Cost-cutting Quinn takes aim at MTA.

With the fiscal challenges that lie ahead, it seems the real estate industry and the City of New York are in the same boat.

Speaking at the Association of Real Estate Women (AREW) holiday luncheon last week, New York City Council speaker Christine Quinn said tough times are ahead for the municipal budget, which now faces a $1.3 billion deficit. And just as many brokerages are looking for ways to diversify revenue, the city, she said, must do the same. "When there's a downturn like we have now, there's almost an immediate effect on cash flow for the city," said Quinn.

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Since 20-25% of the city's revenue relies on Wall Street, fiscal challenges are beginning to mount. Quinn noted that, after Wall Street, the real estate industry is perhaps the second most crucial sector to the city's financial health. With New York's funding so contingent on the real estate and financial sectors, sources of revenue will be scarce heading into next year.

While Quinn supported Mayor Bloomberg's congestion pricing proposal, the idea never gained enough traction and now the city must look to other means. Quinn believes a change in corporate tax structure would do the city some good. She wants to see the city tax businesses the same way the state does. But this can only be accomplished through state legislation and could take several years to faze in.

In the short-term, cuts are inevitable. Quinn said the city must slash an additional 7% from the budget, on top of the 5% in cuts already made.

"We recognize there are going to be tough choices, and more tough choices--and we're going to have to make them," said Quinn, who noted that borrowing more money is a last resort for the city, which doesn't want to jeopardize a strong bond rating. While Quinn won't support cuts that affect core needs, like classroom programs and the police department, she insists the city will be trimming the fat from its budget--something she said the MTA has yet to do, citing an unnecessarily large press/ public relations office at the troubled Transit Authority.

"There's really no transparency in their budget," Quinn said. "At times, they had two sets of books."

Quinn said that several people have suggested the MTA would be better off under the city's control, and that she doesn't disagree. She raised skepticism over the MTA's latest budget solution: a tollbooth bailout. But she finds the plan inequitable.

The MTA has proposed establishing tolls at the currently free East River crossings, the Brooklyn, Manhattan and Williamsburg bridges. The MTA also wants to raise fares and tolls without public hearings. Under this power, tolls would be raised every other year at the rate of inflation.

Quinn suggested the MTA take a different approach. She wants the Transit Authority to look into linking the city's bus and subway lines with the Long Island Rail Road and New Jersey Transit. Rather than requiring people pay for services twice, such a move could make public transportation more convenient; taking more cars off the road and spurring increased ridership.

Quinn said, "We need to find a way to think more regionally, particularly at a time like this."