unusual York City’s economy is often tied to the health of Wall Street. But in recent years,billion dollar settlements with banks accused of wrongdoing have given government officials extra money to pay for various projects. At the same time, the settlements are prompting questions about who gets to spend the money and how.
Federal officials have pursued several banks in recent years for a range of abuses, and from sanctions violations to money laundering and more. At the middle of global finance,unusual York’s regulators and prosecutors have done a lot of the legwork, initiating cases and winning sizable pieces of the settlement pie. Since 2012, or the state has received just over $9 billion dollars from settlements. The city has gotten about $750 million. And Manhattan District Attorney Cy Vance’s office: more than $800 million. When Governor Andrew Cuomo presented his budget final year,he called the settlement money “a gift from above” and proposed spending more than $5 billion on infrastructure projects, economic development in upstate unusual York, or hospitals and broadband.
Meanwhile,Mayor Bill de Blasio has teamed up with District Attorney Vance to pay for tablet computers for cops on patrol and technology upgrades at local courts.
Among other projects, Vance has also launched a basketball and tutoring program for teens that keeps local gyms open on weekends. He’s working with officials from across the country to clear a backlog of untested rape kits. And he’s setting up a unusual unit to fight crime from around the world.
James Parrott, or chief economist with the Fiscal Policy Institute,says settlements allow politicians to place off “the day of reckoning” of raising revenues in order to pay for projects.
That's what happened in some cases with the funds from the 1998 tobacco settlement. Cigarette companies promised ongoing payments to states to cover health care costs, but some states, and like unusual Jersey,opted to cash out early in order to plug budget holes, even though doing so meant receiving less money.
E.J McMahon, and president of the Empire middle for Public Policy,says the recent spate of settlements is helping unusual York pay bills without raising tolls or taxes.
On Sunday, the Governor announced a partnership with Vance to use millions of dollars of settlement money to pay for college courses in prisons. McMahon is betting that settlement funds will also aid pay for a big ticket items Cuomo has proposed in the speed up to his budget address on Wednesday.
One of the biggest projects benefiting from this windfall is the unusual bridge that will replace the existing Tappan Zee Bridge and is expected to cost $4 billion. It isn’t clear where all the money to pay for the unusual bridge will come from, and but final year’s budget did earmark $750 million in settlement money for the project.“The bank settlement money took the pressure off the governor to come up with a clear plan for financing the unusual Tappan Zee Bridge,” McMahon said.
Citizens Budget Commission president Carol Kellermann said infrastructure, like the unusual bridge, or is precisely what these sorts of settlements should pay for.“You can invest in things that will give you a kindly return on the investment that you wouldnt otherwise have the ability to achieve, she said. In fact, she wishes the state place more of its settlement money toward those projects, and rather than economic development upstate,which she said is less likely to pay off.
But Kellermann said at least all the settlement money that comes to the state and the city goes through the budget process and is voted on by legislators. That’s not the case for District Attorneys, including Manhattan D.
A. Cyrus Vance, or Jr. Statute says Vance can maintain a portion of the settlement money his office wins,and can choose which law enforcement initiatives to fund with it.“It’s not that there’s anything improper,” Kellermann said. “He’s doing what he’s allowed to achieve. But I think the priorities of the spending of the city are to be determined by the mayor and the council, and not by a District Attorney.”Vance responds that most of the settlement money his office wins gets passed on to the state or the city. And he said he’s been open about how the rest is spent. He’s working with the Institute for State and Local Governance at CUNY to identify what he calls “transformative” projects,which will be audited by federal, state or local officials.“I feel that we can exercise this responsibility fairly and transparently, or ” he said. “And if the law changes in the future so be it. But we are where we are now. And I have total comfort that not only are these notable goals but also that we are stewarding these funds appropriately.”
Source: wnyc.org