as bond underwriters and pension fund managers. Financial industry experts have warned that, rather than lose that lucrative business, some big firms may get out of the market of buying up loans, depriving lenders of capital to make fresh loans to the 90-plus percent of struggling high-credit-risk borrowers who ultimately succeed in repaying their mortgages.
These bills, favorites of activists and union groups, went nowhere in the previous council. That they have now become law has spurred activists to resurrect a host of more damaging legislation. They have already proposed bills that would impose commercial rent controla move that could devastate the commercial market in the city in the same way that more than 50 years of residential rent control has constricted the citys housing stock. Other bills would force government contractors to ensure that at least half of their workforce on municipal jobs reside in the five boroughs; would make landlords more vulnerable to lawsuits over lead poisoning, even though the citys lead-poisoning emergency is long past; would ban companies that profited in any way from slavery more than 150 years ago from doing business with the city today; and would resurrect the citys affirmative-action contracting program, which gives a 10 percent price advantage to minority firms in competitive bidding, at a time of huge budget deficits, even though the 1990s witnessed unprecedented growth in the citys minority business community without any such contracting program in place. (See Minority Business Triumphs in Gotham, Spring 2002.)
A council so cavalier about the citys business environment is also a council intent on pumping up the citys already high tax rates to finance its members many schemes. When Mayor Bloomberg was briefly trying to hold the line against new taxes, nearly half the councilmen signed on to an agendaessentially drafted by the Working Families Partythat called for a wide array of new taxes, including reestablishing a tax on stock transactions at a time when Wall Street was already in a deep recession. The council has also called for a personal income-tax surcharge on wealthy individuals, to finance increases in the Board of Educations $12 billion budget. When the mayor then proposed a property-tax increase, the council approved it in just a few days, with no public hearings. In New York City, when somebody sneezes we hold council hearings. But for the biggest tax increase in the citys history, we held no hearings, complains Queens councilman Anthony Avella, one of only three Democrats to vote against the property-tax hike.
Avella says he opposed the increase because the council jumped to close the budget gap with higher taxes, without seriously weighing spending cuts. But Avella was also one of the few Democrats in the city who faced a serious election challenge from a Republican, and he is likely to face a tough reelection, too. To punish Avellas apostasy, Speaker Miller took away his seat on one of the councils committees and justified doing so by saying that the council had to speak with a unified voice to be effectiveexactly the opposite of the position he took in giving members of the Fresh Democracy Council and other supporters free rein to pursue their agendas. (The three Republicans on the 51-member council, who all opposed the tax increases, faced similar intimidation from Mayor Bloomberg, their partys putative leader.)
Despite the councils track record, many of its most liberal members reject the notion that it is anti-business or that their constituents vehemently opposed the property-tax increases. Weprin says the council took the concerns of the business community into consideration and modified the living-wage and displaced-worker legislation accordingly. He adds that the council reduced the mayors property-tax increase to 18.5 percent from 25 percentthough the council proposed a host of other taxes too. And Leroi Comrie, representing a predominantly black Queens district with one of the highest concentrations of single-family homes in the city, argues that his constituents favored higher taxes over reduced services.
Some critics believe that, now that so much political power is concentrated in the hands of a few activist groups, many council members no longer attend meetings of local civic and homeowner associations, where there is plenty of anger about the property-tax hike. Says Corey Bearak, executive vice president of the Queens Civic Congress: Instead, they are going to meetings of these government-funded, community-based organizations, and they are hearing from these groups that they are happy the city has preserved their funding. Since these groups have inordinate power in the Democratic primaries, currying their favor remains key. City Hall is filled with lobbyists for every program imaginable, but there is no lobbyist for the middle class in New York City, laments Republican councilman Dennis Gallagher.
Of course, some council members make no pretense at all of favoring a business-friendly New York. Businessmen and taxpayers who want a glimpse of whats ahead for the city should listen to what Councilman Barron thinks about managing the citys economy. Were making the city friendlier to poor people, to working people, to people in need, he avers. Its not about greed but about need in New York now. Maybe businesses wont make as much as they used to make in New York, but theyll at least be able to make a profit. Although Wall Street profits are down from as much as $30 billion a few years ago, says Barron, firms in New York still earned $8 billion last year. I dont think there will ever be a mass exodus of business from New York, Barron told City Journal, a statement that echoes similar pronouncements by other council members and the mayor but that contradicts the experience of the last 30 years, as banking and securities jobs, especially, streamed out of the city by the hundreds of thousands.
