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The State of the City Address
Archives of Rudolph W. Giuliani

January 14, 1998



Speaker Vallone, members of the City Council, Borough Presidents, members of the Legislature, distinguished guests and friends of the City, fellow New Yorkers.

The State of the City of New York in 1998 is about as strong, and as safe, and as financially sound and responsible as it has been in at least thirty years.

We are enjoying good times and times of hope and possibilities.

Together, we have much to be proud of in all that we have done to reform, revive and rejuvenate our City.

For this and for more, we all have a right to enjoy our success and our restoration as the city now viewed as the "Comeback City" and the city Americans most want to live in and visit.

But as we review the state of our City, we must look to our future.

This is our 100th anniversary as a consolidated City and we are in the last years of the 20th century.

This is a pivotal moment in our history. We must use it to make certain that our reform takes hold and continues to strengthen our City well into the next century; to make certain that all New Yorkers move from the prior era of dependency to the age of opportunity and advancement; to make certain no one is left out, no one left behind.

So rather than discussing the state of our City today, let's discuss how we can improve the state of our City for the great celebration of the 21st Century; fulfill the pledge we said together on New Year's Day to transmit our City as more beautiful than it was transmitted to us; and assure its position as the Capital of the World well into the next century.

PUBLIC SAFETY

All that we have accomplished, all that must be done in the future, rests on a foundation of public safety and improved quality of life.

We cannot maintain, much less continue, our success in reducing crime unless we take steps now to change dramatically the balance in our criminal justice system so that the rights of victims and the rights of society are accorded at least as much, if not more, respect than the rights of the criminals.

It is remarkable that crime has been reduced so much by the police, correction officers, prosecutors, community groups and others because the criminal justice system in New York State is still more favorable to those accused and convicted of crime than just about any state in America.

Twenty-seven states and the federal government have done away with early release on parole and replaced it with truth in sentencing. Under truth in sentencing, when a criminal receives a nine-year sentence, for instance, that criminal will serve his full sentence, with a small percentage off for good behavior and supervised re-entry rather than serving three years, as is often the case in New York.

In New York because of parole and early release dates from prison the police are arresting the same habitual criminals over and over again.

In fact, parolees commit so many crimes that we could conservatively project another 5% decline in major felonies if the State ended parole, according to an analysis by the Police Department. That would mean close to 12,000 fewer major crimes in our City.

I call on the state to end parole and ensure that all persons sentenced serve their full sentences, less a small percentage off for good behavior and supervised re-entry.

The state should also enact legislation to make publicly available the records of juvenile repeat offenders convicted of violent crimes and drug crimes. The purpose of sealing the record of a juvenile is to allow scope for rehabilitation. But after the juvenile has committed a second, third, or fourth offense, what is the purpose of keeping his record sealed except to create the false impression that he is not as dangerous as his conduct clearly indicates?

At most, the law should allow for sealing only the first non-violent offense. After that, all records should be open and able to be reviewed publicly each time a repeat juvenile criminal is arrested. Unsealing juvenile records will force violent juvenile offenders especially repeat offenders to deal with the consequences of their convictions realistically and openly rather than concealing the truth from the public.

On October 1 of last year we announced our drug initiative.

Since then the City has doubled the residential treatment positions in the Department of Probation (from 180 to 360).

We have also expanded our commitment to the DARE program in schools and have established the ASPIRE program in housing development community centers, which includes both DARE and GREAT, the Gang Resistance, Education and Training program. Soon, 4,000 children in our housing development community centers throughout the City will receive afterschool anti-drug and anti-gang education.

With the support of Speaker Peter Vallone and the City Council, we are now increasing BEACON schools which turn schools into community centers after hours from 41 to 69. We will make the dangers of drugs clear to every child in the City, and then do everything we can to ensure that they start out living productive, drug-free lives.

We will expand the NYPD's aggressive anti-drug initiatives now operating in four areas of the city to nine areas and in every borough.

The objective is to put a stranglehold on the drug trade in all five boroughs, to give the drug dealers no place to relocate within our City.

Accomplishing this, and maintaining the level of crime reduction throughout the city, will require a deeper commitment from all of us. I appreciate the Speaker's support for our increasing the number of police officers to 40,000, the highest ever in the history of the City.

The State should also make funding available for drug treatment, but then both the City and State should provide that money only to fund long-term programs that can be evaluated based on their success in rehabilitating addicts.

And in turn the federal government, in particular the President, must make the reduction of the importation of drugs into the United States as important a part of our foreign policy as trade relations or regional conflicts.

Only then will we have the support necessary to deliver millions of Americans from lives of dependency on drugs to lives open to the opportunities of political and economic freedom.

But we're not waiting. We will make sure that, as we've done in crime reduction and welfare reform, we lead the way instead of pointing a finger at another level of government.

Let's lead in the best possible way, by example.

At the same time that we root out drug abuse, our increase of 1,600 police officers will allow us to add strength to our other strategies, particularly domestic violence and quality of life. We have already led cities across the nation in realistically addressing domestic violence, but we must build on our successes.

We must continue to confront this crisis in all its scope and depth. We will build on the fine work of the Mayor's Commission to Combat Family Violence, strengthen the NYPD's already improved domestic violence strategies, and continue to make domestic violence coordinators available at public and private hospitals throughout the City.

Domestic violence is still a problem that affects far too many New Yorkers and gets far too little attention. The City will push for anti-stalking legislation, lifetime orders of protection, and full faith and credit on out-of-state orders of protection, so that we have additional legal power to protect women and children from being injured by their batterers.

And improving the quality of life for each and every New Yorker is a work in progress as well, requiring our constant vigilance. That is why we will advance a renewed quality of life campaign to reduce noise, traffic, and graffiti, as ably argued by Jonathan Foreman in his article "Toward a More Civil City" in the current City Journal.

We are committed to improving upon the remarkable success that the police have had in fighting crime. But to ensure that this happens, and to truly build a more civil city, we have to do something else besides redoubling and improving our law enforcement strategies.

We have an opportunity, and an obligation, to make revolutionary change in the area of police/community relations.

Change must take place with the police and we already are making real progress in ensuring that this happens.

