Tax Breaks Won’t Help, Public Investment Will

December 12, 2001. An op ed in the New York Daily News on the rebuilding of Lower Manhattan, by David Dyssegaard Kallick and James Parrott.

The newly appointed Lower Manhattan Redevelopment Corp. will meet for the first time next week. When it does, it needs to begin work, in an open process, on a plan to increase the attractiveness of lower Manhattan through public investments, not tax incentives.

Before the mayoral election, politicians and establishment leaders of all stripes seemed to believe the key tool was providing tax incentives to lure companies back.

All that may change with hardheaded businessman Michael Bloomberg in office. “Any company that makes a decision as to where they are going to be based on the tax rate,” he said recently, “is a company that won’t be around very long.”

Incentives just hand city money to private business, according to Bloomberg, who after being elected mayor turned down a $14 million subsidy that Bloomberg LP had lobbied to get.

He’s right. Providing tax breaks to businesses is the wrong way to make lower Manhattan attractive. Almost any place in the world can provide cheaper real estate. What other locations can’t beat is the value of being downtown, so the city’s effort should focus on increasing that value.

No other location has the prestige, economic and cultural excitement, specialized pool of talent and opportunities for interaction among people in related industries.

But the city can do plenty to enhance these advantages. In replacing the area’s damaged infrastructure, for example, it could put lower Manhattan at the hub of a greatly upgraded regional system of public transportation. There is talk already of major improvements in transit links to Brooklyn, Queens and the suburbs in all directions, with many creative ideas that are worth exploring.

We should also make sure lower Manhattan and the areas with nearby transit links have excellent public schools, high-quality child care and a wide array of affordable housing. And we should continue the trend of recent years toward an increasing number of attractions — restaurants, festivals, public spaces — that make lower Manhattan a vibrant center seven days a week.

Now is also the right time to aim for slightly lower density. The businesses that benefit most from being downtown will be drawn there. But some offices came to the area at a time when rents were cheap or before technology allowed back offices to be separate from main offices. These operations can be helped to locate in other parts of the city.

As with Times Square, government can play a role in identifying sites for redevelopment that serve business needs and the public interest. There are locations in Brooklyn, Queens, the Bronx and Staten Island that could provide less expensive office space to companies and real economic benefit to neighborhoods in need, while maintaining a healthy mix of office, retail, housing, industrial and other uses — and open space.

Finally, as the number of people thrown out of work by the disaster’s ripple effects grows, recovery from the economic impact can be linked to recovery from the physical impact. Public investment in repairing and building infrastructure provides an ideal opportunity to put people to work.

Finding employment won’t be easy for many of the displaced workers in the retail, restaurant, business service, airline and hotel industries. Government should help them find new jobs, and it should fund training programs to help them develop new skills and access to careers with good wages.

Bloomberg’s blunt opposition to tax incentives is welcome. Maybe a shakeup in the city establishment will provide a real opening for New Yorkers to rethink the kind of economic future this city really needs as it recovers from Sept. 11.

Welfare Reform and Social Indicators – New York City

December 7, 2001. These fact sheets were distributed at the GULP/FPI TANF Reauthorization Forum held in New York City today. See also the summary data sheet for New York City’s five counties and the summary data sheet for Congressional districts 5-18.

County-specific data for New York City’s counties can be found on these summary sheets.
New York

Data from the Census Bureau’s 2000 Supplementary Survey for NYC Congressional Districts.
5th Congressional District – Hon. Gary L. Ackerman
6th Congressional District – Hon. Gregory W. Meeks
7th Congressional District – Hon. Joseph Crowley
8th Congressional District – Hon. Jerrold Nadler
9th Congressional District – Hon. Anthony D. Weiner
10th Congressional District – Hon. Edolphus Towns
11th Congressional District – Hon. Major R. Owens
12th Congressional District – Hon. Nydia M. Velzaquez
13th Congressional District – Hon. Vito Fossella
14th Congressional District – Hon. Carolyn B. Maloney
15th Congressional District – Hon. Charles B. Rangel
16th Congressional District – Hon. Jose E. Serrano
17th Congressional District – Hon. Eliot L. Engel
18th Congressional District – Hon. Nita M. Lowey

Economic Impact of the September 11 Terrorist Attacks and Strategies for Economic Rebirth and Resurgence

December 6, 2001. Testimony by James A. Parrott, FPI Chief Economist, before the New York State Assembly Committee on Economic Development and Committee on Small Business. Testimony >>

Preliminary Analysis: Do Tax Increases in New York City Cause a Loss of Jobs?

December 5, 2001. Moshe Adler, Oliver Cook and James Parrott presented this review of the evidence at the New York State Network for Economic Research conference for review and comment. (The analysis was published in State Tax Notes in February 2002.)

