It is very obvious that we are approaching election season in New York, as the fundraisers and calls from local politicians are starting to come with greater frequency.
Given the budget deficits that New York is facing, both at the city and state level, one of the questions I always ask politicians looking for donations is what three specific line items in the city budget do they believe could withstand cutbacks. I have never received a straightforward answer to this question and most of the time the default position from the politician is, “We must work hard to eliminate waste, fraud and abuse.”
I find it interesting that the “waste, fraud and abuse” cop-out is relied on so heavily (after all, who wouldn’t agree to eliminating these things?) but when politicians finally get the chance to address waste, fraud and abuse, they rarely take advantage of the opportunity.
A case in point is the recent turmoil over the fingerprinting of food stamp recipients. Many elected officials have demonized this practice as being a stigmatism on recipients. Recently, City Council Speaker Christine Quinn said, “Fingerprinting food-stamp applications is an unnecessary, time-consuming, stigmatizing process that I believe criminalizes poverty.” So, should we surmise from this that the only people getting fingerprinted are criminals?
This is far from the fact. Nearly every city government employee is fingerprinted. If you want a job in the school system, you need to be fingerprinted. This includes teachers, clerical staff, janitorial staff, hall monitors, cafeteria employees, sports officials, bus aides, bus drivers and employees of contract service providers who are placed within a school.
Additionally, holders of taxi medallions must go through this process. Many who work on Wall Street are fingerprinted, as are employees of the FBI, the CIA and the military. I assume this elected official believes that all of these people are stigmatized.
Clearly, this process has not stigmatized those folks, and it’s not as if the food stamp recipient, who is fingerprinted, will walk around with an ink-stained thumb for the rest of their life. If elected officials are serious about eliminating waste, fraud, and abuse, the time tested method of fingerprinting recipients of public assistance should be continued.
The mayor and the governor disagree on this issue. Recently, Mayor Bloomberg defended the policy saying, “There’s just no reason I know of why you shouldn’t do fingerprinting on food stamps as a prophylactic measure to ensure the public that the only people who are getting benefits that the public are paying for are those that deserve it.”
It is apparent that this issue is more about getting votes than being fiscally responsible. 1.8 million New York City residents receive the benefit. That’s a lot of votes, and a lot of room for waste, fraud and abuse if not administered properly.
You may be asking why I am concerned about the elimination of waste, fraud and abuse from the city and state budgets. From a state perspective, I am concerned because the less money the state has to give to the city, the less money the city gets from the state.
And from the city’s perspective, the more money that is squandered will lead to ever increasing budget deficits, which will lead to inevitably ever-increasing real estate taxes which have reached all-time highs as the percentage of gross revenue. This is notwithstanding the supposed correlation between real estate tax assessments and market value. We have seen this relationship abandoned when the city needs money. The city needs money, so real estate taxes go up.
We must implore all elected officials to be fiscally responsible. True line item budget cuts are unlikely so we must attempt to implement strategies to truly eliminate waste, fraud and abuse. Pension reform is another huge area impacting our finances, but this is another topic for another day. Presently, we must try to keep the deficits to a minimum, which will reduce the upward pressure that is continually placed on our real estate tax obligations.
Robert Knakal is the chairman and founding partner of Massey Knakal Realty Services and in his career has brokered the sale of more than 1,175 properties, having a market value in excess of $7.8 billion.