It is a great pleasure to have you here in New York City. I think this book, Making Government Work, is an excellent contribution to reporting many of the things Mayors across America have done to make government more effective and accountable over the past decade. It will also help ensure that these innovations are built upon in the future, as citizens and mayors alike can study what we've done, and improve upon it.
When the political history of this particular era is written, I believe that the revitalization of American cities is going to be regarded as one of the most significant things that has happened. When people reflect back on the 1990s to 2000, I think they're going to say that the whole idea of urban America evolved and changed because of many of the things that are described in this book. People's conception of urban America has changed from a place that was derelict, decayed, filled with unemployment and union difficulties, to a much more realistic and positive place that is dedicated to improving the quality of life of its residents.
Of course, there are still significant problems in urban America. But over the last eight to ten years, local governments have really produced most of the innovation that has begun to change people's concept of government. And I think that applies more to the city governments than to the national government and state governments. We just don't have time for a lot of the political gridlock that affects national government and sometimes state government - the problems are too great, the issues are too pressing, and the answers have to come much more quickly.
And in that sense, NYC during the 1960s, 70s, 80s, and into the early 90s, served as a symbol of decline. I keep a national magazine cover describing New York City in 1990 as "the Rotting Apple," a city in decline. And at that time, people in the City of New York accepted it. They accepted the idea that this was our lot in life: that we were an old city that had seen our greatest days. We still had a lot going for us, we were still a strong city, but the perception was that things were never going to be as good as they used to be. We were never going to have as many jobs. We were going to be lucky to hold on to what we had. And we were going to have an inevitable decline that perhaps we could forestall a little bit.
Our City in the early 90s was averaging 2,000 murders a year. We lost about 330,000 jobs in a short time frame, which was greater than any job loss we had since the depression. We had almost 1.1 million people on welfare, in a City of officially 7.3 million.
But the greatest toll that this took was on the spirit of the people of the City of New York. And I'm sure this is true in many of your own experiences. People were cynical and they didn't think things were going to get any better. In fact, a poll in 1993 showed that many New Yorkers would leave the City the next day if they could.
At that time, our City provided an appropriate example of what was considered the decline of urban America. Throughout the last half-dozen years, however, things have fundamentally changed in New York City and throughout the country.
Mayors form different political parties - Republicans, Democrats - using different combinations of solutions have made very significant changes in the way government interacts with the people. And they have all kinds of names, in addition to Republicans or Democrats: New Progressives, Pragmatists, Centrists, Common Sense Conservatives. I actually haven't been called any nice things like that. The names they usually use for me are different.
But the reality is that this is not a Republican or a Democratic thing, this is something where you have to have the freedom to select the best solutions that exist. And I think at the core of this is accountability. And the title of this book says that, Making Government Work.
You have to be able to show people that government can play a positive role in their lives. And then you have to be realistic about that. Because if you make excessive promises of what government can do, if you promise that government can take care of all peoples' needs and all of their problems then you inevitably deteriorate their view of government when you fail them. I've tried very hard to show people realistic progress. Maybe it comes from my background in law enforcement where you know you're never going to solve all the problems. You know you're never going to have a time when there's no murder, no theft, no crime. That would be perfection and you're not going to get there. But that doesn't mean that we shouldn't try to reduce crime as much as we possibly can.
REDUCING CRIME & IMPROVING THE QUALITY OF LIFE
With regard to reducing crime - and I think this is true of all the things that we tried to do - we tried to replace bad ideas with good ideas. The two primary things that we've done to reduce crime - and there are many, many things - was the adoption of the Broken Windows theory and the CompStat program, which won an award for innovation in government from the Kennedy School of Government at Harvard University.
The Broken Windows theory simply means that you don't give people the sense that they can violate the law in small but substantive ways because they are regarded as less important than serious crimes. In the early 1990s, we had a situation in which there was a sense that there wasn't much we could do about street level drug use. Likewise, there was a sense that there really wasn't much we could do about street-level prostitution. And there wasn't really much we could do about graffiti. And there wasn't really much we could do about aggressive panhandling. We had over 2000 murders. We had 600,000-700,000 index crimes. With all those serious crimes, how could we be spending time on these less serious crimes?