After the Police/Community Relations Task Force has an opportunity to present me with its recommendations and the recommendations of the Police Department and others, we will incorporate those recommendations into a permanent strategy to reach every police officer and assure proper adherence to courtesy, professionalism and respect. And we will also embark on a program of enhancing the civility of all city employees so that, whether in uniform or not, city employees are mindful of the people they serve.

But to fully address police/community relations, we must have a balanced approach. We must also combat the propaganda perpetuated by those who get attention and sometimes make careers out of police bashing.

Let's deal with the facts.

Over the past four years crime has declined 44%, murder by 61%, and shooting victims by 61%, and shooting incidents by 62%.

The police bashers and those who jump on their bandwagon would have you believe that these crime reductions were accomplished by a Police Department that has become much more aggressive, particularly in the use of weapons.

But just the opposite is true.

During the period from 1993 to 1997 in which crime declined dramatically, the number of police shootings per 1,000 officers declined by almost 40%. [from 10.9 per 1,000 officers to 6.7 per 1,000 officers]

This makes the NYPD not only the most successful police department in America in reducing crime but also the most restrained of any big city police department.

How often do you hear the police bashers give you those facts?

But this is not to say that police in this city are by any means perfect.

Even one cop engaged in brutality or criminal conduct is one too many and unfortunately it's more than one.

Police Commissioner Safir and I promise you that any police officer found to be engaged in serious misconduct will be fired and if appropriate prosecuted, and that those engaged in lesser misconduct will be disciplined.

And we are doing everything we can to reduce incivility and disrespect among any of the police officers who continue to resist the Commissioner's Courtesy, Professionalism and Respect program.

As I have said on a number of occasions and will continue to say, respect takes root and grows when it is mutual.

Those who want more respect from the police must be willing to give that same respect in return. And they must be willing to support police officers who are unfairly or prematurely accused by those even in their own community who blame the police before they know the facts.

The major, overwhelming danger of violence for a citizen in this city comes from possible attack by another citizen, not by the police. It is those types of crimes that the police have almost cut in half over the last four years, while also reducing the already minuscule number of police shootings.

It's time for both sides of the debate to change their thinking.

The remaining police who still fear people because of their race, religion or ethnicity must realize that this is an irrational exercise of group blame. If they can't, they should leave the NYPD before we have to remove them.

And those people who continue to use individual incidents of sometimes unjustified and sometimes entirely justified police conduct as a way of blaming an entire police department must realize that this is an equally insidious form of group blame which ultimately serves lawlessness.

In addition to the initiatives I have just outlined to increase public safety and improve quality of life, we will also:

Expand our use of cameras in NYCHA developments and certain drug-free parks, so that this additional tool can help us further deter drugs and violent crime in our neighborhoods. For example, in the six months since cameras were installed in the Grant Houses in Morningside Heights, overall crime there has fallen 35 percent.

Expand EMS stations to communities throughout the City.

Continue to institute Operation Night Light, decentralizing probation officers to our neighborhoods, and build upon it, so that throughout the City probation officers operate out of "storefront" offices, enabling them to more effectively supervise their probationers' compliance and ensure that onetime offenders stay on the right track.

Continue to advocate for national gun control laws.

Continue the police department's successful anti-gang strategy to root out street gang activity in our neighborhoods and schools.

EDUCATION

No matter what improvements we make in public safety, if we don't have a first-class educational system, the future of the City will be in doubt. Since October 1995 Chancellor Rudy Crew, Board President Bill Thompson, Deputy Chancellor for Operations Harry Spence, and Deputy Chancellor for Curriculum and Instruction Judy Rizzo, as a team, have accomplished for our school children more positive change in just over two years than in any comparable period of time.

After 30 years of failed attempts to reform school governance laws, we finally convinced Albany to give the Chancellor more power.

And Chancellor Crew has used his new governance aggressively and wisely.

He has removed or suspended four school boards.

Fourteen of the 32 district superintendents are new, as are four of the six high schools superintendents. For the first time, all of them have now been selected by the Chancellor on the basis of merit. They understand that they are expected to show results. And with the advent of school-based budgeting, we can finally begin to ensure that taxpayer money is spent wisely. We're beginning to see a system built around the idea of performance built on raising the level of student achievement instead of one shrouded in unaccountability.

In the past year reading scores and math scores went up, more seats were added than students, and each of the projects we proposed one year ago moved forward.

I will report to you briefly on the progress of those projects.

Project Read. As of December 128,989 students were enrolled in Project Read, representing 47% of the children in grades one through three. Those students are all receiving at least six hours of additional reading instruction in components of Project Read like the Intensive School Day Reading program and the Family Literacy program, and large numbers are also involved in the Summer Literacy Program and the Housing Authority's Partners in Reading program. All of these programs have been implemented and they will be continued, with modifications the Chancellor believes necessary.

Project Smart Schools has already led to the installation of 7,576 computers in 185 schools involving a total of 1,826 classrooms and 182 libraries. By early March of this year, over 13,500 computers will have been installed in over 3,500 classrooms, giving over 100,000 students access to computer technology in the classroom. And by April, over 4,300 teachers will be trained in the use of computers as an educational tool that can facilitate teaching and learning in all areas. This project has progressed faster than anticipated and will continue to provide computers for all schools and training for our teachers so that all our children can have the opportunity to acquire the skills they need to compete and succeed in the next century.

Project Arts, which is intended to restore arts programming in all schools as a necessary part of the curriculum, has reached 438 schools with 461 new full time art and music teachers.

New York City is the art capital of the world, and we will over the next four years extend to more and more New Yorkers the opportunity to experience the beauty that is created every day in the City, and the chance to explore their own creativity. Understanding the ennobling power of beauty is just as critical a part of education as reading or math.

Project Arts will continue and be enhanced by a major new commitment by Joseph Volpe, General Manager of the Metropolitan Opera, to expand significantly the exposure of New York City school children not only to opera and music, but to Lincoln Center and the Metropolitan Opera itself to encourage an interest in all aspects of the performing arts. Arts education will continue to be restored, and never again will it be removed from our schools.

