Archive for October 2010

To fix NY’s finances, start with gov’t workers – By George J. Marlin

October 23, 2010

The following appears in the October 22-28  issue of the Long Island Business News:

Economic and demographic reports released in recent weeks reveal that New York and its municipalities remain in deep financial trouble despite claims the recession is over and the economy is growing again.

Overall, New York’s picture remains bleak: the state poverty rate stands at 14.2 percent; households earning less than $10,000, 5.1 percent; households receiving food stamps, 12.4 percent; and civilians dependent on public health insurance, a staggering 31.8 percent.

The latest U.S. Census Bureau data places Buffalo as the nation’s third poorest city behind Detroit and Cleveland. The 16th Congressional District, which encompasses the South Bronx, maintains its rank as the poorest in the nation. Buffalo’s median household income is $30,000; the South Bronx’s is $26,700 versus the state’s median of $50,000. Buffalo and the South Bronx, like so many other municipalities in the state, are suffering from the steep decline in blue-collar manufacturing jobs and failed urban development and social policies.

The National League of Cities Report, released in early October, states that 90 percent of America’s city finance officers say their fiscal conditions continue to weaken and will be less able to meet their financial needs and obligations in 2011.

Cities throughout the Empire State are not exempt from these trends. Buffalo, Rochester, Syracuse, Binghamton, Elmira, Jamestown, Schenectady, Troy and Ithaca – one-time centers of commerce, industry and technology – are facing financial and economic doom. They are haunted by declining residential and commercial real estate values, restrained consumer spending, high unemployment, increasing public employee health care costs and pension contributions, and unfunded state mandates. Surprisingly, upstate property taxpayers pay effective rates nearly as high as those in the suburbs.

With no end to their fiscal woes in sight, these cities will have to make additional personnel and service cuts and perhaps even raise taxes. And if such measures are implemented, more economically distressed, overtaxed citizens will join the 1.2 million people who have left New York since 2000 to seek jobs in the low-tax South and Southwest regions.

Another depressing report released on Oct. 5 by New York Comptroller Thomas DiNapoli confirms there will be slow recovery from the recession. Here are some of his gruesome findings:

  • The rate of job growth is slowing and is expected to remain weak;
  • Consumer confidence in New York has fallen to its lowest level since the spring of 2009;
  • The rate of tax revenue growth alone will be insufficient to solve New York’s budget problems;
  • The securities industry continues to shed jobs. Wall Street lost 4,200 jobs this year, bringing the loss since January 2008 to 31,300 jobs.

Most disturbing: Personal income in 2009 for New York private sector workers dropped $42 billion, a 6.8 percent decline, while the personal income of public sector employees increased $240 million, an increase of 2.5 percent.

Also, the DiNapoli report states, “New York lost jobs in every sector except educational and health services, which added nearly 60,000 jobs.” In other words, while private sector employees have endured serious hardships, state and municipal employees have prospered.

Reviewing these numbers, E.J. McMahon, of the Manhattan Institute, asked: “What is wrong with this picture? If you’re in the private sector, we’re paying more in part so [government] workers can keep getting pay increases. That’s the part that really stings.”

Private sector workers can no longer afford to bear the brunt of the cost of New York’s state and municipal leviathans. If the next governor is serious about restoring fiscal integrity, right-sizing government and not raising taxes, he must use the vast powers of his office to make sure that public sector employees share the sacrifices necessary to achieve that end.

The Empire State can no longer afford the government we have and its costs must be reduced.

Advertisements

America’s First Catholic President – By George J. Marlin

October 21, 2010

This article I wrote appears on The Catholic Thing web site on October 20, 2010.

Joe DioGuardi not a Rockefeller Republican – By George J. Marlin

October 7, 2010

The following appears in the October 8-14  issue of the Long Island Business News:

Since winning the Republican primary for the special U.S. Senate election, early polls indicate former Hudson Valley Congressman Joe DioGuardi is within striking distance of Democrat Kirsten Gillibrand.

When asked about these startling numbers, the campaign staff of our unelected junior senator released this reply: “We … know that as New Yorkers get to know Congressman Joe DioGuardi, they will see he is way, way, way out of step with even traditional Rockefeller Republicans in New York.”

What a strange comment. First of all, most “traditional Rockefeller Republicans” are dead; the former governor died in 1979. Secondly, Nelson Rockefeller, who served as governor for 14 years (1959-1973), was a liberal who created most of the reckless fiscal gimmicks that have brought New York to the edge of bankruptcy. Third, DioGuardi is a mainstream conservative who has proudly been out of step with Rockefeller Republicans and proudly fought their big spending programs his entire career.

Gillibrand and her staff members are probably too young to remember the financial chaos Rocky wreaked on New York, so here’s a little historical background for them to ponder:

During his tenure as governor, Rockefeller went on the greatest spending spree in the state’s history. He earned the distinction of having requested more tax increases than any governor before or since he left office. No fewer than 18 tax bills were enacted between 1959 and 1973.

To maintain the “pay-as-you-go” front, Rockefeller utilized inaccurate revenue projections, tax deferrals and accelerated payment schedules – all fiscal gimmicks designed to achieve on paper the state constitutional requirements of a balanced budget.

To circumvent the constitutional mandate that general obligation debt be submitted for voter approval, Rocky started using various existing and new state agencies to issue debt to pay for his building schemes.
Rocky would persuade the board of an agency to construct a building that would be leased to the state. The lease payments, which coincidentally covered the principal and interest due on the bonds issued to finance the building, would come out of the state’s general operating budget. Although the state is technically obligated to pay off the agency’s bonds according to the terms of the lease, it is not considered a state general-obligation debt, and therefore – again technically – voter approval is unnecessary. Thus was Rocky able to have his cake and eat it, too.

The fearless Rockefeller began his first term by pushing through legislation called the New York Housing Finance Agency, the first of 230 agencies and authorities he created that incurred debt by 1973 of $12 billion.

When Rockefeller entered office, his first budget was $2 billion; when he left office, his last budget was $8.7 billion. New Yorkers were the most heavily taxed citizens in the nation, and their state had the highest public debt in the nation. Democrat Hugh Carey, analyzing the financial disaster he inherited when he was sworn in as governor in January 1975, concluded: “I’ve seen delicatessens in bankruptcy in better shape than the state of New York.”

Since 1975, Republicans have been exorcising the intellectually bankrupt Rockefeller tradition from the state GOP. For instance, in 1980, Al D’Amato – a Gillibrand mentor – knocked off the most notorious Rocky liberal, Sen. Jacob Javits, and went on to serve 18 years in the senate. In 1984, Conservative Joe DioGuardi proved how the tide had turned when he was elected to the Westchester congressional seat that included the ancestral home of the Rockefellers, Pocantico Hills.

Gillibrand is really out of touch if she believes painting DioGuardi as too fiscally conservative for Rockefeller. The last supporters of big government in this state are Gillibrand and the public employee unions who support her. And if she sticks to that line, expect a surprise Tea Party victory in November.

Life Issues and the Mid-Term Elections – By George J. Marlin

October 7, 2010

This article I wrote appeared on The Catholic Thing web site on October 6, 2010.

A tale of two pities: Buffalo and the South Bronx – By George J. Marlin

October 3, 2010

This article I wrote appears in the New York Post on October 3, 2010.