In that misconception was the very core of our problem. The Broken Windows theory by Professor James Q. Wilson and Professor George Kelling, which is now well over 20 years old, had been used in smaller cities but it was never thought it could work in a city as large as New York. The name Broken Windows Theory comes from the metaphor used to describe the concept. If you have a building and it has a lot of windows and somebody comes along and breaks the first window and you say, "Well gee, that's not important. I've got bigger things to think about than one little window." Then somebody comes along and breaks another window and they break another window until finally you have no windows and the whole structure of the building begins to fall down.
On the other hand, if you pay attention to the first widow that was broken and you fix it, and you try to find who did it and say, "You can't do that. That isn't right," you protect the building at the first, easiest, and earliest possible moment, rather than letting it deteriorate. And there is something deeper and more spiritual about it all. By doing it, you reinforce the obligations that we have to each other as citizens. Which is a very, very important thing that a city government has to do. You say, "You don't have a right to break somebody's window if you want to live in a free society." A free society is not a society that says, "I can do violence to you. I can do violence to your property." That's an anarchistic society.
Think about graffiti. We used to be a city that was absolutely covered with graffiti. About a year and a half ago I was watching a movie on television and I saw this subway train go by. And for about a minute I knew there was something wrong, and I asked myself, "what era was this movie representing?" The subway train was all filled with graffiti. So I went and got the date of it, I think it was 1986. Then I went out and had somebody check our busses, our subway trains and our sanitation trucks. And we don't have graffiti on them anymore.
We started that six-and-a-half or seven years ago. We said that, first of all, we were going to get rid of graffiti the first moment that we see it. Take the train out of circulation, take the bus out of circulation, take the sanitation truck out of circulation, we're going to get rid of the graffiti right away.
The second thing we're going to do is to try and find the people doing the graffiti and we're going to fine them. Then we're going to sentence them to cleaning up the graffiti to teach them a lesson. And basically the lesson we were teaching is a very, very simple one. You do not have a right to destroy somebody else's property.
Graffiti-ridden trains, busses, and sanitation trucks used to travel through the streets of the City, and everyone who saw them said, "You can destroy somebody else's property and the City thinks it's OK." It was like an advertisement for disrespecting the rights of others.
Now when people see lots of graffiti-free trains and busses, in a very subtle way it says to them, "this is a city that really has a growing number of people respecting the rights of other people." It's a small example, but it's important.
The same thing is true for street level drug dealing, street level prostitution, and aggressive panhandling. It doesn't mean you pay more attention to that than you pay to murder or rape, though very often the press will play it that way. The reality is you have to pay appropriate attention to all of these things. You have to remove zones of lawless conduct. And it's not to be punitive. It's actually and ultimately to use the law for the purpose it really exists, which is to teach people the lessons they need to learn in order to have a constructive, productive life.
The CompStat program is the second program that has had a big impact on the level of crime. I used to be the Associate Attorney General. I was in charge of dissemination of the national crime statistics. So I've been involved in crime numbers for twenty years. And it seemed to me that we were doing something wrong in the way in which we measured police success. We were equating success with how many arrests were made. A police officer was regarded as a productive police officer if he made a lot of arrests. He would get promoted. A police commander in a precinct would be regarded as a really good police commander if his arrests were up this year. This wasn't the only measure of success, but it was the predominant one.
Arrests, however, are not the ultimate goal of police departments, or what the public really wants from a police department. What the public wants from a police department is less crime. So it seemed to me that if we put our focus on crime reduction and measured it as clearly as we possibly could, everybody would start thinking about how we could reduce crime. And as a result, we started getting better solutions from precinct commanders.
We have 77 police precincts. Every single night they record all of the index crimes that have occurred in that precinct and a lot of other data. We record the number of civilian complaints. We record the number of arrests that are made for serious crimes, and less serious crimes. It's all part of CompStat, a computer-driven program that helps ensure executive accountability. And the purpose of it is to see if crime is up or down, not just citywide, but neighborhood by neighborhood. And if crime is going up, it lets you do something about it now - not a year-and-a-half from now when the FBI puts out crime statistics. After all, when you find out that burglary went up last year, there's nothing a Mayor can do about it because time has passed and the ripple of criminal activity has already become a crime wave.
