Attention, New York voters. Keep your eyes on Washington because a sequester-style crunch is coming here. If we’re lucky.
The political drama unfolding in the capital is phony only to the extent that the pols are playing chicken over a problem that is manageable. President Obama is responsible for making it a crisis because he’s never met a budget cut he likes. He thinks about tax hikes the way teenage boys think about sex — all the time!
Still, the arguments about spending, taxing and borrowing offer a useful preview of this year’s mayoral race. There is no shortage of New Yorkers in need, or of ideas for more programs to help them.
All that’s missing is the cash to pay for added “free” stuff in the twilight of the binge years. New York can’t print money or run a deficit, so those seeking to replace Mayor Bloomberg first must find ways to close the yawning gap between existing revenues and expenses. The numbers aren’t pretty.
“It is a fact the budget has grown 56 percent above the rate of inflation over the last 11 years,” Republican candidate Joe Lhota said recently. “The budget is going to be priority Number 1 for the next mayor.”
Lhota framed the issue correctly, and his analysis presents a challenge to his rivals. Those who say the city can do with less must show how, and those who want to spend more must show who will pay for it.
Nobody starts with a blank slate. For the first time in history, the city has more than $100 billion in outstanding debt. The borrowing, which grew by 83 percent in the last decade, according to the Citizens Budget Commission, is backed by various revenue streams, including tobacco funds, water rates and property, sales and income taxes.
The borrowing carries debt-service costs of nearly $7 billion a year, a tab that will grow when interest rates rise. Throw in more than $8 billion a year in pension costs, and the combination consumes more than 20 percent of the budget of $70 billion, yet doesn’t hire a cop, a teacher or fill a pothole.
Washington has an even larger debt and deficit monster, and its failure to face it contributes to the economic malaise. If Obama is right that any cut in spending instantly creates a “Mad Max”-style catastrophe, America is doomed. Cutting is inevitable. The only question is whether it will be done well or badly.
Obama’s scare-mongering is also a lesson for Gotham candidates who think prosperity is just one tax hike away. The combined city and state tax rates top out at 13 percent, and already provide a great incentive to flee.
A Post story reflected how higher federal tax rates also are prodding New Yorkers to leave. Although local tax rates didn’t change, the new federal rate of 39.6 percent led so many private-equity and hedge-fund execs to turn to Florida that Palm Beach County set up an office to help them relocate.
“We’re not doing a multimillion-dollar marketing campaign. We don’t need to,” Kelly Smallridge, of the Palm Beach County Business Development Board, told The Post. “They’re coming to us.”
The logic is simple. The new combined rates of nearly 53 percent, plus a boost in capital-gains taxes, were a tipping point. While federal rates are the same everywhere, Florida has no state or local income tax, so it can offer immediate savings of 13 percentage points to beleaguered New Yorkers.
Bloomberg makes that point repeatedly, noting that about 5,000 wealthy families pay 30 percent of the city’s income tax. If a relative handful leaves, the city will have less money to spend, or be forced to raise more from those who stay. Raising rates then gives others reason to leave.
That’s the challenge to the candidates. They must decide which services are vital, and find ways to deliver them more efficiently.
Those who say it can’t be done are right in one sense — they can’t do the job, and are not qualified to be mayor of New York.
Predator and prayer
When all else fails, beg. That is apparently how new Secretary of State John Kerry hopes to win friends and influence people.
Kerry, in his first trip abroad, scrambled to get Syrian resistance leaders to drop their boycott of a Rome meeting over their unhappiness with Western support. After he promised more aid, though not weaponry, and dangled an invitation to Washington, the boycott was canceled.
Kerry is taking a similar bended-knee approach in trying to get Iran to abandon its nuclear-bomb program.
Talks resumed yesterday after an eight-month lapse, with the United States, along with its Security Council allies and Germany, setting a low bar for success. Merely getting the Iranians to meet again would qualify, one diplomat said.
The American delegation was insulted by being refused a one-on-one meeting with Iranians following joint sessions. Wendy Sherman, the US official who had the last direct meeting in 2009, says she wants another one, but the mullahs are confident enough to say no, realizing there is no penalty.
The main event saw the allies offering incentives, such as lifting sanctions that bar most oil and gold sales, if Iran would shut down some facilities and stop enriching uranium. The offer was more generous than past ones, meaning the West is negotiating against itself.
Kerry also warned that “terrible consequences could follow failure” to achieve a nuclear breakthrough, but the US has been saying that for years. Iran might take the threat more seriously if Kerry got off his knees.
Selling of the prez
Talk about a bargain. Organizing for Action, the new name of the Obama campaign team, is selling access to the president for $500,000. Donors who give or raise that amount get a seat on an advisory board and four meetings a year with Dear Leader.
That’s big bucks, but I think the White House is selling its man cheap — think million-dollar package. For that, donors should get dinner with the president and first lady and, as a bonus, a stern lecture on the evils of wealth.
Chicago bull!@#
Like a drunk fumbling for the light switch, Chicago keeps looking for answers to its murder problem in all the wrong places.
Playboy scion Christie Hefner actually blamed it on global warming, and a liberal think tank called for raising the minimum wage. The group, the Center for American Progress, also blamed “income equality,” saying the creation of more government jobs would reduce violence.
Here’s a tip: Chicago is America’s murder capital and New York its safest big city largely because of different police strategies. The NYPD aggressively gets guns off the street before they are used. Chicago waits for lead to fly and blood to flow, then searches for excuses.
Hey, guud werk, Albany
Headline from an Albany press release: “State Announces myBeneifits Website Now Available in Eight Languages.”
Properly spelled English clearly is not one of the eight.