TANF Reauthorization

November 30, 2001. Comments from FPI submitted to the Administration for Children and Families, U.S. Department of Health and Human Services. Also see:

  • Welfare reform and social indicators: county-specific data (fall 2001) and NYC data (December 7, 2001). These fact sheets show (1) trends in poverty and other social and economic indicators since the advent of welfare reform and (2) changes in the use of temporary assistance, medicaid and food stamps during this period.
  • FPI presentation: TANF Reauthorization (November 2001).

These materials were used at  TANF Reauthorization forums organized around the state by FPI and the Greater Upstate Law Project [now the Empire State Justice Center].

Budget Cuts vs. Tax Increases – What’s Better for the State’s Economy?

November 6, 2001. The Center on Budget and Policy Priorities has released a new paper, Budget Cuts vs. Tax Increases at the State Level: Is One More Counter-Productive than the Other During a Recession? By Joseph Stiglitz, Professor of Economics at Columbia University and winner of the 2001 Nobel Prize in Economics, and Peter Orszag of the Brooking Institute. Read the Paper >>


World Trade Center Job Impacts Take a Heavy Toll on Low-Wage Workers

November 5, 2001. Occupational and  wage implications of job losses related to the September 11 World Trade Center attack. Report >>

Rebuilding with a Spotlight on the Poor

November 5, 2001. Comments on the Lower Manhattan Development Corporation, from the Rebuilding with a Spotlight on the Poor Coalition, c/o MFY Legal Services, Inc., 299 Broadway, 4th floor, New York, New York 10007.

We are writing on behalf of the Rebuilding with a Spotlight on the Poor Coalition to comment on your draft assistance plan for individuals. The Coalition is a broad-based coalition of Lower Manhattan community groups and citywide advocacy organizations which has come together to address the devastation caused by the September 11th attacks on the lives of working and lower-income New Yorkers, especially in Lower Manhattan and inclusive of the neighborhoods of Chinatown and the Lower East Side as well as Tribeca, Battery Park City, and residential portions of the City Hall, Seaport and Financial District. This group was formed after a December 13th conference attended by over 160 people representing at least 75 different organizations serving Lower Manhattan as well as concerned individuals. The Coalition submits the following comments on the draft assistance plan for individuals:

A. Recognition of Communities

The Draft Assistance Plan appropriately recognizes the value of stabilizing neighborhoods in Lower Manhattan. In drawing boundaries for many of these programs, the neighborhoods of Chinatown and the Lower East Side must be included. These communities suffered significant devastation as well. (One exception is the rent incentive program which is not needed north of Canal Street). Additionally, public housing residents of Lower Manhattan must be included in all benefits. They, too, have suffered. There is no logical rationale for drawing boundaries down Canal Street and Rutgers Street in the middle of Chinatown and the Lower East Side and leaving public housing excluded.

B. Housing Assistance

While we agree that “Lower Manhattan’s residential population is essential to the continued viability of the area’s business”, we strongly disagree that the fact that rental rates have been reduced represents a problem that should be addressed by public money. Nor do we agree that giving people rent incentives, regardless of their household income, to move to Lower Manhattan is necessary to maintain a residential population. What is important to the future of Manhattan is an economically, ethnically and racially diverse population. The Draft Assistance Plan itself notes that the median household income for the area closest to the attack is $125,000 per year, which is clearly not an economically diverse neighborhood. This plan does nothing to remedy that problem.

The Coalition would recommend the following modifications to the assistance plan for individuals:

1. Environmental and Health Benefits for All Downtown Residents:

It is of utmost importance that all levels of government take every step to address the serious environmental and health concerns of all Lower Manhattan residents below 14th Street. This would include environmental monitoring of both outdoor and indoor air and full and honest disclosure of health risks. Environmental cleanups must be performed where necessary and residents must be provided assistance to cleanup their apartments safely. Additionally, all residents of Lower Manhattan south of 14th Street, regardless of income or alien status, should be entitled to health care and mental health counseling to deal with issues arising out of this tragedy.

2. Financial Assistance :

The dire shortage of affordable housing in New York City and consequent increase in homelessness is well-documented and I will not repeat the numbers here. The recent increase in homelessness is also well-documented. No rebuilding plan or disaster assistance plan should ignore this crisis. The draft assistance plan for individuals does not take into account the needs for housing for low-income New Yorkers. The draft assistance plan proposes to give 1) grants to all residents of the “Immediate Impact Zone” for 30% of rent with a minimum grant of $4,000 and a maximum grant of $12,000 over a two year period and 2) grants outside of the immediate impact area for 30% of housing costs, with a minimum of $2,000 and a maximum of $6,000 over two years. While laudably the Plan states that it intends to “provide maximum benefits to lower income individuals in the area” (while ensuring that all residents get some assistance), the Plan fails to address the needs of low and moderate income residents. Specifically, we would recommend the following:

a. Raise the minimum grant levels. There are fixed costs associated with overcoming the impact of the attack such as temporary relocation, access to affordable shopping and clean up. These cost are more difficult for low- and moderate-income families to absorb because they represent a larger percentage of income and may be impossible to absorb for seniors, disabled people and other people on fixed incomes.