Now we know about it today. And we can make strategic decisions accordingly. If auto theft is up in some parts of the City and down in others, then we can ask why. And that will drive decisions about the allocation of police officers, about the kinds of police officers.
This is one of the reasons why New York City has now become city #160 on the FBI's list for crime. Which is kind of astounding for the city that is the largest city in America. Think about the other 159 cities: many of them have populations that are 300,000, 400,000, 500,000. And on a per-capita basis, some of them have considerably more crime.
It is an excellent system, but the core of it is the principle of accountability-holding the people who run the precincts accountable for achieving what the public wants them to do, which is to reduce crime.
IMPROVING THE ECONOMY
The next area where we've made tremendous strides is the whole area of our economy. In the past, the City government of New York was perennially in fear of bankruptcy. And the reason for that is we were spending too much. We were spending more money than the growth of our economy would allow. If our economy would grow by 3-4 percent in a given year, we would say, "That's wonderful. So now we're going to increase spending by 6-7 percent." We were essentially spending more money than we had, borrowing against the future. And for 20 to 30 years we created a structural deficit of massive proportions. We reduced it by cutting spending. We've cut spending by over $9 billion. The first year it was cut by about $2.5 billion, which was difficult. It meant making very difficult choices about privatizing. For example reducing the number of employees in our hospital system by about 15,000-16,000, because we were staffed for 100% bed capacity and operating at significantly lower levels. It meant restructuring a lot of the agencies so even if we did increase the number of employees, they were going to have to find new ways of paying for them, in terms of productivity and work that was done. Because if we were spending the same amount of money as we were six years ago, instead of having an almost $3 billion surplus at the end of this fiscal year, we would have probably a $500 million deficit-even with this good economy.
So again, this is a question of accountability, of saying that government can't do everything. You have to figure out what government can do, and do that well, so that citizens will be confident that their government is responsible, honest, and effective. And the truth is that then you're able to really accomplish things for people.
For example, we've cut taxes by $2.3 billion, which the city has never done before. We did this to try to stimulate our job growth, and to make New York City a more attractive place for business. And the last three years are our three greatest years for job growth in the history of the City going back to 1951, before which we don't have statistics. This is now the longest period of sustained private-sector job growth that our city has ever had.
The tax cut I like the best illustrates the value of cutting taxes in terms
of spurring private sector growth and creating jobs. Our hotel occupancy tax
used to be the highest in the country - 21 ¼ percent. That was because
more than a decade ago the city and the state were facing these huge budget
deficits - there were a lot of services they had to fund - and the only political
thinking available was, "let's raise taxes and we'll have more money."
So the city and state together raised the hotel occupancy tax to 21 ¼
percent. And they kept it there for quite some time. The Association of Convention
Bookers actually put out an advertisement that said, "New York City has
the highest Hotel Occupancy Tax in the country. Don't book your convention there."
And according to our City Council, we lost maybe $900 million to a billion dollars
in business as a result of this tax. This was a tax that clearly needed to be
reduced. Well, we reduced it by almost a third. At the time, there was a lot
of fear and a lot of worry. And now we collect $90 million dollars more from
the lower hotel occupancy tax than we used to collect from the higher hotel
Cutting the hotel occupancy tax also had a tremendous effect in helping our welfare reform efforts, because it encouraged the creation of entry-level jobs in hotels and restaurants that have flourished during the past four years of record tourism in our City. It is a concrete example that reducing taxes can actually help to achieve job growth and reforms in other areas.
I fought very, very hard to eliminate the sales tax on clothing in New York City. I believe it should be eliminated for all clothing purchases in New York State. We have succeeded in reducing the sales tax on clothing purchases of $110 or less. So if you go out and buy a shirt today, or a tie, or shoes of $110 or less, you pay no sales tax. I'd like to see it reduced completely. That would be the best jobs program we could create for people who are poor, given our economy, which is a free-market capitalist economy. That's the economy we have and we have to make that economy work for us. We can't do things that are contrary to it. Likewise, the best jobs program in New York City we could have is to take that $110 sales tax elimination and make it no sales tax on any clothing. It would produce another 12,000-14,000 new jobs.