Project Textbook has provided an additional $70 million over and above the baseline $70 million textbook budget to make certain that all our textbooks are current. Under law, 21.1% of the $70 million was provided to non-public schools and the balance to the Board of Education. Because the books are purchased at the local levels it was not possible for the Board yet to track all of the new textbooks. I have asked the Mayor's Office of Operations, however, to make a complete review to make certain that our pledge of making all textbooks current is fulfilled and if there are unfulfilled pledges, to make certain they are rectified this year.

Our Seating Expansion plan is now keeping pace with our growing student population, and we are planning for the future. Last year, over 22,700 seats were added more than in any year since 1975. In fact, in the last four school years, we have expanded capacity by over 80,000 seats, more than four times the total number of seats added in the previous four school years. For the future, we have increased the Board of Education's capital plan for FY 1999 to its highest level ever, and have proposed the creation of over 18,000 additional seats at the start of the next school year.

At the same time, to continue to enlarge seating capacity and create the best educational environment for our children, I will urge the Board to accelerate its pilot program for year-round schools and, if it works, to implement it on a larger scale over the next three years.

All of these initiatives are, of course, works in progress, and much more work lies ahead if we are to make our schools once again the best in the nation.

When I met with the newly appointed superintendents at the beginning of the school year and asked them what could I do to help them fulfill their new obligations to the Chancellor to improve education, they said we could convince the state legislature to end principal tenure. This is not to say that we didn't agree that there are many excellent principals, who would not be at risk of losing their positions. In fact, we should look for ways to give these principals additional rewards.

But it is time to face the question why should anyone in a management role in a system crying out for major improvement be immune to performance standards?

The chain of accountability cannot stop with superintendents, as it effectively does right now. As the administrative managers and leaders of our public schools, and the people who are ultimately responsible for the success or failure of each school, principals need to be held responsible for the work they do both good and bad. Allowing them to remain immune to standards would be irresponsible of us.

The state legislature should abolish principal tenure and it should be replaced with 3-to-5 year contracts for principals renewable by the Chancellor and superintendents based on performance namely, demonstrating excellence in the task of managing a school. As to the approximately 487 principals employed by the Board of Education who have not yet earned their tenure (60 of whom are interim acting principals), the Chancellor and the Board should review their performance and not grant tenure to any principal who does not show demonstrable improvement in school performance. This will impose accountability on principals as we fight for change on a statewide basis.

The only way to raise standards throughout our educational system is continually to require more and more accountability.

That is why we must also end the practice of social promotion, in which students sometimes go from grade to grade just to stay with their class whether or not they meet performance standards.

We have to begin imposing standards or students will continue to fall behind, have unrealistic expectations about life, and make the education of those around them more difficult.

I believe we should start this year, in the third grade. I propose extending this school year for all third graders who are unable to meet the requirements to move on to the fourth grade. We will work with the Chancellor, the City Council, the Board, the Governor and the State Legislature to provide the funding necessary to get these children to grade level at the earliest possible time not the latest. But ultimately, if a student fails to meet basic grade level standards by the end of third grade, that student should have to repeat the third grade.

Of course the work necessary to bring all third graders up to grade level includes enhancing early childhood intervention, expanding pre-kindergarten programs and extending programs like Project Read.

Also, as we formulate a plan to extend the school year for third graders, I will work with the Chancellor, the Board and the State to find funding ultimately for an extension of the school year for all students for an additional month.

If we want our children to be able to compete successfully with children from all around the world, and we want to both impose and make realistic increasingly higher standards, we simply must extend the amount of time children spend in school.

I've discussed with Chancellor Crew several alternatives to accomplishing this goal, and over the next month we will work together to create both targeted extensions and overall extensions of the school year.

We must make another dramatic change. We must end the policy of allowing people seven years to graduate from a regular high school, which means we have 21-year olds in the same school building as 14-year old students. That's demoralizing to the students themselves, the students around them, and their teachers.

This year the Board should require 6 years for graduation and at the end of next year reduce it to 5 years.

And for those who can't graduate in the required time, I will work with the Board in developing evening and weekend courses so they can get a diploma while they work at a full time job.

The new educational philosophy in this City must be that we will do what works for the children rather than perpetuating the old way of doing things simply because it is familiar. I want to offer my support and encouragement to the Chancellor in his efforts to support as many alternatives as possible, including separate schools for girls at the grammar school level, military schools, extension of the ROTC, camps and school uniforms. The more alternatives, the better. We can't afford to be defensive or close-minded about ideas that can improve the state of education in the City. These ideas don't belong to us. They belong to our children. They're the ones with their future at stake.

This is why I also strongly support the movement toward charter or independent schools, and believe these should be established by appropriate state legislation. Already there are 81 schools in New York City which operate on a more independent basis under arrangements with the Chancellor. I urge the Chancellor and the Board to set up criteria allowing new groups or existing schools to free themselves of the restraints of a still too burdensome bureaucracy, but at the same time provide strict performance criteria and contractual provisions to assure that education is significantly improved.

It is surprising to some that a large majority of people strongly favor vouchers that would allow them the choice not only of public, but also, parochial or private education.

It is not surprising to me.

The School Choice Scholarship Foundation, which is a privately funded organization offering choice to elementary school students who wouldn't otherwise have one because of the financial constraints of their families, received 22,700 applications for its first 1,300 positions.

This year, it has been expanded to include a total of 2,300 students, most from the lowest performing public school districts. And I will do everything I can to continue to see The School Choice Scholarship Foundation grow and expand as a way of offering more choices to parents and children.

A voucher program established in Cleveland, however, includes allowing parents, poor and middle class as well as affluent, to choose among public, parochial and private schools.

Throughout the nation, the slowness of reform and the resistance of the education industry to put children first are contributing to a stronger and stronger movement of people supporting freedom of choice, including non-public schools. Court rulings on the Cleveland program and others will give us all guidance on the full scope of choice. But to answer the growing frustrations, my advice to the public school system here and throughout the United States is to get as far ahead of the curve as possible.

This includes:

embracing a full choice program within public schools

making more and more schools independent of unnecessary bureaucratic regulation and expense showing a willingness to sacrifice job security for performance evaluations based upon improving the education of children

continually demonstrating improvement in the basics: reading, math, graduation rate, and college admissions

In New York City the reforms should also include the Chancellor and Board embracing the idea of police taking over the 3,000 plus school safety officers so they can be selected, trained and deployed effectively. We cannot make any real progress in education until parents, teachers and students feel that our schools are safe.

