Brooklyn's Progress
June/July 2007

BY JILL SHEEHY

New York City Mayor Michael Bloomberg and City Council Speaker Christine Quinn recently agreed on a 2008 $59 billion operating budget for the city, one that was met with the requisite fanfare that a $4.4 billion surplus can be counted on to bring.

The budget includes $1.3 billion in property, sales, and small-business tax cuts.

The good news continued for the economy, as the budget also takes a long, hard look at sustaining the current boom. According to the Mayor’s Office of Management and Budget, some of the City’s selling points included:

• The City’s labor market grew by 62,000 jobs in 2006, 7,000 more than estimated in January.
• The commercial real estate market has tightened, leading to vacancy rates below 6 percent, rising rents and record sales.
• Wall Street surged in the fourth quarter of 2006, generating profits of $7.6 billion and posting $20.9 billion for the year, double the profits of 2005.
• A record 44 million tourists visited the City in 2006.

All this adds up to a ripe economy, provided the one caveat – the real estate boom – levels out gently, as is expected in New York City. Residential sales have not faltered as they have in the rest of the country, and developers are adjusting their commercial space plans accordingly, so as to not be left with growing vacancy rates.

Less Taxing
There is also news on the tax front. As first announced in January, the Bloomberg administration created a plan that will help aid job creation with strategic tax moves, such as doubling the deduction for double partnerships, installing a 50% increase in the resident PIT/UBT credit, creating an additional credit to aid S-Corporations, and simplifying tax filing for smaller firms.

The Mayor will continue doling out $400 property tax rebates and as of July 1, all clothing will also be exempt from the City sales tax.

Small Business Help
The City’s economic development programs have been administered by the Department of Small Business Services (SBS) and the Economic Development Corporation (EDC) since 1992.

The SBS will be getting $35.6 million more than last year to continue their work, but while their total appropriation is $112.7 million for the year, the latest 2008-2011 capital plan calls for a total investment of $899.5, which is $471 million less than earmarked in the 2007-2010 plan. EDC, on the other hand, is mostly funded through a real estate portfolio.

KING'S RANSOM
Capital funds slated for Brooklyn

• Brooklyn Navy Yard - $168.6 million
• Rehabbing cruise ship terminals - $152.41 million
• Coney Island’s infrastructure (as part of the bigger Strategic Plan) - $111.9 million
• Redevelopment of the Atlantic Yards - $100 million
• Redevelopment of Downtown Brooklyn - $96.1 million
• Development of the Brooklyn Academy of Music Cultural District - $74.9 million

Source: New York City Office of Management and Budget