Finally, I'd like to speak about the whole area of welfare, which is maybe the most important thing that needed to be changed. Our City's welfare reform program pre-dates the federal welfare reform legislation by about a year. Our welfare reforms are designed to reinforce, and to teach, the social contract, which is philosophically the idea upon which our democracy is based. The social contract says that for every benefit there is an obligation, for every right there is a duty; and for everything that you're given, you have to give something back. Government should be teaching it and reinforcing it - but definitely not doing the opposite, which is teaching and reinforcing dependency.
In the past, it seemed to me that one of the things that was happening in urban America was that we were not allowing the genius of America to happen for the poorest people in America. In fact, in some perverse instances we were doing just the opposite, we were blocking the acquisition of the genius of America for lots of poor people. The genius of America is that if you can acquire the work ethic you can really accomplish a lot for yourself and your family.
We realize that there are people who are disabled and there are people who need help. And there are people for whom this just isn't going to work. But our philosophy in the past was, "Let see how we can maximize the number of people who are dependent." Now our philosophy is, "let's see if we can maximize the number of people who can feel the joy of taking care of themselves, and minimize the number of people who are dependent."
Back in 1965 we had about 400,000 people on welfare. Between 1965 to 1971,
we went from about 400,000 people on welfare to over 1.1 million people on welfare.
We went over 800,000 in the late 1960s and we remained there through the 60s,
70s, 80s, and through the 90s. This was not a result of a change in our economy.
The American economy did not deteriorate during that period of time, it was
actually growing. This explosion in the number of people on the welfare rolls
was a direct result of government's decision about how to deal with poverty.
The only answers that my city government had for 20-25 years was, "Let's
go to Washington to get more money, so we can put more people on welfare."
We used to use terms like, "Welfare should be user friendly," without
thinking about the destructive consequences this could have on people's lives.
So we began a workfare program which said, "If we can help you get a job in the private sector, we will. If you can get a job in the private sector, take it. But in exchange for welfare benefits, if we can't get you a job or you can't get a job, then we will have you work for the City, assuming that you're able bodied, assuming you're not sick, and assuming that you don't have young children that we can't place in daycare."
We took that on as our obligation and we spent hundreds of millions of dollars to solve the humane problems and practical problems many people feared would come with welfare reform. Now, you have to work 16 to 20 hours a week for the City of New York - which is the maximum that the law allows - for the Police Department, for the Parks Department, for the Transportation Department, for the Mayor's Office. You've got to give something back. If other people are supporting you, you have an obligation to help improve their quality of life, and to give something back to this city. About 300,000 people have gone through the workfare program. And now, we've shrunk the city's welfare rolls from over 1.1 million to below 600,000. This is the lowest number of people on welfare since the mid-1960s. Last month, even with some court disputes about our Welfare to Work programs, we had our largest decline of people in welfare - 11,000 fewer people on welfare by the end of the month than at the beginning of the month. Of course, right now we're helped by a growing economy that provides lots of jobs for people. We have a situation where anyone who wants a job can get one. We've got to take advantage of that and try to move as many people towards work as possible - in order to help them.
If I took you to a welfare office today - or at least half of them, and hopefully by the end of the year all of them - the sign on the door when you walk in says "New York City Jobs Center." It doesn't say welfare office. And the difference isn't just a sign. Inside, a whole different process goes on. When you sit down and ask for welfare, the first thing we ask you is "what kind of work have you done, what kind of jobs have you had, what kind of work do you think you can do." We fight to keep you from dropping out of the work force. We want to encourage you to take the maximum number of steps to take care of yourself, rather than going in the other direction. And we're doing that because we care about you. Maybe because after all these years of mistakes regarding welfare, we have a little better understanding of the human personality, and what can really help people. Again, it's a question of accountability, in a sensible, rational, and decent way.
