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June 5, 2006
One Last Word On New York City's Finances

The cuts to the DHS grant program of 34% from fiscal year 2005 have created a wailing and gnashing of teeth in New York, where elected officials have made accusations that DHS chief Michael Chertoff has "declared war" on the Big Apple for cutting UASI funding by 40%, along with Washington DC. The DHS did not help its case when their evaluation of the city's application resolved that NYC had no monuments or national icons, although as Newsweek reported yesterday, that description unfairly portrayed the analysis:

The "risk" score sheets, based partially on classified data that included "suspicious incidents," "FBI Cases" and "Intelligence Community Reports," said New York had no "national monuments and icons," four "banking and finance" institutions with assets greater than $8 billion and two nuclear facilities. (The D.C. region was rated as having 18 monuments or icons, 2 major banking or finance institutions and 7 nuclear facilities.) "It's outrageous that these bean counters don't think the Statue of Liberty, Brooklyn Bridge and Empire State Building are national monuments or icons," said Jordan Barowitz, a spokesman for New York Mayor Michael Bloomberg. Homeland Assistant Secretary Tracy Henke, a former GOP Senate aide, told NEWSWEEK that, in the Feds' assessment, the Empire State Building was counted as a tall building and the Brooklyn Bridge as a vital transportation facility. (The Statue of Liberty was counted as a New York state, rather than NYC, asset.)

In fact, the article makes clear that the DHS used a team comprised of dozens of state and city homeland-security officials who reveiwed the applications and provided as rational an analysis as possible. The resulting funding decisions, made with a budget reduced by a third from FY05, did cut NYC's UASI grants by 40%. However, that had the effect of cutting NYC's share of the total UASI outlays from 25% to 18% -- still giving Gotham by far the biggest slice of the pie. Los Angeles moves up to second place with 11.3% (8.35% FY05) and DC (6.5%, 9.3% FY05) drops below Chicago (7.35%, 5.4% FY05) for fourth place. This appears to be reasonable based on population centers, and one could argue that Los Angeles may have required a bigger portion of the funding due to the size of the territory. And when one looks at the DHS grants by state, which includes UASI spending, New York has substantially the same share of the reduced budget as it did last year (10.9% FY06, 11.8% FY05).

The picture becomes even more clear when one takes a look at the annual budget for New York City, a $53 billion behemoth that already soaks up more than its share of federal grant money. For FY06 alone, federal categorical grants came to $5.6 billion dollars, or about sixty-seven times what the DHS cut from the UASI grant program for the city. Federal and state grants comprised 28% of the revenues for New York City in FY06. In fact, from FY95 to FY05, federal grants to NYC grew 41%, a substantial portion of which came from 9/11 abatement aid. State grants rose 37% during the same decade. However, not all of the federal grant money came from security concerns; education grants rose 71%.

For purposes of comparison, the state budget of Minnesota comes to $32 billion -- for two years. Take a look through the detail of our biennial budget and see if you can find federal grants in any significance. We will receive about $10 million over the next two years for DHS grants, but if we total $500 million during that period in federal grant monies, I can't see it anywhere. And Minnesota not only has a population approaching that of NYC (6 million vs 8 million), but we also have had several high-profille terrorism arrests, centering on our burgeoning Muslim population.

New York City, far from being "disarmed" as some would describe it, still has a huge chunk of the UASI grant funds. The state of New York has its share of overall DHS funds. And anyone who can argue with a straight face that the federal government neglects New York City is either a demagogue or an economic illiterate. (via an anonymous CQ reader)

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Posted by Ed Morrissey at June 5, 2006 5:33 AM

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