As we concentrate on the basics, we must also bring two areas which have been pushed to the fringes bilingual and special education back to the core of mainstream education. For too long, they've been considered apart from the rest of our schools, without any considerable thought about how they truly fit into a performance based system.

Bilingual education should be restored to its original well-intended purpose. It should be allowed for a short period of transition (a year or two at most), with most of this time spent in intense English immersion programs instead of career long bilingual programs with no definable goal. It's wonderful that the people of New York City speak over 200 languages and dialects because language is an integral part of culture and ethnic tradition. I don't want to change that. But at the same time, for our City to reach its potential, we have to be able to communicate with one another in the English language. Otherwise, we're creating a two-tiered society.

Similarly, special education needs to be redefined and restructured quickly, abruptly and humanely, because right now it's clear to people both inside and outside the system that it is simply not working properly. For this fiscal year the Board of Education will spend approximately $2 billion on special education over 20% of its budget. It takes about $6,255 on average to educate a mainstream education student in our public schools, and over $20,500 on average to educate a special education student. Special education is the fastest growing part of our system and an industry unto itself.

To accelerate the reform of special education, I am asking the Chancellor to chair a working group consisting of my former First Deputy Mayor, Peter Powers, the Corporation Counsel, and others to set forth a strategy to rationalize and restructure our system of special education. Our goal will be to return as many students as possible and appropriate to mainstream programs within the next two years and then to recreate a system designed only for the children who really need special education, not the additional thousands who are captives of the special education industry.

Which leads me to the CUNY system, which is in need of even more reform than the public school system and has made no progress in establishing standards. In fact, CUNY's standards are declining.

Only 32% of incoming freshmen at CUNY senior colleges pass the basic CUNY skills tests in math, writing and reading.

Sadly, only 14% of incoming freshmen at CUNY community colleges pass these three tests. These tests are geared to the 10th and 11th grade education standard. That means almost 68% of incoming freshmen and CUNY senior colleges and 86% of incoming freshmen at CUNY community colleges can't read, write or do math at the 11th grade level.

And after what should be a higher education, these students show little progress. The overall graduation rate for the two-year community colleges is approximately 1% in two years.

The overall graduation rate for the four year colleges is now less than 9% in four years.

The trend is alarming.

Since 1980, the graduation rate has declined steadily. Overall, it has plummeted. In the face of this continued and relentless decline, those who were running the system did nothing not a single thing to reverse the obliteration of standards not only of excellence, but of any standards at all.

Unless we act now, we must realize that this will have disastrous consequences for the future of the City.

Open enrollment is a mistake. It should be changed. Its consequences have been cruel. It has created in CUNY students false expectations which the realities of life inevitably leave unfulfilled.

By eliminating any meaningful standards of admission and continually defining down standards for continuation, the entire meaning and value of a college education has been put in jeopardy for the many who are ready, willing and able to meet and exceed higher standards.

For a college to have standards, it must first have an entrance examination which requires applicants to show that they have the basic skill and aptitude to earn a publicly subsidized higher education. And then to sustain the privilege of having others pay for substantial portions of their higher education, students must maintain good grades and meet strict attendance requirements.

Now, immediately, for the next entering class, the CUNY Board should prescribe an entrance examination which demonstrates that applicants can meet and achieve passing grades in the basic subjects of learning. The exam should be competitive and only those with passing grades should be admitted to the limited positions available in the two year and four year programs. These students should be allowed to continue at these colleges only if they continue to pass examinations and meet attendance requirements.

The CUNY board should also now prescribe basic requirements for graduation from two and four year colleges. Obviously these standards should include being able to read and write the English language. And each year for at least the next five years during this rebuilding period the Board should raise the standards for entrance and graduation.

In short, it should rebuild and restore the meaning of a college degree or certificate.

HEALTH CARE

Over the last four years, our progress in education, crime, welfare, jobs and taxes has gotten the most attention. But one of the things that often gets overlooked is the transformation of our health care system.

The turnaround is dramatic.

Between 1990 and 1993, six of the eleven HHC acute care hospitals were not given timely accreditation.

Since 1994, all hospitals have received timely accreditation.

Waiting times for pre-natal care, and for every other category of service have improved dramatically.

All of this has been accomplished with a reduction in staff of over 13,116 positions between FY 1993 and FY 1997 a 27% reduction in overall staffing. [Includes approximately 3,000 individuals moved to FDNY during EMS merger.]

Reinventing government is a phrase thrown around too often.

But Dr. Luis Marcos, the President of HHC, and Dr. Rosa Gil, the Chairman of the Board, are entitled to great credit not just for reinventing HHC, but actually for making it work as intended.

In addition, Dr. Neal Cohen worked with them to create an entire transformation of the state of health care in the City.

My vision in 1993 for the delivery of health care services was to take our muscle-bound, vertical hospital system, which relied on too many hospital beds, and make it horizontal, reaching out to people in their communities. That's the only way to truly service all New Yorkers with the preventative and primary care they need.

We set out to reduce the beds and increase the clinics and facilities in all five boroughs, to reduce use of emergency room visits and increase the use of primary care community offices.

The idea was to break down the system and spread it out into our communities.

It is exciting and fulfilling to see that happen.

In our public hospitals, general care hospital bed use is down 34%, emergency room visits not resulting in admissions are down 10%, and primary care visits are up 40%.

The Primary Care Development Corporation (PCDC) has opened five privately funded facilities with ten under construction and two more being designed.

The results of more efficient primary and preventative care are beginning to be visible. Tuberculosis dropped by 31% between 1994 and 1996. Infant mortality is now at its lowest level in 100 years. And deaths from AIDS dropped 40% last year.

All of this is a source of great pride, making New York once again America's health care leader.

But much more needs to be done.

Since the inception of our public hospital system, New York City has provided its people with a form of universal health care coverage. But now there are much better ways and more flexible ways to provide that coverage. It's called health insurance, and it expands a person's freedom of choice because it gives people the ability to decide to go to a hospital, clinic, health care office or primary care facility.

Today we will undertake to expand dramatically health insurance for the 1.6 million New Yorkers who are uninsured.