REFORMING PUBLIC EDUCATION - THE CHALLENGE AHEAD
The last area that I'd like to mention very briefly is the area of education. We've made a lot of changes in education. We've changed the governance of our school system to some extent, but not as completely as we should. After a very long battle, we have ended principal tenure. Principals can no longer remain at a school if they are failing to really help the children. In addition, we've introduced merit pay for principals, so that the good principals can be paid bonuses. We've instituted citywide reading programs such as Project Read, we've re-established arts programs in the schools, which had foolishly been removed 25 years ago. We've put computers in all of our elementary schools, and trained over 1,000 teachers to teach new technology, which the children now have access to. We've changed special education, and moved it in a positive direction for the first time.
But I would be less than candid - and I'm not - if I told you that we've been able to really reform our school system in the same way that we've been able to reform other areas of city government that I've mentioned to you. And the reason for that is rooted in philosophy. I believe very much in philosophy. Philosophy guides a lot of what happens in a government. The ideas that you argue for, and discuss, get implanted in people's minds. And that's more important than lots of specific programs, or specific tax cuts, or anything else.
The New York City School System is today a job protection system, not first and foremost a system about children. And the biggest change that has to be made - and there are many different ways to make it - is that we have to change the idea of the school system. The idea of a school system is not about protecting the jobs of everybody in the system without regard to their performance. The idea of a school system is to do the best job in the world of educating children. And then everything else follows from that. That is how we're going to evaluate this system. We must take the risk that somebody may not have all his benefits and perks. Currently, it doesn't matter if the teacher is the best teacher in the world or the worst teacher in the world. They're treated exactly the same - despite the fact that there is a real difference in performance. And we've got to get the system around to performance.
In that area, New York City has a lot to learn. We have a lot to learn from Chicago, where the legislature in Illinois did away with their Board of Education and their local Boards of Education several years ago. Mayor Daley has done an excellent job of making that school system much more accountable under his control. Because he's accountable, he's putting good people there who are already putting principles of accountability and competition in place and making big improvements. New York City and New York State have not developed the political will to do that. I never like it when another City is ahead. In education, I think that's particularly terrible. We haven't had the courage to take on that type of innovation yet because of the heavy pressure of the job protection system.
Milwaukee has also done something really courageous. Mayor Norquist has instituted a school-choice program in which the poorest parents in the City end up with the same choice as the richest parents. And ultimately then, you break up the job-protection system because then the parents won't choose the schools that are failing. In 1999, a private organization headed by Ted Forstmann offered 2,500 scholarships to private and parochial schools. They received over 160,000 applications from New York City residents. The majority of those applications came from New York's most disadvantaged families. Those families were saying overwhelmingly that they wanted a choice. They wanted more freedom, a better education for their child, and a little more choice about the future of their child, rather than the government telling them that they must put their child in a particular school even if they're not satisfied with that school. The cities that embrace these changes, and honestly say, "let's break this job protection system and replace it with a system that has one primary goal - the education of our children," will thrive in the years to come.
This is not at all an attack on teachers. There are great teachers. There are much better than average teachers. There are average teachers. And then there are teachers who are below average. And there are teachers who shouldn't be teachers. That could be said about any group of people, any profession. And the great teachers should be rewarded. Particularly the ones that are in a difficult school district, and they're having great results. They should be rewarded. We have to start to find fair principles upon which to do that evaluation. That means putting the children first. And I think that is the great challenge of the next three or four years.
All of that, however, is possible because it builds on the changes that you've already made. This book, Making Government Work, is an excellent example of that.
I'd like to close by reading you something. Because it's something that Fiorello LaGuardia, my hero, used in his first inauguration as Mayor of New York City. And I used it in my second inauguration. It's the Ancient Athenian Oath of Fealty, which the citizens of Athens were required to take about their City. It may be the primary model on which a lot of our cities, a lot of our social obligations, and a lot of our sense of politics, is rooted.
"We will never bring disgrace to this, our city, by any act of dishonesty or cowardice nor ever desert our suffering comrades in the ranks. We will fight for our ideals and sacred things of the city, both alone and with many. We will revere and obey the city's laws and do our best to incite a like respect in those above us who are prone to annul them and set them at naught. We will strive unceasingly to quicken the public sense of civic duty. Thus in all these ways we will transmit this city not only not less, but far greater and more beautiful than it was transmitted to us."
That, ultimately, is what we're all trying to do.
Thank you very much.