Did Gov. Cuomo’s $2 billion millionaires’ tax hike of 15 months ago pinch off the public purse as a cash source for election-year spending sprees?
So it would seem. Certainly nobody’s talking direct tax increases as New York’s two-year municipal/state election cycle proceeds.
But that leaves the indirect route, a well-traveled path in a state with an insatiable appetite for free stuff — and a political class dedicated body and soul to supplying it.
And all the better when the tab can be handed to the private sector, which has scant say in the process and no option when it’s over but to pay up or move on.
Think plucked duck, neck in a knot and hanging from a hook in a Chinatown window.
Two major de facto tax hikes are moving through the pipeline right now: A mandatory paid sick-leave bill in New York City and an inflation-indexed minimum-wage statute in Albany.
And a variation on the theme can be found in the promise by Democratic mayoral candidates to revive an effort to transform some 8,000 private-sector school-bus drivers into all-but-in-name-only municipal employees.
First, the bus drivers, who are expected to end a five-week strike today — unqualified good news for 152,000 kids affected by the shutdown, and their parents.
But it’s not so good for the drivers, who were holding out for city job-security and wage guarantees that would’ve effectively made them municipal employees.
They lost. But all the Democrats mounting credible campaigns to succeed Bloomberg have vowed to revisit that outcome as soon as possible.
It’s a stunningly irresponsible promise: The city lays out some $1.1 billion a year for bus services — or about $7,000 per child served. In contrast, Los Angeles — the next most expensive city — spends about $3,100 per child.
Thus New York pays a 125-percent premium for school busing, even though the cost of living in New York is just 20 percent higher than in LA.
The difference is more than an extravagance: It’s a wholly unnecessary, recurring tax hit totaling hundreds of millions of dollars for the benefit of just 8,000 individuals — and their union bosses, of course.
No, the arrangement isn’t identical to the mechanism driving the sick-leave and minimum-wage bills — but the distinctions are minimal.
All three deploy the power of government on behalf of special-interests: In this case, labor.
In fact, the union cat’s-paw Working Families Party is the prime mover of both mandatory sick-pay and the minimum-wage hike.
Kid-glove press coverage — or, more to the point, scant coverage at all — has produced a predictable result: Both measures enjoy considerable public support.
But both also represent lousy public policy.
Each squarely targets employers — that is, job creators. Each promises to impose hefty new costs on small businesses. And each would extract from the economy hundreds of millions that might otherwise go for expansion, growth and future high-wage jobs.
The sick-leave bill — now bottled up (to her credit) by Council Speaker Christine Quinn, but ready to go at a moment’s notice — would cost employers an estimated $800 million a year. And it would require the creation of a stultifying, expensive regulatory system sure to delight City Hall paper-pushers, but also guaranteed to depress the job market.
The minimum-wage hike, now all but certain to become law this year unless Congress passes its own hike first, stands to cost employers at least $1.2 billion in its first year, according to the left-leaning Fiscal Policy Institute. More to the point, a study prepared for the New York Partnership says it will erase 22,000 marginal jobs (mostly from small business) and reduce New York’s gross product by some $2.5 billion over the next decade.
Now whether either bill — or municipalizing private-sector bus drivers — represents sound social policy is something else entirely; certainly that bears discussing.
But if the answer is yes, then simple equity dictates that funding come from general revenues — from an honest tax increase, if that’s what is required.
Discriminatory, special-interest-driven levies have been a way of life in New York for decades — and that’s a prime reason why the state is so lopsided economically.
Big-bucks businesses thrive in Manhattan, but small business struggles everywhere; the middle-class has long since abandoned an economically hollowed-out Upstate — even as unions and other special interests grow fat across the board.
Meanwhile, the leading Democratic mayoral candidates promise more of the same for the city — and various Albany factions compete to make matters worse statewide.
Think of it as an Empire State of mind — economically corrosive and morally bankrupt, but business as usual nonetheless.