WASHINGTON – New York City says it needs $6 billion in federal cash to rebuild its borough shorelines, its transit systems and other infrastructure ruined by Sandy.
The city wants the money not in the usual formula of 80 percent, but 100 percent. It should get that, and all it needs. New York, suffering as rarely before, is America's city – financially, culturally and in communications.
The aid must be direct; not just in tax breaks, as was the case after 9/11. No matter who is elected Tuesday, there should be no walking away from New York. We have been plenty generous to Iraq and Afghanistan reconstruction – at $20 billion plus, so far.
That said, there is the rest of the state, where about 6 million try to live. They need reconstruction of another kind.
Upstate – that part of New York that New York too often forgets – needs an economic recovery to reverse its slow population slide, the continuing movement offshore of its industries and good-paying jobs, and the swelling pockets of poverty and hopelessness in its cities and country towns.
The obstacles to that resurgence are, as always, financial but also cultural – or to put a point on it, political.
As News Albany correspondent Tom Precious reported the other day, state tax revenues are lapsing below estimates. That's because of the recession, but also due to industrial flight, and the shifting of Wall Street activity offshore and across the Hudson River. And flight of high earners to other jurisdictions where taxes are lower (which is virtually anywhere else in the country.)
There are more financial pressures coming, visible and invisible. Thanks to the creativity of New York's Democrats in Congress over the years, the state receives roughly twice the Medicaid dollars than its population warrants. Under President Obama's health care law, Medicaid obligations are likely to grow, menacing local governments that pay a fourth of the cost.
No matter who is elected, no matter what they have said or not said, Congress is going to press downward hard on actual Medicaid spending. The Obama administration is already nickel-and-diming clients of Medicare, the insurance program, mainly those who have paid little or no premiums into the system.
Even less palatable to discuss is the pension bomb. A new study by Milliman, a private actuarial firm, shows that 100 large pension funds have underreported their unfunded pension liabilities by more than $1.3 trillion. That's how much more they will need to pay out than they are telling people.
The New York City Teachers Retirement System, for example, owes $17 billion more to pensioners than it has set aside money for. The city employees fund is $13 billion short. City obligations are state obligations. (Upstate) State Teachers Retirement is funded at 100 percent. That's because it automatically draws down on local and school district budgets. The gap in the city funds ought to tell you how heavy pension costs are for localities.
Gov. Andrew M. Cuomo has made admirable progress in cutting pension premiums, marginally. While he likes to say the state is “open for business,” far more drastic steps must be taken to cut the state and local taxes that discourage job creators.
It is hard to see how the needed roll-backs on public employee deals – which are at the core to reforming the state's business climate – can be done without the creation of a real Republican Party that will add a true conservative voice to the dialogue. Not the go-along GOP of former Gov. George E. Pataki, but the uncompromising brand led by Ohio Gov. John R. Kasich and Wisconsin Gov. Scott K. Walker.