DiNapoli waves red flag on NYC revenue loss – By George J. Marlin

Posted August 12, 2020 by streetcornerconservative
Categories: Articles/Essays/Op-Ed, Blank Slate Media

The following appeared on August 10, 2020 on The Island Now’s website:

In early August, State Comptroller Thomas DiNapoli released a 43-page analysis of New York City’s economic and fiscal trends. His perceptive report should be read by every local official facing an operating budget deficit.

Here’s an overview of DiNapoli’s findings:

Two months after Gov. Cuomo ordered the shutdown of the New York City economy, 940,000 workers lost their jobs. The city’s unemployment rate, which hit an all-time low in February of 3.4%, had skyrocketed to 20.4 percent by June.

The hardest hit: bars, restaurants and hotels. That sector lost 304,000 jobs by the end of April.

Retail lost over 90,000 jobs.

Those sector losses explain why the highest unemployment is among minorities and young people living in the Bronx. Unemployment in that borough has hit 24.7 percent.

The DiNapoli report goes on to describe the shutdown’s devastating impact on the city’s fiscal condition.

In June, the city estimated that its two-year revenue loss will be at least $9.6 billion—and that’s a low-ball number.

Those estimates do not factor in money that may not arrive from Albany. If the state does not benefit from a new COVID-19 relief bill, the city could lose up to $3 billion in aid.

Urging the mayor to face fiscal realities, DiNapoli concludes his report with these words: “Given the size of the budget risks outlined in this report … the Office of the State Comptroller urges the city to prepare additional actions to balance the budget.”

What actions has Mayor de Blasio taken to balance the city’s budget? So far, it has been mostly fiscal sleight of hand.

He has raided trust fund reserves to the tune of $1.3 billion. The total drawn down could hit $4.1 billion.

The city has also reduced its reserve for collective-bargaining agreements by $1.6 billion. (This is a dubious reduction, considering de Blasio’s history of giving away the store to non-police unions.)

Since de Blasio took office, the city workforce — the largest of any municipality in the nation — has grown by 24,000 bureaucrats for a total of 325,000.

The mayor’s latest plan assumes the number of employees will drop by a paltry 3,656. Most of those, no doubt, will be police and school principals retiring because they are disgusted with the mayor’s inept crisis leadership.

Instead of cutting out the lard in the city’s bureaucracies to balance his budget de Blasio wants to raise taxes on the wealthy.

Prior to the pandemic, 1 percent of the city’s 4 million households—that’s 40,000—paid 50 percent of the city’s income tax.

However, since March, scores of residents living in the city’s wealthiest neighborhoods have fled to their weekend homes in Long Island, upstate, Connecticut and even Vermont.

Gov. Cuomo, realizing the city is losing revenue, has been urging them to come back.

But Cuomo has conceded that his pleas have been falling on deaf ears. Many have said to him that if they stay in their vacation homes, “I pay a lower income tax, because [I] don’t pay the New York City surcharge.”

The governor rightly dismissed raising taxes on the rich because he knows that even if a few thousand of the city’s wealthiest households pull up stakes, the city’s tax collections will crumble.

De Blasio rejected the governor’s position saying: “To the point about the folks out in the Hamptons, I have to be very clear about this. We do not make decisions based on the wealthy few…. That’s not how it works around here anymore.”

The delusional mayor went on to say that the wealthy can afford to pay more in taxes and that many of them would be happy to do so.

During de Blasio’s reign, expenditures have increased by over $20 billion —3 times the rate of inflation. And the mayor’s spending spree was funded by tax revenues from the top 1 percent.

De Blasio is incapable of grasping that the city is dependent on revenues from the wealthy because middle-class jobs have declined significantly in recent decades, and lower-income folks if they are lucky enough to be employed, pay little in local taxes.

De Blasio and regional officials better heed DiNapoli’s warnings and find ways to do more with less.

But if they fail to right-size government and raise taxes on the well-off, they will alienate the very people who have the financial resources to pack up and quit New York.

New York’s Charter Schools and Their Enemies – By George J. Marlin

Posted August 3, 2020 by streetcornerconservative
Categories: Articles/Essays/Op-Ed, Newsmax

This article I wrote appeared on the Newsmax.com web site on Monday, August 3, 2020.

