Stephen Goldsmith: What to Expect?

Stephen Goldsmith

Unlike some previous Bloomberg appointees, Stephen Goldsmith, Bloomberg’s newly-announced deputy mayor and chief operating officer, comes with a well-documented track record — one that won’t necessarily please NYC’s municipal unions.

Goldsmith’s appointment last week drew the attention of several media outlets in Indianapolis, where he served as mayor between 1992 and 1999. There, he earned a reputation for privatizing city services and cutting costs, which he parlayed into a senior domestic policy advisor’s position with George W. Bush’s campaign. Among the services delivered by private companies during Goldsmith’s Indianapolis stint were the city’s car-towing operations, golf courses, sewer-bill collections, and document copying.

Indianapolis Skyline photo: hclc.info

Indianapolis Eye Witness News interviewed Goldsmith as he returned there last Friday. Asked whether his NYC strategy will follow his Indianapolis model, he replied:

“A couple of the things we did here may be applicable. Most applicable I think will be the public private partnerships that included labor management partnerships. Although they were advertised as privatization much of the success in Indianapolis was labor management breakthroughs working together. So I would look for more of that than the former.”

Goldsmith was elected mayor on the promise that he would introduce private-sector competition into traditionally public-sector services, forcing municipal employees to make work-rule concessions if they wanted to stay on the job. He described his privatization approach in an op-ed piece for the New York Times in 2001:

“For example, in many cities and states today, private companies are contracted to do ”back-office” work like collecting parking-ticket revenue, processing toll-road payments or operating print shops. This allows more money to go to more visible public workers like police and firefighters. The aim is not to privatize the work for the sake of privatization, but to serve the public better with existing resources.”

“Of course, this sort of transition may mean some shifts in the work force. Private contractors for public services often hire city workers, but not always all of them. To win support for change, city leaders must pledge to do what they can to minimize immediate forced layoffs.”

Goldsmith’s strategy may be harder to implement in NYC than in Indianapolis, which, although it was America’s 12^th-largest city, had only about 7,000 municipal employees during Goldsmith’s tenure. In contrast, New York has about 350,000; job loss by any significant number of NYC employees could be socially and politically catastrophic.

But Goldsmith wouldn’t have come here unless he intends to privatize. And Bloomberg, empowered by New York’s current strong-mayor charter, and emboldened by the knowledge that his potential critics fear what he could do with his wealth, is likely to give Goldsmith a broad mandate.

Mike Bloomberg and Joel Klein

If this wasn’t Bloomberg’s third term, Goldsmith’s appointment could portend more of what New Yorkers witnessed when Bloomberg won mayoral control of the public schools in 2002. His schools chancellor, Joel Klein, used his first couple of years to repeatedly reorganize the system’s governance structure, apparently to disrupt existing relationships and break old ways of doing business. It’s questionable today whether those reorganizations achieved any real improvement — this depends on whose test scores you believe and on whether you see Klein’s changes from inside. One thing is certain: A great deal of confusion reigned while the Department of Education supervisory deck chairs were being shuffled.

Will Goldsmith try to use a similar let’s-break-eggs-to-make-an-omelet approach? He may conclude that New York’s municipal labor unions are big enough and politically entrenched enough to resist a frontal assault. And he may have post-Bloomberg political aspirations. So his initial emphasis — after acquainting himself with NYC’s neighborhoods — may be more measured, and designed to win him political support.

John J. DiIulio Jr. and Stephen Goldsmith, front left, look on as President George W. Bush announces the faith-based initiative on Jan. 29, 2001.

Goldsmith’s Bush-campaign experience suggests he’ll work to enhance the role of faith-based organizations in delivering needed social services. This carries the cachet of a public-private partnership, it’s something he’s already done, it’s something many New Yorkers may favor — albeit with concerns about conditioning such services on religious instruction or observance — and it’s something that New York City’s religious community is ready for. Once Goldsmith has the influential faith-based community behind him, his leverage over the municipal labor unions will be vastly increased, and he may be ready to take them on as he did in Indianapolis.