NYC spending makes some nervous
The Manhattan skyline at night
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Kai Ryssdal: New York, like plenty of other states, is knee-deep, or worse, in a fiscal crisis. Tax revenues are down. It's having trouble meeting obligations. And it's cutting services to stay solvent.
Albany is also off-loading any drain on its finances that it can, including, lately, its share of the budget for Governors Island. The park off Lower Manhattan was supposed to be jointly managed by the state and New York City. Now, though, the city has stepped up to take over the Albany's share, even though it's not so well off either.
Marketplace's Alisa Roth explains how.
ALISA ROTH: The fiscal situation today is the exact opposite of what it was in the 1970s. In those days, the state had to help the city. Now the city's helping the state.
Ray Horton is a professor of political economy at Columbia's business school. He says there's a simple reason New York City has the money when the state doesn't.
RAY HORTON: The city officials have managed the budget a lot better than state officials have managed their budget.
And how it's managed is key: New York City isn't rolling in money any more than the state is.
Carol Kellerman is president of the Citizens Budget Commission, a non-profit watchdog group. She says the city can afford to take on the state's responsibilities because it's saved and scrimped carefully.
CAROL KELLERMAN: Part of the reason we're doing relatively well is because the mayor has ordered periodically reductions across the board in all city agencies. And he's asked his commissioners to make cuts.
Mayor Bloomberg been trying to get control of Governors Island for years. And this is a cheap way to do it. He got a similar bargain on another park last month.
But Kellerman says all this spending is making some people nervous.
KELLERMAN: We shouldn't be taking on additional expenses that the taxpayers are going to have to cover when at this point we're really cutting to the bone agencies because our tax revenues aren't keeping up with the cost.
The city plans to use private development to help pay the park's operating costs. And Columbia's Horton says in the long-run anyway, new parks can help the bottom line.
In New York, I'm Alisa Roth for Marketplace.