As chair of the Finance Committee, Council Member David Weprin (D-Queens) has overseen every budget over the last six years, watching revenues climb from the fiscal crisis which followed the September 11 attacks to the $3 billion surplus last year.

Despite the current fears about the state of the economy, he insists that there is no recession. On the contrary, he has a rosy outlook about the city's financial health and on his own political future. He discussed his ideas for controlling spending in the budget, why he can pull ahead of the pack in the crowded comptroller's race and how the Council slush fund scandal is actually an example of transparency in city government.

What follows is an edited transcript.

City Hall: How bad is the economic situation in New York City?

DW: I think New York City has lagged behind the country. Obviously the country probably was in a mini-recession, but I think nothing that's unrecoverable. But New York City, I think, lagged a little bit behind it. I think our real estate market was a little more stable than the rest of the country and Wall Street was still a strong economic engine for a long time. I think we're feeling the effects of some of the cuts on Wall Street. As the mayor directly said, we should all pray for Wall Street's health.

CH: You just said the country was in a “mini-recession.” Why not call it a recession?

DW: Recession is, I think, a legal term. It talks about two quarters of negative economic growth, so I don't think the word is a negative word, per se, other than the perception out there that it means something major is happening in the economy that is having a major economic impact. I don't think we should necessarily be afraid of using the word as much as looking at ways to turn around the economy and see the markets do well. What I think we have to do in New York City is really create new industries and try to expand new industries. Traditionally, we've relied so much on Wall Street revenue. And when Wall Street was booming, Dow was setting new highs, the economy was booming, the money from Wall Street kept coming and coming. When Wall Street retracted, we weren't doing so well. We have to create and expand new industries.

CH: The executive budget reined in spending, but you criticized some of the mayor's proposed cuts. What do you think should be cut to control spending?

DW: I'm particularly concerned about the proposed cuts to the Department of Education. That'll particularly affect class size and other classroom activities. I think there can be cuts at the Department of Education, but I think there should be more in the central administration, as well as the outside consultants. There's a lot of money, hundreds of millions of dollars spent on outside consultants. I think there can be administrative cuts at all the agencies. But you want to make sure there's not a major impact on government services and services we care about: senior services, services to children, after-school programs. Sometimes when there are cuts, the first thing that suffers is after-school programs, arts, music and athletic programs. Those get less priority than the academic programs. I can understand why, but at the same time it's important that our students have a well-rounded education which includes arts, music, athletics and after-school programs.

CH: What will be different about passing a budget this year, given the current state of the economy?

DW: You know, a lot of this economic downturn we won’t feel until later budgets. I think we’ll be fine with this upcoming budget, but I think I'm more concerned with ’10 and ’11 budgets…. And we're being very responsible, because we're actually setting aside billions of dollars to prepay expenses which will make it easier for next year and the year after. We’re actually setting aside over $2 billion, even in this budget, to prepay debt service, to prepay certain salary expenses, as well as setting aside another $400 million to the health care trust fund where we already set aside $2.5 billion for future retiree's health care needs. So we have over $3 billion in this lock box trust fund, which will be used for future retirees' health care needs that we know will be there a number of years down the road.
We're not spending the surplus. We’re rolling over to prepay expenses that we know we'll have, which will reduce the deficit in ’10 and ’11.

CH: How will the recent slush fund scandal affect the budget?

DW: I don't think it'll have any effect at all, other than the fact that we're trying to create more transparency, which we've already done in the past few years. We're expanding upon that. Even Mayor Bloomberg said 98, 99 percent of the organizations the city council funds with discretionary money and other initiatives are good groups, well spent. There is maybe a 1- or 2-percent fallout when you have a $59 billion budget. It's very hard to keep track of all the groups, all of the thousands and thousands of groups. If someone wants to steal money, they can steal money no matter what the process is. The process actually discovered it. In the case in a lot of these stories that have been negative stories, they shouldn't be negative stories. What they really are taking are voluntary disclosures that the Council, on their own, decided to do about a year ago where they said, ‘if you have any relatives or close friends that are actively involved with organizations that the city council funds, or on a non-paying board or on a paid salary, you should disclose that.’ And we did. And we actually disclosed it and filed with a financial disclosure form. And what happened is, the newspapers have asked for Freedom of Information requests, basically just bringing out what we already disclosed, which is not conflict of interest. We disclosed to avoid the appearance of impropriety and a lot of these stories make it look like there's something improper. So it's kind of twisting things around. You can always twist anything you want with a headline, but I think what you've really seen here is actually more transparency.

CH: There are at least seven candidates potentially running for city comptroller next year. What separates you from the rest?

DW: The main way I would separate myself is my extensive financial background, first as deputy superintendent of banking, then my 18-year municipal finance career, as head of Securities Industry Association New York District, and, of course, head of the Finance Committee. I would like to bring all that background, all my contacts to get all the resources we can to help us in the office. I would hope to distinguish myself from the five, six, seven, eight, however many candidates there are, based on the fact that I'm the only candidate being mentioned that really has an extensive financial background and I think that'll make a difference as we get closer. And with editorial boards, we get out, with direct mailing and TV commercials, the message that we're a little different based on our background than some of the other candidates.

CH: This is your seventh budget. What have you learned over the years?

DW: It's more fun to have a surplus than a deficit.