The Unique Coronavirus Recession – By George J. Marlin

Posted July 28, 2020 by streetcornerconservative
Categories: Articles/Essays/Op-Ed, Blank Slate Media

The following appeared on July 28, 2020 on The Island Now’s website:

The 2020 recession Americans have been enduring is very different from past downturns.

First and foremost, the economic shutdown was induced by government fiat.

But the shutdown was selective in nature. Amazon and the big box stores (Costco, Walmart, Target), which were permitted to remain open, have been doing pretty well financially throughout the crisis.

In the case of Amazon, it has done extraordinarily well. The value of the Amazon stock owned by Jeff Bezos, went up $13 billion one day in mid-July.

The Big Government crowd approve of big stores because their corporate chiefs, who fear boycotts and public denunciations, are easily intimidated.

Hence, the section of the economy disproportionately damaged—small businesses. (Since they are hard to control, Big Government types despise small shops almost as much as they loathe suburban single- family homes.)

A study issued by the Partnership for New York City estimates that one-third of the city’s small businesses—that’s 80,000—may not reopen. That translates into several hundred thousand working-class folks pounding the streets looking for a job.

The news gets worse.

The Wall Street Journal, in an article titled “More Restaurants Forced to Close as Virus Fears Diners Away,” reported that between March 1 and July 10, 2020, over 1,250 New York restaurants have closed permanently.

Only Texas and California — whose combined population is three and a half times greater than the Empire State — have experienced more closings, 1,300 and 2,250, respectively.

Fisher and Phillip’s National Hospitality Practice Group has noted that in August there can be more restaurant closings in New York if the Paycheck Protection Program grants to save jobs runs out. Also, many landlords who offered rent deferments of a few months want to be paid in August.

The Nassau and Suffolk COVID-19 Economic Impact Report released by the two County Executives on July 8, 2020, also paints a dreary picture.

The study states that “net job losses to date total 220,000 and may reach as high as 375 thousand in 2020, reducing local earnings by as much as $21 billion and local economic activity by $61 billion.”

So far, 8 percent of Long Island businesses have closed and the hospitality sector — food and drink services — has been hardest hit.

This helps explain why the highest unemployment on Long Island is among the working class — particularly Hispanic workers.

The selective nature of the coronavirus pandemic closings is wreaking havoc on Main Streets throughout Long Island.

Retail space vacancies are hitting all-time highs — north of 20 percent — which in turn means commercial real estate values will drop and many owners may have no alternative but to default on their mortgages.

Here’s another reason why the recession is unique:

In past downturns, people stopped spending because they were unemployed. Hence, the government often stepped in with deficit spending to jumpstart the economy in order to get people back to work so they could resume spending.

However, as economist Arnold Kling, writing in National Affairs, noted, “In [2020], the government has been more concerned with slowing the spread of the virus, and policymakers actually prefer to see ‘unessential’ consumption activities curtailed. In a typical recession, construction and durable goods manufacturing experience the sharpest decline, while service industries stay relatively stable. In this case, in-person services have been among the hardest hit sectors of the economy.”

Retail and restaurants have been suffering because those lucky enough to be employed with disposable income are staying home and not spending locally.

And their spending habits are changing.

Many, myself included, are ordering more online and are not in a rush to dine indoors. As for outdoor dining, it has not been appealing in 90-degree weather and will not be feasible come November.

In addition, Gov. Cuomo has further hindered restauranteurs by dictating what constitutes a bona fide meal.

Sadly, the coronavirus pandemic will have a lasting impact on New York’s economy—particularly on Long Island. Thanks to poorly-conceived government policies, Main Street shopping may become a relic of a quainter age.

The New Marxist Totalitarians? – By George J. Marlin

Posted July 17, 2020 by streetcornerconservative
Categories: Articles/Essays/Op-Ed, Newsmax

This article I wrote appeared on the Newsmax.com web site on Friday, July 17, 2020.

Independence Day Reflections On Our Freedom and Liberty – By George J. Marlin

Posted July 3, 2020 by streetcornerconservative
Categories: Articles/Essays/Op-Ed, Newsmax

This article I wrote appeared on the Newsmax.com web site on Wednesday, July 1, 2020.