The other shoe drops

Governor Not Budging On Higher Taxes For The City

APRIL 14TH, 2003

On the eve of a bleak budget address from the mayor, lawmakers and other officials are pushing various tax increases to save the city from further cuts and layoffs, but the governor is not budging, sources say.

As an alternative to the commuter tax requested by Mayor Michael Bloomberg, a group of state lawmakers Monday proposed a temporary surcharge on the income of wealthy city residents. Separately, the Manhattan district attorney called for an income tax surcharge on all city workers earmarked for public safety.

The leaders of city labor unions also went to Albany Monday to lobby for the commuter tax, which Mayor Michael Bloomberg is counting on to close nearly a third of the city’s $3.4 billion deficit.

However, Governor George Pataki will not approve any increase to income taxes, sources tell NY1.

In an unusual news conference Monday, Manhattan D.A. Robert Morgenthau proposed an income tax surcharge, on both city residents and commuters, to prevent cuts at the Fire and Police departments and other agencies related to public safety. Morgenthau’s office faces a $10 million budget cut that would sharply reduce the number of prosecutors.

“The revenue generated would be earmarked exclusively for public safety, including security against the increased threat of terrorism, which is currently costing the city $13 million a week,” said the 28-year veteran district attorney, who has no authority to enact a tax but claims to have the support of state and local officials.

The mayor, who unveils his executive budget for the next fiscal year on Tuesday, is expected to propose slashing $600 million on the heels of several rounds of deep cuts citywide. He will also call for 5,400 layoffs, the most since 1991, blaming city unions for failing to make concessions.

Bloomberg also has a contingency plan for deeper cuts and thousands of more layoffs, including at the Police, Fire and Education departments, in case the state does not reinstate the commuter tax or provide equivalent aid. More than a dozen senior centers could also be closed, sources tell NY1.

“The city is the engine that drives the state,” Randi Weingarten, the president of the United Federation of Teachers, said Monday morning before departing for Albany with a group of other labor leaders. “There are years when things are tight all over, but ultimately you need to always give nourishment to that engine.”

The union heads have meetings scheduled with the leaders of both the Assembly and the Senate to lobby for extending the city’s income tax to people who work in the five boroughs but reside elsewhere. The expanded tax would be several times higher than the commuter tax repealed by state lawmakers in 1999.

“We need to tell them about the importance of bringing back a fair and equitable commuter tax so that the city has an ongoing and continuous means of raising revenues,” said Harriet Cooper of the New York State Nurses Association.

You could find this story in 46 of the 50 states.

Everywhere we turn, states and localities are faced with making serious budget cuts.

Any help from Washington?

No.

There is a total lack of concern about the flood down effect of these cuts on the average American from the Bush Administration. Between plotting to run "Iraqi oil for the Iraqi people" and giving contracts to Halliburton and friends, the severe fiscal crisis nearly every state is facing has gone unnoticed and unremarked by the federal government.

Too busy passing tax cuts to really care that the minimal amount most people will get back from the feds will be taken away by state and local tax increases. People don't only pay one tax bill. Even in states without income taxes, taxes are going up. The worst tax of all, sales tax, will be hiked in several states.

You can blame bad budgeting, overspending, the market, but at the end of the day, the states could use about $90 billion in help. Which is $10 billion more than Iraq is getting. Billions for war, nothing for domestic tranquility.

New York is an easy target for the right, because of our large social service base, despite the fact that New York City is really five very large counties. But what about Oregon, where they let prisoners loose early? They're laying off teachers in California.

This is the kind of economic crisis which will trump any temporary gains from the war. Most Americans will be happy we "won" and then will wonder why their bills are going up when they can't get a raise. But the severe cuts we're facing in New York haven't been seen since the 1970's. The official unemployment rate is 8.8 percent. The real rate is at least two points, maybe four points higher. Personally, most of the people I know working are either freelancing or doing spot work. I could go to dinner with my friends and only one or two would have full-time work with benefits.

This is a national problem but fractured into 50 pieces, small enough that the Administration can ignore or deny it. New York isn't helped by George "I really DID go to Yale" Pataki's lust for some kind of higher office. He didn't run for Senator, but he now wants to have fellow Yalie George W. Bush do something nice for him. And he wants to prove his loyalty with tax cuts. Cuts made on the backs of children, the elderly, firefighters and policemen.

Pataki has always been a lazy governor, reaping the benefits of an easy going personality compared to the harshness of former mayor Rudy Giuliani. He's spent more days at his farm in the Hudson River Valley than the state capital in Albany.

But crunch time is coming. He's got to do something or take the blame for the coming economic disaster, which would end all after-school programs for a start.

Blaming Pataki is not the real issue, however. The question is if and when the feds step in to preserve the quality of life for states without increasing taxes and fees. That $90 billion would act like a tax cut for most Americans. Which may be the problem. The people who benefit from the federal tax cuts are not most Americans.

And we're supposed to believe that an administration which can't be fair at home can be fair in Iraq?

Steve Gilliard

Posted April 14, 2003 03:45 PM | Comments (41)