Liu touts importance of MWBEs, DOE audits 1

John Liu speaks at the Community Board 12 meeting on Sept. 19.

Comptroller John Liu is not afraid to speak his mind, especially when it comes to how the city spends its money. He attacked the Bloomberg administration last week for its alleged lack of ethnic diversity when awarding contracts, and named the Department of Education as his top auditing priority, since the agency accounts for one-third of the city’s budget.

“Since I pay all the bills and I sign all the checks — $70 billion worth of checks a year — we put together our own analysis and we looked at exactly where the money was going and how much of it was actually being paid to minority entrepreneurs,” Liu said at the Sept. 19 Community Board 12 meeting in St. Albans. “The percentage is shocking.”

Before Liu took over as comptroller, only 2 percent of city contracts went to minority and women-owned business enterprises, but since he implemented a report card system, it has increased to a little over 3 percent, which he said is still very poor, adding that the city’s excuse for the low numbers is even more appalling.

“It would almost be better if they stopped at that and accepted the criticism that there is a shocking lack of diversity, but the mayor’s folks take it a step forward and pour salt on the wound, by saying we don’t look at that, we only consider merit,” Liu said. “As if in this city of 8.5 million, you can’t find merit in the diverse communities that we have. They’re just not looking. That’s the problem.”

For years, while Liu was a member of the City Council, he asked the city for hard data regarding how much business was going to MWBEs and he said they refused to provide it. Then he asked again as comptroller “and much to my shock they refused to give it to me as city comptroller,” he said.

That’s why the grading system is important, Liu said, and he noted that small up- and-coming minority companies typically have a strong track record of hiring people from the community who need the work.

“So we would be able to not only reduce our overall unemployment, but start chipping away at some of these historical disparities where communities of color face much higher unemployment rates, not because people in those communities can’t do the work or are unqualified, but because they don’t get the opportunities that they should otherwise be entitled to,” Liu said.

The city’s chief financial officer went on to talk about the economic recession, calling it the worst financial crisis since the Great Depression and saying it is not enough to restore the economy, but rather there must be “a restored prosperity that is shared, not by just the top few, but by everyone in the city.”

In order to do that, Liu said, new fiscal and tax policies have to be implemented, including changing city income tax rates from flat to progressive the way they are on the federal level, meaning the more money you make, the higher the percentage you pay. “Because then you have that much more at stake in the success of the country, in the success of the state, in the success of the city,” Liu said.

Families that make $50,000 a year are paying essentially the same tax rate as families making millions of dollars a year. “The average city employee pays the same rate of tax as Mayor Bloomberg does,” Liu said. “This is not a progressive income tax system that we have here in the city.”

He proposed that the top 1 percent of earners, meaning those who make over $500,000 a year, pay 1 to 1 1/4 percent more on their city income tax and that the additional revenue raised could go toward a tax reduction for the other 99 percent of city taxpayers, with enough left over to clear up some of the city’s outstanding future projected deficits.

With so much of the city’s budget going to the DOE, Liu is paying close attention to the agency’s spending. It wasn’t until August of 2009 when the state Legislature changed the mayoral control of schools law that the city comptroller’s office was empowered to look into contracts and other financial transactions by the agency.

“No one could touch them,” Liu said. “Well, we can touch them now, and we’ve been touching them, and I think they’ve been feeling the love.”

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