About one-third of the uninsured are employed by small businesses with fewer than 50 employees. Many of these businesses are unable to provide health insurance.

To give these employers and employees access to health care, over the next few months we will establish the Citywide Purchasing Alliance, a self sustaining not-for-profit organization, which will service businesses with less than 50 employees.

Dr. Rosa Gil and Deputy Mayor Rudy Washington will oversee the organization of the Alliance, which will negotiate with different insurance companies to make available to small businesses a wide choice of doctors and health plans. Since 500,000 uninsured employees are eligible to participate, and our studies estimate that 60% will do so, the vast purchasing power of the Alliance can reduce the premiums to affordable levels. Continued competition can keep it that way and at the same time assure quality health care service.

The City will assist by providing the seed money for organizational and administrative costs and from time to time helping to subsidize the Alliance. But we expect that in a short time it will be self-supported. When the project is complete, it will give us a strong foundation on which to build and develop other programs to expand health care coverage to more and more New Yorkers.

At the same time, we must also address the health care needs of New York City's children. To this end, we will work with Governor Pataki to make his proposal for insurance coverage for all children a reality.

Today we are also announcing:

The merger of the Department of Mental Health, Mental Retardation and Alcoholism Services (DMH) and the Department of Health (DOH), so that we can combine the strengths and expertise of these two agencies, and continue to build a system that provides more efficient integrated health care coverage.

The initiation of an HHC/ACS project at the Cumberland Diagnostic and Treatment Center requiring chemically-dependent mothers with children in foster care to receive integrated health care and substance abuse treatment in a single location as a mandatory part of their recovery program.

Also we're reiterating our commitment to:

CHILD WELFARE

The Administration for Children's Services is undergoing a radical transformation in which its central philosophy and its organizational structure is being entirely changed.

The main focus of every decision made from the Mayor or Commissioner to the newest (and newly trained) caseworkers handling their first case is that the protection of children comes first.

Only when families demonstrate that they can provide safe and secure homes will children be permitted to return home. When children cannot be returned safely to their homes, they will be provided with alternative safe, loving, permanent homes.

But the agency, at all levels, should err on the side of protecting children.

The changes made by Commissioner Nicholas Scoppetta have been far-reaching and already have achieved much better results.

To respond immediately and effectively to the most serious allegations of child abuse and neglect, we are establishing a new network of comprehensive instant response teams made up of NYPD officers and ACS caseworkers, with additional support from child abuse specialists in the City's five district attorney's offices. Instant response teams will be operational in the spring, with 250 ACS caseworkers and 250 police officers committed to this effort.

Within ACS, the educational requirements for newly hired caseworkers have been enhanced, the training program has been expanded from 4 weeks to 10 months, the entry exams have been made more demanding, and the agency has actually failed prospective employees for not passing the exam. That means this agency is addressing the failure to impose accountability in the past.

Also, the Commissioner has shown the willingness to fire and discipline employees for failing to properly discharge their duties.

In order to enhance ACS's ability to protect children, we're proposing a significant change in the caseworker and supervisory positions. In exchange for requiring greater educational requirements and higher standards of performance, there will be a whole new system of merit pay increases that rewards ACS workers for positive performance and advanced graduate school achievements. For example, to move to the first supervisory position, a caseworker must now have at least 30 credits toward a master's degree in social work or a suitable equivalent. To move to the second supervisory position will require a completed master's degree in social work or an equivalent graduate degree.

Again, similar to the school system, the only way to move from a culture of unaccountability to a culture of performance is to have a system which has both positive and negative reinforcement a system which rewards excellent performance and allows for removal of those who are not doing the job.

Over the next few months Commissioner Scoppetta will also be reforming contracted services to ensure that contract agencies deliver services to children and families in their communities. He will also require that these agencies establish strong links to community organizations, churches and schools to provide a network of neighborhood-based services.

This new plan, a cornerstone of ACS's reforms, will also set much stricter performance standards and promote a level of accountability not previously utilized in the social service area.

As part of this effort, I am asking Commissioner Scoppetta, working with my office, specifically to review and improve the system of kinship foster care, which places children who have been removed from their immediate families under the guardianship of extended family members. In some cases, a kinship foster care placement may be appropriate for a child. However, I am concerned about two aspects of this program namely, the incentives it creates to keep children in foster care, and the continuation of full public assistance benefits to biological parents on welfare who no longer have custody of their children.

I am also asking Commissioner Scoppetta to make sure that kinship foster parents undergo the same scrutiny and review and meet the same eligibility standards as other foster parents.

To go further, it is time to ensure that all social service programs and providers give the City the highest level of performance. Therefore I am also announcing today that I will ask my office, working with relevant agencies, to make all social service contracts subject to strict performance criteria, so that we can make sure all programs and providers are accountable to the City and the people they serve.

The old way of doing things in the City was to provide money for allegedly laudatory purposes but not follow through and ensure that quality services would be delivered. We are changing that philosophy to hold agencies and their providers accountable through strict contracts and external monitoring. The City must understand that when money is not spent accountably, people suffer.

As another part of this effort to introduce real accountability throughout our social service delivery system, ACS will examine alternative methods of contracting in order to remove any existing disincentives to achieving permanent homes for children in foster care. By providing fixed budgets to foster care providers who contract with the City instead of per diem payments, by setting performance goals and outcome measures, and by establishing as the measure of success not the number of children in foster care but the number of children who are in permanent families, ACS will be able to more effectively address the real needs of children.

Another way in which the new standards Commissioner Scoppetta has imposed are helping children is in the area of adoption. ACS and the city can be very proud that in each of the last three years we have set records for adoption. In fact, last year we completed 4,009 adoptions twice the number completed in the entire state of California. But this must now be enhanced. We will undertake any new endeavor, or program, or strategy to increase adoptions for children for whom the Family Court has assigned that goal. Already, hundreds of prospective parents have called our new "Should I Adopt?" hotline.

Finally, a word must be said about the birth of children out of wedlock.

In New York City in 1996, more than 52% of the 126,901 total births were out of wedlock. 11,818 of these babies or nearly 18% were born to teenage mothers. In fact, over 90% of births to teenagers were out of wedlock.

