FOR IMMEDIATE RELEASE:
December 3, 2013

Contact: Tony Perlstein, Center for Popular Democracy
(917) 647-7751, TPerlstein@populardemocracy.org

REPORT:  NYC GOVERNMENT CAN RAISE $1B ANNUALLY FOR BUDGET AND CREATE $1 BILLION IN MAIN STREET STIMULUS BY USING $350B WALL STREET MARKET POWER

New York does enough business with Wall Street to renegotiate bad deals

On the heels of a mayoral victory won on the issue of inequality, a new report released today by the Center for Popular Democracy shows that New York City could generate an additional billion dollars annually for the city budget and generate a billion dollars in economic stimulus by effectively using its $350 billion per year in financial market power.  The report, “One New York for All of Us: Leveraging New York’s Financial Power to Combat Inequity” shows the city could save as much as $1 billion annually and stimulate the economy by about $1 billion more.

The city’s financial market power comes from the $200.4 billion that the city’s pension funds have invested in Wall Street institutions combined with an additional $150 billion in debt issuance and payments made and received.

“New York City is uniquely positioned to lead the way in holding Wall Street to an appropriate high standard,” said Connie Razza, lead author of the report and Director of Strategic Research Initiatives at the Center for Popular Democracy.  “We spend a ton of money with them, and we should use that clout.  The city and its related authorities have powerful financial leverage and economic power to demand short, medium and long-term changes from Wall Street that will save money for taxpayers, bring in more revenue for essential city services, and move new investments and new jobs into our neighborhoods and small businesses.”

The report kicks off a week of action to draw attention to the ways Wall Street and big corporations continue to siphon resources away from average New Yorkers and point toward solutions that would help reduce inequality and build economic fairness.

“In 2013, New Yorkers voted for a Mayor committed to addressing the vast inequality in our city, and for a strong plurality of progressive City Council members committed to broader prosperity,” said Michael Kink, Executive Director of the Strong Economy for All Coalition. “In 2014, we’ll start to build a New York that works for all of us. This report maps the way – and tells us to begin by changing the way the city does business with Wall Street.”

“This is our moment,” said Camille Rivera, Executive Director of United NY.  “We have the opportunity to make real change in the city and the state, but only if our elected officials know we have their back.”

“One New York for All of Us” highlights concrete solutions to address the imbalance in the city’s relationship with Wall Street. The report details how reforming the city’s relationship with banks could save a minimum of $725 million each year for the city budget, withhold another $300 million in current bank subsidies banks until job-creation commitments are fulfilled, and stimulate the local economy by another $1 billion per year, creating nearly 17,000 jobs.

Key recommendations:

• Renegotiate toxic financial deals to save up to $725 million each year.
  -Use the city’s economic and financial leverage to lower fees and interest rates for new and existing financial services;
  -Investigate unethical behavior by Wall Street and prosecute fraud to the fullest extent of the law to recover losses;
  -If Wall Street won’t negotiate in good faith, bring the functions into the city by creating an in-house financial management team and/or a publicly owned city bank.  
• Save money and create jobs by holding banks to firm commitments to the community in return for $300 million each year in city subsidies for banks.  
• Write down underwater mortgages to keep 86,000 families in their homes and stimulate the local economy by as much as $1 billion, creating nearly 17,000 jobs.

Key factual findings:

• The city and associated entities pay $160 million a year for bad deals with banks.
• The city, its pension funds, and the MTA pay $563 million in base Wall Street fees each year.
• New York City and State give banks subsidies worth about $300 million a year, without ensuring that New York City communities will benefit.
• Because their wages are so low, 39% of bank tellers and their family members rely on at least one public assistance program, at a total government cost of $112 million.
• During the past 5 years, foreclosures have cost New York City $1.9 billion in expenses and lost revenue.

“Due to the bank-induced mortgage craze and crisis, 20% of New York homeowners owe more on their homes than the homes are worth,” explains New York Communities for Change Executive Director Jonathan Westin. “By adjusting bank-inflated mortgages down to fair market value, we could stimulate the local economy by as much as $1 billion and create 17,000 new jobs. It’s good for homeowners, good for communities, good for the city, and even good for banks – whose risk of defaults would drop dramatically.”

“This report highlights the power that our city has to take a stand to improve income inequality. The Great Recession has not eased for most New Yorkers. We have lost good jobs, and the remaining jobs have actually deteriorated. In banking itself, this is shockingly true,” said Deborah Axt, Make the Road New York’s Co-Executive Director. “Frontline bank workers report less pay, inadequate healthcare, and more work with less staff. A full 32% of surveyed bank workers even report working overtime without pay. It is a tragic moment in New York City history when we learn that the wealthiest and most powerful corporations in our nation, perhaps the world, seem to be committing wage theft.”

ABOUT NEW DAY NEW YORK COALITION

The New Day New York Coalition is a new coalition made up of community groups, faith organizations, labor unions, and veterans of Occupy Wall Street working for years on issues of economic fairness – united to organize a week of actions demonstrating that the vision and policy principles New Yorkers voted for in the past election have popular support and practical pathways forward.

The coalition includes Center for Popular Democracy; United NY; Strong Economy for All Coalition; ALIGN NY; New York Communities for Change; Make the Road NY; Alliance for Quality Education; Coalition for Educational Justice; Walmart Free New York; Coalition for the Homeless; Food and Water Watch; NY Citizen Action; Met Council on Housing; Community Voices Heard; United Federation of Teachers; Professional Staff Congress; Retail, Wholesale and Department Store Union (UFCW); Communication Workers of America Transport Workers Union Local 100; New York State Nurses Association; Service Employees International Union 1199 – United Healthcare Workers East; Service Employees International Union 32BJ; Alternative Banking; Not An Alternative; Beautiful Trouble; 99 Pickets; MoveOn NY; and others.