New York State budget: more regressive ideas from Gov. Paterson

Two days ago I wrote about the proposal to jack up NYC transit fares by 28% and how that was in effect a regressive tax on the sort of New Yorkers whom could least afford it—and how this was being done at the same time New York State Governor David Paterson has refused to consider what’s come to be called the “millionaires’ tax.”

Well, just to add insult to injury, here’s another winner of an idea: New York State has started collecting a $25 child support enforcement fee from those that needed government help to recover child support payments.

To be fair, this insult was originally the brainchild of the Bush Administration and its rubberstamp Republican Congress. As part of the “Deficit Reduction Act of 2005,” the federal government started charging states a $25 fee for child support recovery. However, from then, till recently, New York had covered that fee for its needy residents.

But with the looming state budget crisis, no more. Governor Paterson has decided the state can no longer afford this level of generosity.

Millionaires, however, well, have no fear, the governor is looking out for you.

The “millionaires’ tax” is pretty simple as tax proposals go. Income over $1 million would be taxed an additional 1%, and income over $5 million would be taxed .75% more. New York has one of the highest concentrations of wealth in the country—just one-half of one percent earned 28% of the taxable income back in 2005. The proposed tax surcharge could bring in about $1.5 billion in the first year—or roughly three-quarters of the expected NY budget shortfall.

The millionaires that would have to pay this tax—or at least a few loud ones, like the ubiquitous, selfish, and inevitably wrong Donald Trump—argue that if you make them pay this increase, they just might leave New York. I say, as did the NY Daily News recently, call their bluff.

As the Daily News observed, New Jersey imposed a much larger increase on all incomes over half-a-million a few years back, and they got incredible bang for their buck—about $26 coming in for every $1 fleeing the state.

And they were fleeing New Jersey!

Even New York City’s billionaire mayor, Michael Bloomberg—who had previously been heard whining about a surcharge—now says this millionaire flight threat is a lot of hooey:

I can only tell you, among my friends, I've never heard one person say “I'm going to move out of the city because of taxes.” Not one. Not in all the years I've lived here. You know, they can complain, “Oh got my tax bill, it's heavy.” But they've not ever thought that. My friends all want to live here and understand the value.

He oughta know, right? That is his cohort.

As for the rest of us—that would be 99.5% of us—well, I’m guessing a lot of us have a little less mobility. And since Paterson knows he’s got a captive “audience,” I guess it’s up to this rest of us to pick up the slack, balance the budget, and so, look out for the Governor’s interests. . . whether we want to or not.


(PS The information on the child support fee comes from the office of Senator Hillary Clinton (D-NY), who has called on NY State to stop collecting this regressive tax, and has asked the Senate to increase funding to child support enforcement.)


(cross-posted on capitoilette, The Seminal, and Daily Kos)

NYC subways: fare hikes, service cuts. . . is this the change we need?

Tell me you didn’t see this one coming. MTA Chief Elliot Sander announced this week that economic times being what they are, the Transit Authority’s deficit was going to balloon to $1.2 billion, and so service cuts and substantial fare hikes were now inevitable.

The MTA had already slated eight percent fare increases for next year; they now say they will need an additional 20% to make up shortfalls caused by increased fuel costs and decreasing property values (the MTA gets a good chunk of its budget from property and property-related taxes). If an increase like that is approved, the price of a single ride on a New York City subway or bus would climb above $2.50.

Capital improvements and service expansion are already lagging far behind the needs of a city expecting to grow to a size of 10 million in the next decade, but even if Sander gets all of his fare boost, service and improvements will still have to be cut back to trim the deficit.

The Metropolitan Transit Authority is hardly the only state agency facing a budget crisis as the Bush economy and the Wall Street meltdown send shockwaves through the New York economy. (For those of you not familiar with NYS politics—yes, the city’s transit system is run by the state. It was taken from the city during the 1970s fiscal crisis, and NYC never got it back.) Governor David Paterson, who has already negotiated state budget cuts, is demanding the legislature return for another round—and for that round, Paterson is proposing a 25% haircut.

Still, Paterson has made it clear: there will be no state tax increases.

What Paterson means by that, of course, is that he will not countenance a state income tax increase. The ousted Spitzer Administration had floated the idea of a “millionaires’ tax”—a surcharge on the highest of highest incomes to help New York meet its obligations—but Paterson, formerly a state representative from Harlem and once considered a liberal, has thrown that baby out with Eliot’s bathwater.

Of course, a 28% fare increase—more than a dollar extra for every roundtrip commute—would effectively (if not officially) be a tax increase. . . except this one would primarily affect the other end of the economic ladder.

To reiterate: For millionaires, who don’t take the subway all that much—no new taxes; for working class New Yorkers, who do use the subway daily to get to and from work—how does paying an extra $260 per year sound? (That’s per person—if there are kids that use the subways and busses to get to school, multiply accordingly.)