The reality is that a child born out of wedlock is three times more likely to fail at school, three times more likely to commit suicide, and 20 times more likely to suffer child abuse than are the children of low-income married parents. The incidence of child abuse increases to 33 times more often if the parent has a live-in unmarried partner.

Children born out of wedlock to teen mothers are more likely to be born prematurely and at low birth weight, have lower grade point averages and poorer school attendance records, are four times more likely to be expelled or suspended from school, and are three times more likely to be on welfare when they become adults. 70% of long-term prisoners and 75% of adolescents charged with murder grew up without fathers.

This isn't rhetoric. These are realities.

Our City and our nation must re-establish the responsibility that accompanies bringing a child into the world. But government can't do it alone.

Government can, however, make the point more effectively that if you are a parent, you are responsible for your child. Government can ignite a more complete movement in society to reaffirm the responsibility of bearing a child.

Our Work Experience Program will be opened up to include parents, particularly fathers not paying child support. Deadbeat parents who refuse to either participate in WEP or take a job in the private sector so they can meet their support obligations will risk incarceration.

Last year the City collected over $256 million from deadbeat parents, mostly fathers, and this year we expect to collect even more. But realistically recognizing and discussing the consequences of out-of-wedlock birth will also help make the message clear, especially to our young people.

WELFARE REFORM

The change in direction over the last four years and the change in the philosophy of the City is greater and more precipitous than at any time before.

Nowhere is that more obvious than in welfare.

In 1993 New York City was seen as the welfare capital of America.

Over 1 million people were on welfare, with projections that this number would reach as high as 1.2 to 1.5 million people.

The response of the City administration at the time was to do nothing except ask the federal government for more money to subsidize continued dependency.

And many of the politicians who sat by and watched welfare grow and grow watch dependency engulf a new generation were described as "progressive."

All through 1994, we shaped a welfare reform program based on eligibility and work. It was motivated not by wanting to be called "progressive" but instead to bring progress into people's lives.

It did not cut benefits to those actually eligible.

It reestablished the social contract in the lives of people and then the whole City.

The social contract means that for every benefit, there is an obligation, for every right, a duty. It is one of the building blocks of democracy but for too long, it didn't apply to welfare.

A truly progressive society is one in which increasing numbers of people can take care of themselves and then, as a result, take care of others.

A progressive political philosophy is one that improves the quality of people's lives, not one that fosters dependency, rationalizes deviancy and encourages educational failure.

Today our welfare reform program has reduced the welfare rolls by 340,000 people. We have removed more people from welfare than the entire welfare population of Wisconsin.

And 200,000 people have moved through our workfare program, from dependency toward self-sufficiency.

In 1967 our welfare rolls hit 800,000, and they have remained at least 800,000 every year since then sometimes reaching as high as 1.1 million.

Sometime early this year, we will go below 800,000 people dependent on welfare for the first time in 30 years.

As one political pundit told me, only in New York City would 340,000 fewer people dependent on government welfare be a negative story.

It's because of our distorted notion of what is progressive in this City a distorted notion that is beginning to give way to a more sensible and truly compassionate philosophy. The real meaning of compassion is helping people to move themselves to self-sufficiency not making them dependent on government.

I want to read you a quote about self-sufficiency: "Continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit."

Who do you think said this? Newt Gingrich? No it was Franklin Delano Roosevelt, in his 1935 message to Congress.

Now it's time to make this transition toward self-sufficiency permanent by another change in philosophy. We are going to restore work and the work ethic to the central place it used to have in our City.

All welfare centers will be renamed as job centers.

New signs will go up to tell every applicant for public assistance that the goal of this agency is not to maintain people on welfare but to provide the opportunity for work.

A permanent job is better than a temporary one, and both are better than work in the WEP program. But work in return for benefits is better than doing nothing for the money.

Remaining in the workforce is better than letting people drop out of the discipline of work for months, years and sometimes a lifetime. The consequences for them, and their children, are disastrous.

We will establish a universal work requirement for everyone receiving benefits. Other than for severe disabilities, there will be few exceptions.

The success of job centers will be determined not by the number of people maintained on welfare, but by the number of people who participate in work.

To make this possible, we will continue to expand day care so that adequate arrangements can be made to care for the young children of working parents.

Under this new work program, all persons seeking public assistance benefits will be expected to look for work during the time they are in the application process.

Private staffing companies (i.e., temporary employment companies) will be used to provide immediate work in the private sector using wage subsidies as an alternative to cash benefits.

Most importantly, the measure of success will be changed. The new "job centers" and private agencies under contract with HRA will receive part of their administrative budget based on their success in moving families and individuals to self-sufficiency.

By putting HRA and private agencies in competition, we will open up large segments of the private sector to expand vastly our capacity to find people immediate temporary work and long term permanent jobs.

The success we have already had with companies like Macy's and the GAP in the private sector, and Local 372 in the Board of Education (Lunch Workers, Paraprofessionals, School Aides, and Crossing Guards), gives us a strong model on which to build. But it must now be vastly expanded.

However, the single most important reason people do not succeed in work programs is substance abuse.

So as part of our massive effort to reduce drug abuse, we will put special emphasis on programs designed to not only deal with the rehabilitation of drug addicts but also to incorporate work experience as an early and consistent part of their treatment on the road to recovery.

Work must become a core part of treatment very early in any long-term rehabilitation program.

The whole idea is to reverse the prior philosophy of the City, which maximized dependency.

We want to keep in people's lives the discipline of getting up in the morning, getting dressed and going to a job.

Not because we love people less, but because we have progressed to loving them more deeply, more maturely.

This new philosophy is based on respect rather than guilt respecting people enough to give them an ongoing sense of their ability to take care of themselves.

And as that grows, so does the number of people who can take care of others, including their own children.

RESTRUCTURING OUR ECONOMY

The whole purpose and approach of my administration has been to restructure our economy in New York City to revitalize the private sector and make the role of government supportive rather than intrusive. To make us a pro-business city because encouraging business growth means encouraging job growth.

The city budget, taxes, incentives to businesses, and business regulations must all be viewed from the perspective of how they all are working together to create more jobs.

