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Liu Says New Tax on Wall St. Bonuses Fair Game
Crain's New York
Daniel Massey

April 8, 2010
View the Original Article


In a sweeping overview of his first 100 days in office presented at a Crain's breakfast forum Thursday, City Comptroller John Liu declined to rule out supporting a new tax on Wall Street bonuses, fired warning shots at the Department of Education over its contracting practices and insisted he was not thinking about running for mayor in 2013.

Mr. Liu offered a broad snapshot of his first three-plus months in office, outlining attempts to “root out waste and inefficiency” and restructure and elevate his office's audit department.

[Watch a video of Mr. Liu addressing Wall Street bonuses.]

As he seeks to improve returns at the city's pension funds, the comptroller also said he'd terminated six contracts with pension fund managers covering assets of $1 billion and renegotiated management fees with a number of others.

He defended his decision to ease a ban on placement agents—the middle men who connect money managers with public pension plans—arguing that the change in policy was accompanied by other reforms aimed at increasing transparency in the office.

He also spoke of his support for requiring developers who receive any form of government subsidy to create living wage jobs, and of the need to revamp what is often an ad hoc public benefit agreement process that accompanies large-scale development projects.

As the Working Families Party, which backed Mr. Liu's candidacy, makes a push for a new tax on Wall Street bonuses that could raise up to $6.9 billion, the comptroller seemed to indicate that he would support such a measure.

“Every option has to remain on the table,” Mr. Liu said. “If you look in isolation, of course taxing bonuses will drive people out of the city, but decimating the police force by a quarter, or 20% or even 10%, will [also] make the city less livable.”

Mr. Liu said legislators have to “find the right balance” between new revenues and spending cuts, emphasizing that $1 billion in proposed education cuts would hit the city hard. “Any action we take to close the deficit at the state or city level will serve to make New York City a less attractive place,” he said.

The law passed last year in Albany reauthorizing mayoral control of the city's schools gave the comptroller's office new auditing power over the Department of Education. Mr. Liu threatened to use that expanded authority to block no-bid contracts.

“I would rank the Department of Education as No. 1 on that list [of agencies that will receive his attention] and we intend to aggressively make suggestions to them on how they spend our money,” he said. “The no-bid contracting is a problem.”

He also spoke of a task force set up by his office to examine the public benefit agreements that often accompany large-scale development projects. He said the deals that often promise local jobs, parks and other “goodies” have too often proven to be “great tasting, but less filling,” and added that there needs “to be a mechanism for ensuring the promises actually get delivered.”

He insisted such a mechanism would benefit developers and community members alike—“a winning situation all around”— in that the current process has become too unpredictable for all involved.

He also offered unqualified support for tying wage standards to city-subsidized development projects—an issue that has become increasingly divisive since the City Council shot down the Kingsbridge Armory redevelopment project late last year largely over concerns about wage issues. He said any project receiving direct city capital investment, tax abatements or zoning variances, or making use of eminent domain, should be considered subsidized.

“I do believe when we spend taxpayers' resources on subsidizing economic development, the jobs that are created should not be dead-end jobs,” he said.

On the political front, Mr. Liu appeared to indicate that his relationship with Mayor Michael Bloomberg remains frosty. Mr. Liu was one of the more vocal opponents of the mayor's attempt to overturn term limits, and Mr. Bloomberg was seen to be supportive of candidate David Yassky in the Democratic Primary, though he didn't officially endorse him.

“Having a relationship with the mayor was never part of my campaign platform,” Mr. Liu said, when asked how he was getting along with Mr. Bloomberg.

He shot down rumors that he's eyeing a bid to succeed Mr. Bloomberg in City Hall, saying, “I totally don't think about it,” in response to a question on his political future. “There's going to be talk about this,” he said. “But in the meantime, we've got some serious work to do in the comptroller's office.”