Richard Ravitch — who died Sunday, a dozen days short of his 90th birthday — was among the last surviving members of a remarkable generation of political and business leaders who steered New York City out of its brushes with bankruptcy in the mid-1970s.
Ravitch’s public service didn’t end with Gotham’s crisis: To the very end, this staunchly liberal Democrat was a voice for financial responsibility at every level of American government, especially (with increasing frustration) in his beloved hometown.
Ravitch’s construction company had just opened Waterside Plaza residential and commercial complex on the East River when, in early 1975, newly elected Gov. Hugh L. Carey asked him to take over as chairman of the Urban Development Corp., just before it defaulted on a bond payment.
Ravitch engineered the creation of a new state agency to refinance the UDC’s bonds — an approach that would be repeated, on a larger and more drawn-out scale, when New York City itself was shut out of the bond market months later.
Starting in the mid-1960s under Mayor Robert Wagner, and building through the early ’70s under John Lindsay, the city had (with the express permission of the state) covered a growing share of its operating budget with capital borrowing.
As the city’s debt grew, its economy shriveled under repeated tax increases, municipal employee strikes, outmigration to the suburbs and mounting crime.
By the time Abe Beame became mayor in 1974, just in time for a national recession and stock-market crash, the city was teetering on the edge of bankruptcy.
Ravitch was a key behind-the-scenes player in Carey’s state-directed workout effort, which included the creation of a financial control board and a refinancing helped by federal loan guarantees.
In 1979, as the city’s own finances were stabilizing under Mayor Ed Koch, Ravitch took on a bigger challenge: accepting Carey’s appointment to the chairmanship of the Metropolitan Transportation Authority.
The MTA was an unmitigated mess — deeply in the red, its stations filthy and crime-ridden, its rolling stock rapidly deteriorating, all underscored in the public eye by the graffiti covering seemingly every inch of the Transit Authority’s rickety subway cars (inside and out).
After a dogged Albany lobbying effort by Ravitch, the agency was refreshed with a major new regional dedicated tax package — and, for once, the money was well-spent, rejuvenating the system and its facilities.
Ravitch only ran once for public office, finishing third in the 1989 Democratic mayoral primary.
However, after 1990s stints that included heading the Bowery Bank and advising labor negotiators for Major League Baseball, his last hurrah in state politics came in 2008, when he was named lieutenant governor by David Paterson, who had moved up to the state’s top office after the resignation of Eliot Spitzer.
Ravitch dug into the state’s Great Recession fiscal crisis with a characteristically substantive and deeply researched approach, culminating in his own comprehensive budget reform package.
It included many positive elements, including a long overdue shift to a July 1 fiscal year and an accrual-based, long-term financial plan.
However, he linked these reforms to a multi-year refinancing of the state’s operating deficit — an element I criticized as a fatal flaw in a Wall Street Journal op-ed piece, headlined: “The Ravitch Plan Won’t Save New York.”
Most other public officials would have taken this as a personal affront — but Ravitch responded by inviting me to a friendly lunch.
Before and after leaving his last state office, Ravitch pushed back, privately and publicly, against the notion that New York’s steep income tax rates on high earners would threaten the city’s future.
After all, he would frequently say, taxes had never deterred him from investing here.
But as it did for so many others, the pandemic changed Ravitch’s perspective.
In the spring of 2021, after Gov. Andrew Cuomo’s final budget jacked up New York’s top tax rates to their highest level in decades, the old fiscal-workout warhorse was growing alarmed that the burden had reached a tipping point.
“It was an inappropriate and stupid time to do that,” he said in an interview with City Journal contributing editor and Post columnist Nicole Gelinas.
“For New York’s recovery, we need capital, we need rich people.”
He warned the city would face “a horrendous fiscal situation” once federal COVID relief ran out — and worried about the likely decline in real-estate values, and thus commercial real-estate-tax revenue.
In the last two years, he grew increasingly concerned that New York City and state politicians seemed unable or unwilling to grasp the severity of the coming problem, much less prepare adequately for it.
Ravitch no doubt would be pleased by the headline of his New York Times obituary: “Rescuer of the Subways and New York’s Finances.”
An equally apt epitaph might be: “I Tried To Warn You.”
E.J. McMahon is an adjunct fellow at the Manhattan Institute and founding senior fellow at the Empire Center.”
This story originally appeared on NYPost