This means we should cut taxes but not all taxes, and not all at once because indiscriminate cutting of taxes would make it impossible to also maintain the City's most effective economic development program, crime reduction and improved quality of life.

We will therefore proceed in the future by using this balanced, moderate approach, designed to embrace targeted tax reductions and incentive programs which give us the most jobs in return.

We will also continue to use the philosophy we introduced in 1994 regarding the budget and as we debate surpluses, now at record levels. We'll continue to use a sensible three-part approach without letting ideology dictate too much emphasis on any one of these three. Surpluses should be used to:

Without ever promising to lower or never to raise taxes, already we have brought about the largest tax reductions in the city's history $1.1 billion.

We have reduced or eliminated 16 separate taxes. The tax burden as a percentage of overall income for New York City residents is the lowest it has been in over 27 years and is headed even further down.

We have already secured enactment of another $500 million so the total returned to the private economy is over $1.6 billion.

This includes further reductions in the unincorporated business tax, the remaining commercial rent tax, and with the assistance of Governor Pataki's STAR Program, further reductions in the property tax, co-op and condominium taxes, and income tax.

When I present the City's four year financial plan at the end of the month, I will outline additional reductions which can now be accomplished as well as additional savings which can be used to reduce the City's out-year gaps.

But there is one tax reduction that is a priority, and it needs to be mentioned now because we have another chance from January 17 through January 23 to convince the State to eliminate it entirely.

I'm talking about the sales tax on clothing and shoes. For that period, the tax will be removed on clothing and shoes of $500 or less.

I am recommending eliminating it entirely to create more jobs.

This will enable us together to make our transition from the welfare capital to the work capital permanent by funding the best social program ever invented a job. Instead of 8.25 percent of every clothing purchase going to government, let's keep that money where it belongs, with our families and businesses, so they can make the choices that make sense for them. That will create more economic activity, more growth, and more jobs.

The way to send this message to Albany is to shop 'til they drop the tax and help us recapture a large portion of the $3.5 billion we lose to surrounding counties and states.

Just because New York City is the biggest city in the country and the Capital of the World, we shouldn't have to pay more.

That's why we will once again revive our proposal for rezoning of the City to allow the development of more retail space.

Did you ever wonder why in some poorer areas of the city, food and clothing cost more than they do in some of the more affluent neighborhoods?

Did you ever wonder why food prices are less in areas surrounding our City?

Much of it has to do with the supply of goods being artificially constricted by the lack of retail space, even though demand is greater here than any place else in America.

We will once again work with the City Council to see if we can reach an agreement which will allow for the significant expansion of retail space in our City.

If we can do both drop the tax and increase the retail space we can recapture billions of dollars in business.

It will provide exactly the major surge in jobs that we need to make permanent the movement of this City from a welfare city to a work city, from a dependency city to an opportunity city.

There is, however, one tax which we've reduced of which I am the proudest.

So far, by pushing the Mafia out of the carting business and reestablishing competition between legitimate businesses, we've restored over $400 million to the private economy and over the next two years we will restore over $650 million.

This tax is the best of all to eliminate because it was not used to help pay for safety, education, health services or any other important government function.

Rather it was used to finance drug trafficking and other illegal operations.

We will continue our historic effort to remove organized crime from our City and add to our success in the carting industry, the San Gennaro Festival, and the Fulton Fish Market by confronting the Hunts Point Market, and the construction, air freight and garment industries.

REBUILDING THE CITY

To ensure future success, we must continue to improve the quality of government in our City not only for this administration, but to institutionalize our changes so that future mayors and commissioners can always advance the City.

We will continue to press our case to have New York run its own two airports without New Jersey as a partner.

The profits derived from Kennedy and LaGuardia should not be siphoned off to subsidize a PATH fare of $1.00.

We will press ahead with our arbitration against the Port Authority. We will also further our efforts to have New York City extricated from partnership with New Jersey in running the City's airports by supporting a referendum and local law that would preclude the City from renewing the Port Authority lease when it expires in 2015 and would establish a New York Airport Authority to take over management of the airports when that lease expires.

In a 1994 survey comparing 38 major airports, LaGuardia ranked 35th and Kennedy ranked 37th in overall customer service. And in a survey conducted last year by the International Air Transportation Association Airport Monitor, JFK ranked 45th out of 54 airports worldwide in overall passenger convenience for international travel. Neither airport has shown major improvement since then. It's time to turn them around.

To build on the progress we've already made in turning around New York City from a business-hostile City to a business-friendly City, at my inauguration I announced our plans to create a task force designed to reduce the number of both taxes and regulations that still burden businesses, impeding economic development and hampering job growth.

Since then, due to the cooperation of Commissioners Joe Rose, Gaston Silva, Joel Miele, and Tom Von Essen, working with my office, a preliminary proposal to eliminate, modify, or improve 62% of the 456 City rules relating to construction is under review. We will expand this review to all City agencies.

In order to make sure that our City government remains responsive, I will also establish a Charter Revision Committee with a broad agenda to review and improve the City's sometimes onerous procurement and land use procedures; the role of City officials and entities to make sure that government is operating at a high level of efficiency; the reporting and other requirements that hamper New Yorkers by diverting agencies from their primary mission of service delivery; and other matters to improve the workings of City government. I am today announcing that Paul Crotty, my former Corporation Counsel, will be the committee's chair.

And we will press our argument for non-partisan mayoral elections and for banning corporate contributions in city elections.

In addition, there are several projects of central importance which must be re-emphasized so people understand our priorities for the next four years.

We will close the Fresh Kills landfill, and continue to expand prevention, recycling, and shipment of waste outside the City.

We will allow for a full and complete expression of interest in Governor's Island and the Staten Island Homeport so the free market of ideas can lead to sensible, cost-effective development plans.

We will move forward with a plan for a direct rail link from Manhattan to LaGuardia and Kennedy Airports.

And there are two other endeavors that deserve a great deal of attention.

First, we will move forward with the freight rail tunnel and hub port a critical economic development initiative for the entire region. Last year, I pointed out that the Port Authority was originally formed in order to build this tunnel. It never did.

But it's still very necessary. Since last year, we have received federal funding to finance a cost and design study for creating the tunnel and hub port. We issued a formal request for proposals and, in response, have received proposals to conduct this study. In late February, the City will select a team to conduct the study and, based on their recommendations, we will move forward with planning and building both the tunnel and hub port.

