As the new fiscal year begins,
“At a time of dwindling government resources, New York City must be committed to allocating tax dollars in a way that is transparent, equitable and free of political favoritism,” said Borough President Stringer. “Unfortunately the current system of distributing member items falls short on all these counts. It’s time to reform this process once and for all.”
Member items are annual grants, also known as discretionary funds, distributed by City Council members each year to non-profit organizations and other local groups in each Council District. In the current fiscal year, $49.6 million in member items were allocated to some 4,335 organizations. Each Council District received a baseline sum of $260,464 to spend on youth and senior services as part of that $33 million. Anything above that sum was awarded at the discretion of the Speaker’s Office.
Under the current system, some districts receive more than four times the amount of discretionary member items than others. The Borough President’s report notes that the adoption of a uniform, across-the-board distribution of member items would have given added funding to 32 districts across the city.
Regrettably, New York’s system has also led to abuses: Some
elected officials have steered tax dollars to charities that employed friends
or relatives, or otherwise used the system to enhance their financial or
political standing. The report also
Borough President Stringer also commended previous efforts to improve the disbursement process of member items, including reforms implemented by Speaker Christine Quinn that have tightened regulations and reduced corruption. The Borough President noted that Governor Cuomo’s current budget eliminated all funding for new member items.
Some of the report’s findings include:
Per Constituent Disparities: The Borough President’s analysis found significant disparities in per constituent member item allocations across New York City’s 51 Council Districts, which have roughly equal populations. In one district in Brooklyn, for instance, the member item allocation equaled $10.30 per constituent, the highest in the Council in FY 12. That is nearly five times more than the $2.37 per constituent received in another district in the same borough.
Widening Gap: In recent years, the disparities have grown worse, not better. In FY 2009, the gap between the Council District receiving the least amount of member item dollars and the most was $904,500. Today, that gap has stretched to $1.3 million..
Geographic Fault Lines: Underscoring disbursement disparities on a per constituent basis, the Borough President’s analysis found numerous geographic “fault lines” between districts that literally border each other. . In Brooklyn, for instance, one of the most richly rewarded districts this fiscal year received $1,235,464 in FY 12, or about three times more than the District right next door which received only $471,464, despite having a significantly lower median household income.
No Relationship to Need: Beyond simple district-by-district comparisons, the Borough President’s Office used a basic linear correlation to demonstrate that there is no statistical relationship between a Council District’s need and its member item allocation. 
“Reforming Local Member Items in New York City” puts forth several recommendations for a reorganization of member items disbursement.
The report recommends that the current system of member items should be abolished in New York City. Instead, those funds should be transferred to mayoral agencies for distribution as Community Grants.
As a starting point, the Mayor’s Office of Contract Services (MOCS) should convene a working group of diverse elected leaders, good government groups and non-profit representatives to develop a new process for awarding Community Grants. The working group’s process should provide for a number of criteria including but not limited to:
- A baseline allocation for Community Grant funding that guarantees a set level of support to non-profit service providers each year.
- A formula that assures Community Grants are distributed on an equal basis across all 51 Council Districts, or through an empirical, needs-based formula that targets areas of greatest economic need.
- A process that recognizes the importance of small community organizations and ensures the opportunity for their participation, as well as limits on how much any one organization can receive.
- Appropriate mechanisms for incorporating input from local elected officials, community leaders and stakeholders.
Whatever system MOCS develops for distributing member item dollars should apply equally to Borough Presidents.
In the absence of a total reorganization of the member items process, the City Council should adopt a system in which member items are distributed equally to each district, or adopt a formula-based approach that takes into account each individual district’s economic need. The federal government already uses similarly progressive, needs-based formulas to distribute anti-poverty funds.
“The bottom line is that we must shut down the current broken system,” Borough President Stringer concluded. “We need to replace it with a process that all New Yorkers can support, that removes politics and restores public confidence in local government. Washington has started down this same road of reform, and Albany has followed. It is now time for New York to do away with this relic of the past and embrace a more equitable and transparent system of allocating tax dollars.”
Office of Manhattan Borough President Scott M. Stringer • 212.669.8300
1 Centre Street, 19th Floor • New York, NY 10007 • © Copyright 2006
The Manhattan Borough Presidentís Office is an Equal Opportunity Employer.