April 27, 2005

PILOT errors

As you may recall, the last time the New York mayor's office was asked to testify on why Mayor Michael Bloomberg thinks he can spend city payments in lieu of taxes (PILOTs) on a Jets stadium without city council approval, they sent a guy who didn't know the answer. Yesterday, city lawyer Michael Cardozo finally showed up to testify - and testify, and testify - on the matter of the PILOT slush fund. According to Stephanie Greenwood of Good Jobs New York, who claims to have actually stayed awake for the entire hearing, this is what transpired:

Cardozo testified for a very long time, trying to convey to the Council that he thinks PILOTs are not revenue at all but rather private property, in the form of the right to receive future revenue streams, pursuant to a contract. And that the charter and state law give the Mayor the right to dispose of city-controlled private property as he sees fit for the benefit of the city.

Here's the interesting thing though - he seemed to say that PILOT agreements between the IDA and companies getting the tax break contained specific directions on how the PILOT payments would be allocated. And they just don't. At least, none of the fifty that we have does. Which raises questions about how the funds can be considered tied up "pursuant to contract" and therefore Not Revenue At All in the meantime.

There were no satisfactory answers about the logical limits of Cardozo's argument. What about airport lease revenue? The council claims to have identified over $1.2 billion in revenues currently received that are "pursuant to contract" and therefore maybe divertible by the Mayor at will. Cardozo basically said, well, this is how we've done it and if you have a problem with that, take it up with the State Legislature or with the Charter itself.

So the saga continues. No doubt in court...