Second, we will continue to push in court and in the City Council for legalizing private vans. The City Planning Commission study shows that the City can easily accommodate 1,000 vans to serve our communities.

If you wonder why there are too many unregulated vans, it's because of the worst kind of fear the fear of competition which has led to the City Council's moratorium on developing legitimate van lines. The City's Department of Transportation and its Taxi and Limousine Commission are ready, willing, and able to move forward with giving licenses to legitimate vans meeting all insurance and safety criteria.

The moratorium is based on a fear of competition with public transportation. It is depriving a lot of good people with the unique American entrepreneurial drive from realizing their dream.

But we're still dreaming with them. We're still fighting by their side. And we will succeed in rallying the people of this City to their cause and lifting the moratorium.

BUILDING MONUMENTS

Still, some people say, "Well, a great deal has been done to change safety, quality of life, welfare, taxes and job growth and education. But what building has been done? What lasting monuments will be left by your administration?"

Let me outline a few.

Times Square. Remember where it was four years ago?

Remember when Michael Eisner and then-Governor Cuomo came to City Hall in 1994?

At the time, all the cynics said, "The City has been supposedly rebuilding Times Square for years. It won't happen. It can't."

Tell that to the families who are now seeing The Lion King and Ragtime on 42nd Street.

Times Square is now a symbol and a reality of urban transcendence rather than decay.

The partnership between the City and the State, which has been strengthened by Governor Pataki and Charles Gargano, means that we will have a shared legacy of buildings and beauty and jobs for all of us. It means we've recaptured and re-established the Crossroads of the World just in time for the millennium celebrations on December 31, 1999.

I look forward to it.

But what is happening on Times Square is also happening on 125th Street with the introduction of national business operations for the first time ever, and the enhanced expansion of local businesses.

It's happening in the Bronx with the $35 million expansion of the Hunts Point Market.

It's happening in Brooklyn with the Renaissance Plaza, which includes the first hotel being built in Brooklyn in 50 years, which is ready to open in May. That follows the Atlantic Center, the new Fire Department headquarters at Metrotech, and everything else contributing to the re-development of Downtown Brooklyn.

It's happening in Staten Island with the Visy Paper plant, the first new manufacturing plant opened by a major manufacturer in New York City in more than 50 years.

And it's happening in Queens, in the exciting Queens West development in Long Island City, and in the resurgence of the economic and cultural life of Jamaica, Queens including the Jamaica Center, a retail and entertainment complex with a 15-screen multiplex movie theater and 130,000 square feet of retail space that represents the largest private investment in downtown Jamaica in 35 years.

We are committed to leaving monuments to our era monuments that reflect the success and hope that many New Yorkers feel today.

Once the Mercantile Exchange was on its way to New Jersey. Now it's a new building in the World Financial Center.

For 15 years, the "Living Memorial to the Holocaust" was in the planning stages but floundering. Now it's a reality. It opened a few months ago in Battery Park and adds an important new museum to our City.

For the future we look forward to assisting: a

All of these buildings and monuments also add to the architectural luster of the world's most fascinating and beautiful city.

CONCLUSION

One of the extraordinary and unique things about New York is that it is not a planned city.

A Commissar of Planning did not devise New York.

Nor was it built according to an original general scheme or overall organizing principle like Washington, D.C. or Paris.

Yet it is better known and more successful than either of those cities, great and beautiful though they are.

And its beauty and power emerge because it has always allowed scope for human creativity and genius.

To secure the legacy of New York City, we must create lasting beauty in our midst and leave it for future generations.

Several months ago, the Coliseum project was going to go forward without including development of a major new performing arts center. The City withheld its support. Now, I'm proud to report that all bidders and participants have agreed that there will be a major new performing arts center on that site. This will allow us to expand the breadth and reach of the Lincoln Center area as the capital of music and dance.

We will provide for the Broadway Initiative so that our greatest tourist attraction, our great creator of jobs and commerce, and a defining center creating much of the culture of our day can expand. The Broadway Initiative can help provide the assistance for the building of two or three more new theaters, the modernization of older ones, and the assurance that the New York theater district will remain the most famous in the world.

We also want to see a museum developed right at the modernized Staten Island Ferry terminal so that those who use that ferry, the thousands and thousands of tourists and others, can add luster and beauty to their experience.

As you know it is in the sponsorship of art and culture that the great cities of antiquity defined themselves.

And this wealthy and prosperous city of ours is now doing that more effectively than ever before.

We have added funding for the Cultural Challenge to help our large, medium and small cultural institutions flourish.

Why do you think we are restoring arts education to our schools? Because beauty is ennobling. It lifts us up and inspires us to be our best selves, and the best City we can be. And to further enhance our plan to restore arts education, we have received a wonderful offer from the Metropolitan Opera to vastly expand their involvement with our schools.

And we will seek in every way we can to expose our children and all of our citizens to experiences of beauty so they can recognize the uniqueness of their humanity and contribute to the existing beauty that already surrounds them.

The skyline of Manhattan, not planned, is a natural wonder of the world created by human beings.

It keeps changing but it continues to exude power, majesty, diversity and beauty.

It soars to the sky and reminds us all of the possibilities of human genius.

It literally shows us the heights to which we can aspire.

It reminds us that it is in the life of the spirit that we make our biggest contribution.

The life of the spirit our architecture, art, culture, philosophy, religion, literature, music, and dance has always defined New York. And the life of the spirit is within each one of us.

It is the obligation of government, therefore, to provide each individual with the opportunity to strive to become his best self, to enrich his own spiritual life. That is the only way to make New York City like Manhattan's skyline always changing, innovative, and striving to fulfill its potential. Like the buildings of our skyline, our people must always reach higher.

When we discuss improving the quality of life of New Yorkers, this is what we mean enabling each one of us to strive to become our best selves.

Quality of life is an ongoing process it's not about reaching a destination. And the basic message of quality of life is that we can never settle for what we have achieved.

Only by constantly reasserting our commitment to this process can we fulfill the oath we said together on New Year's Day to transmit this City to future generations greater and more beautiful than it was transmitted to us.

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