Is the Blue Tape Really That Bad?
Yes, but the picture is sunnier and more complicated than you might expect // The tale of the Financial Control Board's city contract review thresholds
There’s an increasing amount of commentary that boils down like this: “Blue states (especially New York) cannot build the critical infrastructure they need—and say they highly value—but red states who don’t even pay those things much lip service can.” The salient example is Texas outcompeting California on solar installation.
I wrote in “Call It Blue Tape”:
These states must re-learn to build the basic staples of material comfort and civilizational advancement, or else they will lose the future to states that do. They must embrace results over precious ideologies. They must embrace growth and opportunity.
And yet: life on the ground in New York City is pretty good. I wake up every day happy to be a resident of the five boroughs. The city is solving its trash problem, to approximately no fanfare. We’re tentatively turning the corner on housing production, even as there’s still much work left to do. Congestion pricing, however imperfect its path to existence or implementation, is working. I could go on.
So how do you square these two different pictures? New York can’t build, and also things are getting better?
The answer is that it’s both. New York is making a lot of headway in many areas, and falling down on the job in others. Government and law are a huge, complex system, and the headlines most people have seen are a small fraction of a percent of what’s actually going on, for better and for worse.
This is unfortunate news for anyone who wants to construct a decent mental model of “how New York is doing.” It is not easy! I think a good place for most people to land is a dual acknowledgement of two things:
Bless our glorious civil servants who keep the machine running. Many things are improving behind the scenes (in ways most people will never hear about in headlines) because the government is filled with dedicated, intelligent civil servants. Their work is imperfect, but it moves us forward. We can only hope to join or help them, to be thankful that they do thankless work, and admire them in the meantime.
The civil servants are losing (or not yet winning) due to bad law, and they need our help. New York State has accreted a convoluted mess of bad law, undergirded by bad ideas, that prevent the government or private industry from building things quickly, on time, and under budget. These macro errors swamp the gains made by our civil servants by a wide margin. The effect is that New York City keeps humming, New York City and State’s budgets keep increasing, but both will lose immense political power, relative population, and more. And their citizens are robbed of an alternate future where they have newer, more affordable housing, new subway lines, and a generally much higher quality of life than they have now. When the subways were first proposed more than 120 years ago, they faced massive opposition—thankfully the subways prevailed. But today, we live in the world where those same anti-building forces have been winning. If you are horrified to think about New York City without the subways, realize that you are currently living in a world that is being similarly deprived today.
In other words: we’re doing well on a lot of small and medium things, we’re whiffing it on the large things. So the net achievement is still negative.
But I am not a pessimist. New York can change, it is changing, and we can speed up the change. I’ll end with a concrete example of a good change that you have never heard about. Realize that there are many just like it.
The civil servant’s unsung success: capital project review timelines being sped up
Picture it: the year is 1975, and New York City has just narrowly escaped bankruptcy. This city itself was unrecognizable to the modern eye, with about one million residents having recently fled, thousands of buildings abandoned en masse, crime through the roof, and the deterioration of its civic gems like Central Park.
In response to the city’s fiscal mismanagement, the state government imposed a variety of controls to ensure that 1975 would never be repeated. One of those was the creation of the Financial Control Board in 1975, which was charged with reviewing the city’s finances:
The New York State Financial Control Board was created by the State Legislature in September 1975 pursuant to the New York State Financial Emergency Act of The City of New York (the "Act"). The Act gives the Control Board powers and responsibilities of review and oversight with respect to the financial management of the New York City government and certain related public authorities.
Who sits on this board?
Membership on the Control Board consists of the Governor (Chairperson), State Comptroller, Mayor, City Comptroller, and three members who are appointed by the Governor, with the advice and consent of the State Senate, and who serve at the Governor's pleasure. Various elected officials of the State and City are entitled to appoint non-voting representatives to the Control Board. The Control Board acts by majority vote of the entire seven-member board, each of whom has one vote.
One thing the FCB does is review city contracts over a certain dollar threshold, and since 1986 many contracts over $10 million had to undergo a separate FCB review alongside a city review. Naturally, this increased the amount of time to complete the contract and get results. But the real problem is that the contract dollar threshold that triggers review hadn’t changed since 1986. In the meantime we had inflation, and the city budget had expanded 5x. This means a far larger amount of contracts were being caught in the double-review process, far more than originally envisioned.
So after Mayor Adams was elected in 2021, he convened the Capital Process Reform Task Force, led by then-First Deputy Mayor Lorraine Grillo. One of the changes they sought was an upward revision of FCB contract review thresholds, which they achieved effective January 1, 2023. The review thresholds all went up 5x, which means many contracts only need to go through one round of city review. Great!
Contract delivery moved up a few weeks. Many other changes like this occur all the time, even as part of the same set of revisions made pursuant to the Capital Process Reform Task Force.
Of course, one could react to this by noting that the contract review threshold remained static since the 1980s, and should have been caught well before 2022. Yes, true. But it was caught, and many things like that are continually being caught and fixed without anyone knowing.
New York City and State’s government and law are huge and old. We need way more eyes on them, in addition to different people in elected seats to respond to what those eyes find.
The government is often not just illegible to citizens, but it is illegible to itself. Brand Lander, before he was the city comptroller, was a member of the city council. While on the council, he prioritized improving the delivery of capital projects. But despite sitting on the council, he did not learn about the FCB contract review threshold until he became comptroller in 2022 (see 18:00 in this interview shortly after he took office).
Much is going wrong. Much is improving. Much can improve still.
Excelsior.