NASSAU COUNTY CIVIC ASSOCIATION, INC. "The government is us, we are the government, you and I." Teddy Roosevelt

A State of Anarchy

New York must cut spending, cut taxes

For more then thirty years, New York has struggled with dysfunction and economic crisis. Only one Governor was willing to actually change the dynamic, Hugh Carey. He actually cut business and personal income taxes and kept spending below the rate of inflation. Once he left office in 1982, every subsequent Governor regardless of party embraced the fiscal policy of "tax and spend". This failed philosophy transformed the  Empire State into the Vampire State which is now sucking the lifeblood out of its residents and the business community. This is precisely why freezing taxes at the current level is nothing more then maintaining the status quo. If your victim is dying, it is critical to treat the cause not the symptom. The cause is the growth of government and the symptom is excessive taxes. For New York to survive, its rather simple, cut spending and cut taxes.  

Governor elect Andrew Cuomo ran and won on a platform of reform and promised to actually fix Albany. His platform reflected the will of voters nationally and he articulated that vision for New York while running against the grain of his party. What type of Governor will he emulate; Elliot Spitzer who failed to deliver, the current tax and spend philosophy of David Patterson or will he be the first to deliver on his agenda of reform?

Taking a closer look at his policy positions, the future governor talked about passing a tough ethics bill yet he appeared at a fund raiser for the ethically challenged and recently re-elected Congressman Charlie Rangel. Rangel is currently facing trial in the U.S. House for numerous ethic violations including his failure to obey the very tax laws he has authored as the former Chairman of the House Ways and Means Committee. Andrew Cuomo endorsed State Senator Eric Schneiderman for Attorney General, the same Eric Schneiderman who was linked to the Aqueduct Racino scandal and who promised to create an annex at the Attorney General's office for the ethically and morally challenged Al Sharpton. This hardly inspires confidence.

On the issue of taxes, Andrew Cuomo has acknowledged the obvious, New Yorker's are taxed too much, yet he offers only the status quo. His position is to hold the line on excessive taxes at the high water mark but he has no actual plan for tax relief by actually reducing the tax burden. In simple terms, he is willing to allow the vampire-NY State government to continue to drain it's host-NYS taxpayers without any actual relief.  Even so, he is prepared to address a significant portion of the local property tax bill; school taxes by advocating for a 2% property tax cap. While the cap will limit annual tax increases, its just one of many reforms that will be required such as pension reform, eliminating teacher tenure, revising the Tri-Borough amendment, amending the Wicks law and allowing only one budget vote on a unified election day. Instead he has called for a redistribution of education dollars from high taxed middle class school districts to under performing urban school districts. This contradictory approach creates more problems then it actually solves. Again, he needs to reduce the level of education spending by enacting bold and significant reforms which will in turn reduce the oppressive level of school taxes.

The Governor elect advocated for the consolidation of thousands of local governments but he has put forth no real plan to consolidate the more then 860 mega public authorities loaded with patronage and duplication. His "plan" is to appoint another commission to study the problem. There have been two commissions which have issued reports; the Hults Commission in 1956 and the Commission on Authority Reform in 2004. Now is the time to eliminate not just consolidate the many mega public authorities. Currently the total public debt held by public authorities is $134 billion which excludes the state's current debt of $57 billion. The dilema is what to do with the off balance sheet debt?  Considering New York State faces a 37.2 billion budget deficit over three years, spending cuts are an absolute necessity. 

Healthcare reform in New York cannot be ignored. While Obama care was rejected by voters on a national level, New York enacted similar "reforms" more then 20 years ago resulting in exploding medical costs. Prosecuting Medicaid fraud is important and makes for a great political statement during a campaign but it does nothing to address the structural imbalance of the state's Medicaid program. How can New York with a population of twenty million justify spending the same amount on Medicaid as Texas and California combined? Considering Texas has a population of twenty five million and California thirty seven million, what type of services are covered and why are so many residents eligible? During the current fiscal year, New York will spend 49.2 billion on Medicaid which is about 14% of the nation's total Medicaid spending. This level of spending not only effects spending on the state level, it effects the counties portion as well. With Obama care looming in the background, a solution to the Medicaid mess will require cooperation from the federal government. 

While its no surprise to the business community, the Tax Foundation ranked New York last out of the fifty states for the worst business climate in America. New York has the highest corporate tax rate, personal income tax, sales tax, unemployment tax and property taxes. Just look at the recently enacted MTA payroll tax. This is just one of a series of hidden taxes not even addressed in the calculation but which add to the cost to do business. Looking at the barren waste land of upstate New York, how can any reasonable person not understand the effect of New York government's disdain for business. Our economic recovery on the state level can only be achieved by growing jobs in the private sector not creating new jobs in the public sector with higher taxes. Yet the current leadership in the legislature with the acquiesce of Governor Patterson went on a spending binge fueled by federal stimulus money and huge tax increases. As reported by Fiscal Watch, "New York’s per-capita state tax hikes over the past two years will come to $414 per capita — far more than any state including California, which has raised taxes by $312 per capita... In fact, New York alone accounts for fully 29 percent of all the state tax increases proposed and enacted since 2009. This may qualify New York politicians for yet another dubious achievement award."

New York like many other states have a history of divided government. In particular the Democrats have controlled the Assembly and the Republicans controlled the Senate with the Governorship alternating between the parties. During the last two years, the Democratic party has controlled both houses of the legislature and the governorship so it is difficult to deny their sole complicity with the record tax increases in 2009 and 2010, however the journey to fiscal ruin had a partner. During the reign of Senate Majority Leader Joe Bruno and Ralph Marino before him, the Senate while slowing the fiscal recklessness of the Assembly often went along with the tax and spend philosophy. Yes there were explicit differences between both houses on issues such as public safety and some social issues, but the majority of issues came down to a question of the trajectory and timing. The Assembly can best be described as speeding toward the cliff while the Senate sought to walk toward the cliff. In the end, the result is no different.    

Considering the significant scope of New York's fiscal crisis, it's quite disturbing how passionate the future Governor is over homosexual marriage, a divisive social issue already rejected by the legislature this past December. New Yorkers have heard this before in 2006 when the last Attorney General promised to fix Albany. This November, voters in New York and America sent a message; cut spending, cut taxes and reduce the size of government. Andrew Cuomo would best be served if he saves his passion for the most important task before him, returning fiscal sanity to New York.