NYC is the economic engine of New York State. (And city residents already pay a disproportionate amount to fill state coffers—they pay out more than they get back in services and benefits.) The fuel for that engine is the city’s workforce—and that workforce relies in large part on public transportation to get to work. Without a functioning and affordable public transit system, New York City’s commerce—the state’s engine—would grind to a halt.

So why is it that all anyone can think of when times get tough is to cut service and raise fares? Why take one of the great advantages that New York has over most other American cities and hobble it? Is it that hard to think of anything else to do?

Let me give it a try. . .

First off, it is high time that control of the city’s mass transit system is returned to the city. For far too long, income from the total of state transit systems has gone disproportionately to commuter rail; subway and bus riders have effectively been subsidizing suburban rail commuters. That has to stop. I’m not saying that commuter rail isn’t important—it is vital—but the subway system is more vital to the workings of New York City, and it deserves the full benefit of its income.

Second, how about some creative thinking?

New York City and State pay more in taxes to the federal government than either gets back—so it is in America’s best interest to keep the New York economy growing. So how about we integrate some of NYC’s financial problems into the national thinking on bailouts and stimulus?

If Washington is going to spend billions to bailout the auto industry, why not spend a couple billion to help out systems that are better for the economy and the environment than cars? Seriously, not only does the MTA itself provide good-paying jobs to thousands of New Yorkers, capital improvements would provide even more, and the service that the MTA provides increases the productivity of practically all city businesses. Backstopping automobile manufacturers will cost tens or hundreds of billions, and I can’t even begin to tell you how much of that will go to the credit divisions, or legacy costs, or executive compensation, or shareholder value. I can pretty much guarantee that one or two billion to the MTA will deliver much more bang for your buck.

Here’s another idea: The coming infrastructure bill. . . what says infrastructure more than subway and light rail? Why shouldn’t the New York congressional delegation insist that this promised investment in infrastructure pick up the tab for system upgrades and expansion? Let fares go to the day-to-day operating costs. For all the reasons cited above, I am pretty sure that few infrastructure investments will provide better ROI.

I got another: What say we reduce the burden of rising fuel costs by making the New York transit system one of the stars of the new green economy? Spur plug-in hybrid innovation by promising the best technology a crack at replacing all of NYC’s busses. Fund an initiative to find a self-sustaining way to generate all the electricity needed to run the subways. Yes, that’s dreaming big, but a) not that big, and b) isn’t that the change we need?

So there you go—in fifteen minutes, I just outlined three (or was that four?) possible alternatives to fare hikes and service cuts. And I am just doing this on my own, pro-bono. There are staffs of paid experts and consultants at the MTA’s and the government’s beck and call—where are their ideas?

Indeed, I’ll go a step further: where is the political leadership? Why is it that the best anyone can think of is to make the poor and working class suck it up, pay more, and make do with less? What makes that leadership? That’s the simpleton’s solution. That’s the coward’s way. Why should we reward that?

When I went to the polls here in Manhattan last week, I didn’t just vote for change at the federal level; I voted for my US Representative, and my state senator and assembly member, too. Two years from now, I’ll vote for all of them again, and a Senator. I expect them to be full participants in promoting the vision and the programs that were highlighted in the campaign of our president-elect. What better place to begin than right here at home?



(cross-posted on capitoilette, Daily Kos, and The Seminal)

endorsement: vote row E for WFP

If you are a regular reader, then I expect that you can guess what I’m going to say when it comes to choosing the next president of the United States. If you call yourself a liberal, or a progressive, or a lover of individual liberty and reproductive choice; if you want quality, affordable healthcare to be accessible to all Americans, if you want to restore some modicum of equity to the tax code, and some degree of sanity to our foreign policy; if you want to approach energy independence and global warming with the seriousness and the urgency those matters deserve; if you want a government staffed with experts instead of ideologues that is led by a man who trusts his intellect enough to be intellectually curious—or even if you just want some portion of all this—then there is only one way to vote on Tuesday: Barack Obama for president.

BUT, if you live in New York, there are actually two ways you can vote for Obama—you can go the old, stodgy, predictable route, and pull the lever or mark your box for Barack Obama (D), Democrat, or, if you really, really believe in all that I laid out above, you can vote for Barack Obama (WFP), Working Families Party.

As I have discussed in elections past, New York has something called “fusion” voting; this allows a candidate to receive the endorsement of more than one party, and to be listed on the ballot under multiple party lines. All the votes for a single candidate, however, are combined to count for the final total. A vote for Obama on Row E—the Working Families Party line—counts just as much as a vote on the Democratic line. . .

. . . and more.

