Wednesday, November 23, 2005

The New York tea party

I've been meaning to blog about this but haven't had the time to address it properly. New York City Mayor Mike Bloomberg, fresh from a landslide re-election on the 8th, proposed a new tax. And the beauty of it, from his perspective, is that it falls on those who reside outside the city but commute in for work, i.e. those who have limited political power over him.

The New York Post had a stinging editorial, for whatever it was worth. It shares the same sentiment I've had all along, that New York City's government is spending far too much, and Bloomberg cannot just listen to his liberal instincts that tax hikes are the way to cover budget shortfalls.
BLOOMY'S BROKEN PROMISE

November 15, 2005 -- Forty-eight hours. That's how long it took for Mayor Mike to double- cross New York and call for new taxes — violating repeated promises that he would do no such thing.

Indeed, the actual direct-from-the-machine vote counts only come today — yet Bloomberg has already announced a plan for socking it to New Yorkers and their neighbors.

On Friday, he renewed his demand to restore the commuter tax, which would zap non-city residents who work here and, indirectly, their employers.

Over and over again during the election campaign, Bloomy vowed not to raise taxes.

"If we focus on trying to do a little more with less, with the expansion of the economy, we will get through [next] year without any tax increases or fee increase," he said just days before the vote.

New Yorkers thought Rudy Giuliani evicted the Three-Card Monte sharps; little did they know they'd be returning one to City Hall for four more years.

Frankly, though, voters had fair warning. (As they say, fool me once, shame on you; fool me twice, shame on me.)

No, this is not the first time Bloomy has pulled a "no new taxes" bait-and-switch.

Remember his first campaign?


He promised to keep levies down in that one, too. At least then he had the decency to wait until he was inaugurated before turning Gothamites into suckers....

But let's face it: Mayor Mike has never understood the fundamental problem with the city's budget. It's quite simple, really:

The budget is too high!

The city spends too much — and taxes too much to pay for all the spending.

Which is why Bloomberg is dead wrong when he says a commuter tax is "the way to solve some of these problems."


Curbing the city's financial obligations is the way. Not forever scrambling for new streams of revenue....

Meanwhile, Suffolk County Executive Steve Levy is already contemplating revenge: "a toll for those using our county roads to get to the Hamptons." (OK, he may not be serious now — but if the commuter tax comes back, who knows?)

All this to plug a gap guaranteed to plague Gotham for years, given the budget's underlying fiscal imbalance. Consider that the commuter tax itself was only bringing in $500 million a year, just one-ninth of the $4.5 billion gap.

Will Mike be hiking other taxes to close the other eight-ninths?

Expect him to try — because that's the easy way out. Never mind that it'll break a key campaign vow, for a second time.

Think it of as Bloomy's breach of faith.
Bloomberg thinks a commuter tax will help balance the city's budget after the 2006 fiscal year, when it will start running huge deficits again. I've previously detailed the current fiscal situation, including what was projected in May would be a $3 billion surplus for 2005. Bloomberg initially (I don't know about now) wanted to save it to cover future deficits, which is wise. Yet the teachers didn't understand the concept of saving an excess for an expected rainy day: they demanded to know why Bloomberg wasn't planning to use it to hire new teachers and put more money into NYC public schools.

Bloomberg's justification is that commuters use city services that, as residents, we do not pay enough taxes for. Is it not enough that I pay 2%-plus of my city income in city income taxes? Doesn't that one-fiftieth of my city income help fund the NYPD and fire departments, in case I need their assistance, though I fortunately have never needed it? Doesn't that one-fiftieth of my city income help the sanitation crews that empty trash cans into which I throw my garbage? Doesn't that one-fiftieth of my city income help fund Central Park and other public areas I go to?

Those are about all I can think of; I directly pay for every other "city service" I use, like subways. And if various fee-based city services aren't pulling enough from fees, then the fees need to go up, just like any business would do with its prices. However, Bloomberg over the last four years has clearly shown he doesn't believe that you should pay only for what you use, and I should pay only for what I use. And now he seems to be telling commuters like me that our city income taxes aren't enough to pay for our share of the city's bloated, wasteful government. Why do no politicians ever look at reducing the size -- and especially the scope -- of the city budget, instead of expecting the latest taxpayer du jour to make up any revenue shortfalls?

When Bloomberg institutes his desired commuter tax, I and other commuters would fork over another $500 million to the city's coffers. Yes, that will help balance the budget; that is what is seen. However, has Bloomberg and his advisors not considered what is not seen? I doubt what the Post predicts, that companies would raise salaries for many affected employees, not unless they're top echelon management who are in very high demand and must be kept at their city jobs. The rest of us would, for the most part, put up with an additional 0.45% taken out of each paycheck. We'd still be making more in the city than elsewhere, however, there's still a certain level at which we'd cry, "Enough!" and look for jobs close to home in Westchester, Rockland, Fairfield and New Jersey. There's a certain level at which businesses will start fleeing the city again.

The Post editorial is correct, though, in predicting the commuter tax's effect on city businesses. What Bloomberg's administration (not to mention all four of the Democratic candidates who supported a commuter tax) does not see is that commuters would compensate by simply reducing our consumption spending in the city. We'll shop for fewer clothes than we otherwise would, go to fewer shows, consume at a wine bar, etc. Instead of eating lunch at restaurants with a certain frequency, we might eat more often at delis, or get lunch at a halal stand.

That's how taxes work: government may be able to balance its budget, but it deprives people of their own money to spend (or save) as they see fit. That in turn hurts businesses, and that means hurting people trying to make a real living -- as opposed to all the unions and other special interest groups who have successfully lobbied City Hall for generous pay yet rarely give the value that the private sector would. It wouldn't be so bad if taxpayers got their money's worth, but we are, after all, dealing with one of the classic cases of big government.

And most of all, this is taxation without representation, making the comparison to 1773 Boston very apt. It's time that we who commute into New York City for work let him know. Eric Cowperthwaite already began a nationwide tea party back in October, but I want to start one with a focus on the New York metropolitan region. I'd like nothing better than a big media event where we dump tea into the East River, but I'm sure that's illegal, so we'll do it Eric's way. All of us, from Poughkeepsie to Stamford, from Danbury to the Jersey shore, should start sending tea bags to Hizzoner:

Mayor Michael R. Bloomberg
City Hall
New York, NY 10007

Include a note indicating your displeasure at having to pay this additional tribute. Make sure to use tea bags, not loose tea. His staff might just throw loose tea away, or worse, they'll freak out that you've sent them a hazardous substance. It's just a matter of exercising common sense.

Send the tea bags, and send around the link to my entry here so that enough people are made aware. It would probably get me in trouble for "littering," otherwise I would photocopy fliers and leave them on the seats of my usual Metro-North train (I usually get there before most other passengers). Let's send King Mike a message that for once, he needs to look at cutting city spending, instead of hiking taxes on anyone he can.

Addendum: a list of my entries on Bloomberg, illustrating my views on the man, can be found here.

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