b. Raise the maximum grant levels to ensure that the amount of subsidy provided is sufficient to allow low income families to retain their homes.

c. Eliminate the two-year lease restriction.

d. Provide financial incentives to move into neighborhoods only in limit areas where market forces have not rebounded and only to low and moderate income people.

e. Eliminate the requirement that tenants be fully paid up in their rents and owner occupants be current in their mortgage, maintenance and taxes to get assistance. This only penalizes people who may have lost their jobs or income as a direct or indirect result of September 11th.

f. Do not exclude from assistance people currently living in subsidized housing in the affected areas which includes public housing, senior citizen housing, Section 8 housing and Mitchell-Lama housing.

3. Creation of Vibrant, Diverse Community:

At a minimum, in order to create and preserve a vibrant, economically diverse residential community, plans to assist individuals with housing needs must include the following:

a) preservation of all existing low-income and subsidized housing in Manhattan below 14th Street, such as Independence Plaza and Gateway;

b) using existing vacancies in Lower Manhattan to address the affordable housing shortage by tactics such as buying vacant apartments and leasing them at subsidized rates or obtaining additional Section 8 subsidies for low-income people who wish to move to the area;

c) recommitting the Battery Park surplus to construction of affordable housing or replacing that funding stream;

d) creation of affordable housing as part of any development plan.

C. Employment Training Assistance:

The impact on workers goes well beyond those who worked in Lower Manhattan. Many of the job losses are concentrated in low-wage industries. The Fiscal Policy Institute study of November 5, 2001 carefully details these losses. Again, rebuilding plans must take into account the needs of low-wage workers who lost their jobs directly as a result of September 11th, whether those jobs were located in Lower Manhattan or not.

Housing assistance payments should also be directed to workers unemployed as a result of September 11th, which would reduce their rental obligation to 30% of their income for the period of unemployment up to the two-year period for residents. Alternatively, the city and state agencies should aggressively seek additional Section 8 vouchers for unemployed workers.

The redevelopment of Lower Manhattan creates a unique opportunity to advance the living and working conditions of poor people. There are a variety of good ideas which have been put forth to advance the interests of all New Yorkers such as working with the unions to create apprenticeship programs, creation of publicly subsidized jobs and requiring that corporations that obtain government subsidies provide living-wage jobs and job opportunities for income people. Economic development must address specifically the needs of the poor who have lost jobs.

The proposed “employment training assistance” plan appears to be directed more towards assisting businesses than assisting individuals who need help obtaining and retaining jobs lost after September 11th and leaves open many questions.


1. Although the plan says it will “prioritize individuals affected by 9/11”, the plan sets forth no objective criteria to do this, nor does it appear to limit training to individuals who lost their jobs as a result of September 11th.

2. The plan makes no attempt to target training to low wage workers. As reported by the Fiscal Policy Institute, “many of the industries where layoffs have been concentrated are predominantly low-wage industries (“World Trade Center Job Impacts Take a Heavy Toll on Low-Wage Workers: Occupational and Wage Implications of Job Losses Related to the September 11 World Trade Center Attack,” by the Fiscal Policy Institute, November 5, 2001). This plan leaves the selection of who will get training for which jobs entirely up to the employers.

3. The plan sets no requirements that employers aided with these grants pay prevailing or living wages, commit to employ people for any period of time or otherwise make any commitments in return for the receipt of government money.

4. The plan allows for no control by the workers over the training they receive. “Eligible training” should include specialized skills training, GED and ESL courses, job readiness workshops, union apprenticeships, higher education, and other programs that will promote job growth and retention. Workers should have input into what type of training they receive.

D. Outreach

The zones encompass a large number of non-English speaking residents and a large number of non-English speaking people lost their jobs as a result of September 11th. It is imperative that the draft plan be circulated in languages in addition to English (Chinese and Spanish at a minimum) and that once the plan is in effect, efforts be made to reach out to the non-English speaking population. The Corporation must carefully evaluate how to do effective outreach in low-income communities and consider the use of existing community organizations as effective intermediaries.

We appreciate the opportunity to submit these comments and would be happy to meet with the LMDC to discuss these comments further.

Very truly yours,

Peggy Earisman, Managing Attorney at MFY Legal Services, Inc. on behalf of the Coalition

Economic Impact of the September 11 World Trade Center Attack

September 28, 2001. A preliminary report. Report >>

Welfare Reform and Social Indicators – County by County

Fall 2001. These fact sheets were prepared for the GULP/FPI TANF Reauthorization Forums in upstate New York. They present data on:

  1. trends in poverty and other social and economic indicators since the advent of welfare reform,
  2. changes in the use of temporary assistance, medicaid and food stamps during this period, and
  3. several key county policies.
St. Lawrence
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