More, because the Working Families Party is more than a social club or the vestigial organ of some moribund New York political machine, the WFP is an active and organized party that has been fighting for progressive ideals for better than a decade. They stand for universal healthcare, tax equity, and equal representation under the law. They have lead fights for a living wage, for green jobs and green homes, and affordable housing. They advocate for better-funded public schools so that every child gets a quality education, no matter where he or she lives, and the public financing of elections to get the corrupting corporate money out of the system.

Earlier this month, WFP teamed with organized labor and local activists to protest New York City Mayor Mike Bloomberg and Speaker Chris “Quisling” Quinn’s naked power grab vis-à-vis term limit “extensions.” The effort did not prevent Bloomberg from buying enough influence on the City Council to win his rule change, but working together, the WFP and the people of NYC made a lot of noise and called a lot of attention to the undemocratic way that the mayor and speaker went about overriding the existing law. Because of this effort, the fight to unseat these arrogant plutocrats next year has a big head start.

By voting for Obama—and for other cross-endorsed candidates—on the Working Families line, you are showing candidate and country that you stand for these kinds of progressive ideals. A vote for BHO (WFP) Row E shows that you want our next president to embrace the progressive potential that has brought you to his side.

By voting for state candidates on the WFP line, you will help shape the next generation of New York politics. Democrats are poised to gain the majority in the state senate for the first time in over 40 years, and thus will control both houses of the legislature and the governor’s mansion. It will present a tremendous opportunity to reform a dysfunctional state government; a vote for the Working Families Party will give the left better leverage in the battles that lay ahead.

The Nation, The Albany Project, Daily Gotham, and Democrats.com have all endorsed a Row E WFP vote because they all know that strengthening the role of the Working Families Party is a solid step toward building a statewide progressive movement. Voting for Obama on the same line brings that voice to the national dialogue.

Barack Obama has promised change, and I truly believe that his election will noticeably transform the style and substance of our national leadership. What kind of change, how much change, and how directly that difference will affect the lives of hard working Americans, however, still hangs in the balance. The progressive direction advocated by the Working Families Party is the kind of change Democrats have been fighting for lo these many months and years—it is change we can believe in.

Vote Row E.


UPDATE: Thanks to the courts, we have a late-breaking exception to this rule in Western New York—NY-26, to be specific. Please vote for Democrat Alice Kryzan on the Democratic line.


(cross-posted on capitoilette, The Seminal, and Daily Kos)



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in case you were still wondering what this whole thing was about

From the near the end of the story in Friday’s New York Times:

A person close to Mr. Spitzer said that prosecutors told [Spitzer’s attorney Michele] Hirshman this week that they would be more inclined to pursue a criminal case against Mr. Spitzer if he remained governor because of the violation of public trust.

“The message was, ‘We’d be less inclined to press a case if he’s just a private citizen,’ ” a friend of Mr. Spitzer’s said in a telephone interview Wednesday night.

But, just to make sure he’s really dead:

Two people briefed on the investigation said that one of the money laundering laws that prosecutors are trying to determine whether Mr. Spitzer broke prohibits “the intent to promote the carrying on of the specified unlawful activity.”

Charles H. Grice, a banking expert, said that statute was hardly ever used. “This is extremely arcane stuff,” he said.

A friend of Mr. Spitzer’s, who spoke on condition of anonymity, reacted with fury at the news that prosecutors appeared to be widening their inquiry to include money spent on campaign trips that may have involved trysts with prostitutes.

“At some point, this becomes piling on,” the friend said. The friend said that he would be stunned if “a judge or jury would convict a man for something like this. It’s very low grade,” adding, “Why would prosecutors pursue this?”

Why indeed.

big W for the big D in NY (w/ an assist from WF)

A special election in New York’s 48th state senate district on Tuesday saw Democrat Darrell Aubertine take what had long been a seat held by Republicans. As the New York Times points out, this switch puts New York Democrats within one seat of taking control of the State Senate, something they haven’t done in over 40 years.

It’s a big win for the Democrats, and a big win for some of Elliot Spitzer's consultants, who lent muscle to the Aubertine campaign, but (and missing from the Times article) it is also a big win for New York’s Working Families Party, who cross-endorsed Aubertine and ran his GOTV operations.

Under the peculiarities of NYS election law, candidates are allowed multiple listings on the ballot under the banner of separate parties, with all the votes for the same candidate being tallied together. This allows a progressive third party such as Working Families to pick like-minded candidates within the system, and give them the extra help and visibility the party can provide. Candidates that want the WFP endorsement have to speak to the party’s progressive ideals. The candidate then gains their help; the Working Families Party gains the visibility for their issues and the greater media attention that naturally gravitates to a traditional party candidate, But, best of all, the citizens of the Empire State gain another progressive lawmaker to fight for the rights and wellbeing of the less privileged and hard working people of New York.

Congratulation to Senator-elect Aubertine, congratulations to the NYS Democrats, and congratulations to the Working Families Party.


(cross-posted on The Seminal)