NCPA - National Center for Policy Analysis


August 3, 2010

New York City can save $500 million over the next four years, all with moves that are close to painless, according to New York's newest deputy mayor, Stephen Goldsmith, whom Mayor Michael Bloomberg has tasked with finding efficiency opportunities in the city's operations. 

For instance: 

  • New York City's public offices have 8,000 vacant desks, roughly 11 percent of the workstations in the city government's 19 million square feet of office space.
  • The city has nine separate agencies to handle vehicle maintenance, operating 125 separate maintenance garages, some across the street from each other.
  • Each city agency has its own human resource department, with an overall ratio of HR workers to employees 2.5 times higher than is typical in the private sector.
  • Police officers still report their hours worked on an error-prone, paper-based system that involves pairs of officers driving boxes full of paperwork between precincts and One Police Plaza.  

As with so much in local budgets, New York City's budget woes largely come back to employee compensation, says Josh Barro, the Walter B. Wriston Fellow at the Manhattan Institute: 

  • Fifty-eight percent of New York City's budget is spent directly on salaries and wages -- and the effective figure is higher than that, as some noncompensation costs are subsidies to other government agencies that spend the funds on compensation.
  • The city faces runaway growth in compensation costs, especially health care and pension benefits, but also wages that are growing faster than the private sector norm.
  • Meanwhile, the Wall Street engine that long fueled outsized growth in city tax revenues remains stalled. 

Making the city's budget sustainable will involve making some hard choices, in addition to easy ones like consolidating the city's human resources apparatus.  Fortunately, Goldsmith's report provides some clues about much larger savings that could be available with some legislative changes, says Barro. 

Source:  Josh Barro, "Making New York City More Efficient," Real Clear Markets, July 27, 2010.

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