Although the council has its greatest impact on budgetary matters, new members are now trying to radicalize a wide range of issues, from policing to social programs. The common theme of these efforts: working to undermine many of the Giuliani-administration reforms that played such a big part in saving the city. One target of about a dozen council members, led by Barron and Deputy Majority Leader Perkins, is the New York Police Department. A series of bills introduced by these councilmen would strengthen the civilian complaint review board and give it the power to prosecute police officers. Another bill would ban racial or ethnic profiling by the police department, even though there is no evidence that the NYPD has ever engaged in either (see The Myth of Racial Profiling, Spring 2001). The bill, with 13 sponsors, does little to define these contentious terms and could open up police to unending lawsuits and prosecutions.
Similarly, the council has the Giuliani administrations welfare reforms in its sights. A proposed law would weaken the citys welfare-to-work program, allowing recipients to substitute education or job training for work, even though these programs have conclusively proven useless at getting recipients off welfare. Under Giuliani, welfare recipients declined from more than 1 million to under 500,000, in large part thanks to the welfare-to-work strategies that the council would subvert.
For good measure, the council seems intent on preventing some future Giuliani-style mayor, elected with strong support from the citys moderate voting blocs, from wielding as much power as Giuliani did. A proposed law, sponsored by nearly half the current council, would amend the city charter to give the council veto power over most mayoral appointments, including all city commissioners. Such a law would allow a council increasingly filled with public-sector-oriented members to frustrate the designs of any mayor who was not its political ally.
When not preoccupied with playing the anti-Giuliani, the council regularly steps in to matters concerning which it has neither power nor expertise. Councilmen have sparred over resolutions about Middle East policy, for instance. Members have passed a resolution condemning President Bush and the Republicans for not expanding health-care benefits, andlike the legislatures of other left-of-center municipalities around Americahave passed a resolution opposing war with Iraq, with one sponsor of the resolution, Robert Jackson, complaining that the measure took so long to approve because of opposition from New Yorks Jews. Under Millers and de Blasios urging, the council has predictably filed a friend-of-the-court brief supporting the University of Michigans affirmative-action policies.
All these antics could have political ramifications for years to come, because the council serves as the local political minor leagues, preparing candidates for higher office in New York. Speaker Miller has mayoral ambitions and may challenge Bloomberg in 2005: he would be the most left-wing mayor in the city in 40 years, except perhaps David Dinkins. Other council members, including Barron and Perkins, are already eyeing a spot in the citys congressional delegation, since members from their districts may well retire soon. Councilmen also often become public advocate or comptroller, stepping-stones to still higher office.
Nothing on the horizon promises to moderate the councils growing extremism any time soon, unless the business owners, moderate and conservative politicians, and civic groups who have an interest in sensible and restrained government band together to change the councils makeup. But these groups often work against one another. To forestall property-tax increases, for instance, some homeowner groups recommended higher business taxes. Business organizations, meanwhile, often wont support Republican or moderate Democratic candidates, because they believe they have little chance of winningthereby creating a self-fulfilling prophecy. Even now, business groups alarmed by the councils leftward march are trying to assert their influence by donating more heavily to incumbents, a move that will only make those incumbents stronger. Miller has already made the obligatory appearances before groups like the Association for a Better New Yorkwhere he offered bromides about keeping New York business-friendly while doing the exact oppositeand he is shoveling in big contributions from business groups. Leaders of several business organizations told City Journal that they would not criticize the new council on the record, because they have matters before the members.
Separately, none of these constituencies can master the forces that term limits unleashed on New York politics. But collectively, they might jolt some sense into the councils increasingly self-destructive policies. If they dont hang together, they will hang separately, as the city experiences a torrent of anti-business, anti-taxpayer legislation that will damage it for years to come.
Research for this article was supported by the Brunie Fund for New York Journalism.