The Streets Were Paved with Gold - Ken Auletta [123]
Four months later, now under contract to the city, Fantus prepared another report, suddenly discovering some of the “locational advantages” of the city: “(1) New York is the cosmopolitan metropolis of the United States; (2) Every service needed by modern, sophisticated business is readily available; and (3) Operating costs are competitive.” Comparing all costs, they said a foreign firm would find it less expensive to do business in New York than in Los Angeles. The city’s labor costs, for instance, are now more competitive. In 1976, according to the U.S. Department of Labor, city manufacturing workers earned less than the U.S. average. And there are other indications of New York’s changing economic climate. The city is phasing out the stock transfer tax, has reduced its occupancy tax and promised to cap real-estate taxes. Governor Carey, in 1978, proposed and won agreement for a $750 million reduction in state taxes. State commerce Commissioner John Dyson, an outspoken business advocate, set aside state monies to promote tourism. The state legislature expanded the tax and land incentives local governments may offer business. The business community is much more visibly involved in the government of the city, as they have traditionally been in other cities. Ironically, the most compelling arguments against Abe Beame’s reelection were made not by his opponents but by his own business or establishment-dominated commissions, particularly the Temporary commission on City Finances and his Management Advisory Board.
No doubt, New York’s economy and climate are healthier as I write this in 1978 than they have been since 1969. Still, New York remains more aberrant than Big Apple bombast cares to admit. Fortress Manhattan is not New York City.
Government Costs
New York City’s government is—and is not—unique. Unlike many growing cities, New York cannot replenish its tax base by annexing its wealthier suburbs. Thomas Muller of the Urban Institute finds: “Among cities experiencing population growth in the 1960’s, all but four—Atlanta, Miami, Norfolk, and Yonkers, a suburb of New York City—annexed sizable areas.” And all but three of America’s growing cities were located in the South or West. Thirteen of these larger cities, he found, increased their combined boundaries by 46 percent.
Where New York stands alone is in the cost of its government. Not just the total cost—the $14 billion 1978 budget surpasses all states but California—but the average cost per citizen. Quoting 1974 Census figures, the Governor’s Special Task Force on Taxation said New York City spent $1,382 per person for local government. The average in the next twenty-six largest cities was $726, or almost half New York’s. Neighboring Nassau County spent $330 less per person than New York. Pushing aside its uniquely high debt costs, the city spends more partly because it provides a wider range of services than any other city in America, and also because its state or county government assumes proportionately less of the city’s costs, particularly for functions like welfare and Medicaid. In comparing cities, there are two types of functions to consider: variable functions, which include welfare, health, housing and higher education supplements, and common functions, which cover such basic services as police, fire, sanitation and public school education. New York, over the years, has come to define a variable as a basic service. “New York City’s per capita expenditures for variable functions are far out of line compared to other large city governments in the United States,” the Eighth Interim Report of the Temporary Commission on City Finances discovered. In the 1974 fiscal year, the city spent $1,076 per person for variable functions. Washington, D.C., actually spent more ($1,326), but that city has no state government to share its costs. Next came Baltimore ($584), Boston ($582) and San Francisco ($506). In sixth place was Denver, spending less than 30 percent ($298) of the New York total.
No other city