Archive for April 2011

Blue NY gets a red budget – By George J. Marlin

April 21, 2011

The following appears in the April 22-28, 2011 issue of the Long Island Business News:

As a Conservative, I did not have high expectations that the final budget hammered out in Albany by the “three men in the room” (the governor, Assembly speaker and Senate majority leader) would come to terms with the state’s fiscal plight. Because I’ve witnessed so many pols who promised fiscal reform sell taxpayers down the river, I can’t help being cynical.

Take Gov. George Pataki, whom I enthusiastically supported in 1994.

In Pataki’s first term he engineered significant reductions in spending and unprecedented tax cuts. These actions contributed to New York’s economic rebound in the 1990s.

Unfortunately, the will to permanently change Albany’s tax-and-spend mentality dissipated in 1997 as Pataki and his staff concluded betraying Conservatives and the fiscal responsibility entrusted to him in 1994 was OK in order to hold onto power.

This attitude, plus Pataki’s increasingly disengaged, uninterested approach to governing, led to the discarding of his pledges to cut Medicaid spending, to avoid one-shot fiscal gimmicks, to stop back-door borrowing, to impose no new taxes or fees, and so on.

Pataki’s lackadaisical governing style also encouraged the Legislature to thumb its nose at him. The Legislature added billions to his budgets, overrode his vetoes and imposed on New Yorkers the biggest single tax hike in the state’s history. The size of the state budget during his tenure increased 83 percent – 2.12 times the inflation rate – and is a big cause of the fiscal mess the state faces today.

In the Spitzer-Paterson years, the spending spree continued. Expenditures swelled over three times the rate of inflation.

Enter Andrew Cuomo who promised in his new New York agenda to get the state’s fiscal house in order without raising taxes and fees, or issuing long-term debt.

Conservatives were floored when Cuomo unveiled on Feb. 1 a budget that kept his pledges and eliminated a projected $10 billion deficit. But the question skeptical Conservatives throughout the state asked one another was, Will Cuomo blink? Will he surrender to Speaker Sheldon Silver and his tax-happy conference to get a budget passed on time?

To our surprise, Cuomo’s hard-nosed negotiating and his threat to use his immense executive powers to the fullest if there was no budget on April 1 – including a “take it or leave it” one-week budget extender that would include his full-year cuts – prevailed.

The governor’s 2011-2012 budget deal includes real spending cuts of about 2 percent ($3.5 billion); caps on Medicaid and education spending, which were statutorily slated to increase 13 percent, at 4 percent; and no tax or fee increases. Also, by closing six prisons and cutting and consolidating agencies, the govenor will reduce their operating costs by 20 percent.

Cuomo didn’t get everything he wanted. He gave up the $250,000 cap on malpractice suits to Silver and threw Sen. Dean Skelos a bone by restoring $250 million in education funding. Overall, the deal complied with the Ronald Reagan negotiating rule of settling for at least 80 percent of the loaf.

Despite its imperfections, enacting the first flat budget in 15 years in a state as politically “blue” as New York is a remarkable achievement and should be applauded by all Conservatives. Cuomo obviously wants to distinguish himself from typical tax-and-spend Democrats like the governor of Illinois, who increased his state’s income tax by 60 percent to balance his budget.

Since taking office in January, Cuomo has proven he possess excellent political skills. New York Conservatives now hope the governor’s skills to manage the implementation of his fiscal blueprint are just as sharp. There may be hope for the Empire State after all.

Catholics and the Civil War – By George J. Marlin

April 20, 2011

This article I wrote appears on The Catholic Thing web site on April 20, 2011.

The Kessel NYPA Watch, April 17, 2011 – By George J. Marlin

April 17, 2011


At a Western New York event on Wednesday, April 13, 2011, Governor Cuomo signed into law one of his leading energy initiatives, “Recharge New York” legislation which passed with bipartisan support and will reduce the utility bills of companies, hospitals and other not-for-profits.  According to Newsday, “The new program cuts an employer’s bill over the life of the seven-year contract with the state-run New York Power Authority.”

Since Kessel considered “Recharge New York” a pet project, his absence from the bill-signing event was most conspicuous.  In fact, Kessel and NYPA were not even mentioned or quoted in the governor’s press release.  All calls to NYPA’s press office were directed to the governor’s communications office.  One Street Corner correspondent reported that Kessel’s self-aggrandizement “Recharge New York” extravaganza was shelved.

A review of the governor’s website reveals no mention of Kessel’s name in any press release this year although other agency heads and commissioners are named in various announcements.  This Kessel media blackout was in effect even before word of the state Inspector General’s investigation of Richie was publicly reported.

At the last NYPA public board meeting on April 4, 2011, uncharacter-istically, Kessel did not say a word but listened chastened to new trustee John Dyson and the other NYPA trustees and NYPA senior staff discuss projects.  Following the meeting, Richie declined to answer media questions.  This behavior is bizarre for a person who has devoted his public career to governing by press release, blabbing to reporters and creating and attending public events where he can be the center of attention.

Finally, NYPA’s April 4 announcement of hydropower allocations to companies around the state, including Yahoo!, quoted Chairman Townsend and Trustee Dyson but not Kessel.  Shockingly, there was no NYPA press release on the changes approved to the controversial HTP project that Kessel has advocated for and of which the NYPA board required major reworking at the April 4 board meeting.  Things sure have changed recently at NYPA.  But there is one break in the media blackout.  Typically, Richie’s blog’s latest post is dated March 14—from Stony Brook, Long Island.

Here are some questions Street Corner has received from its correspondents:

Has Kessel been muzzled by the NYPA board?

Has Kessel been removed as a negotiator on NYPA deals?

Can he run NYPA now that he has been so publicly discredited?

Is Kessel too busy answering Inspector General inquiries to attend public events?

Is Kessel too busy emptying out his office and updating his resume?

Will Kessel’s government service, which has been marked by the wasteful expenditure of billions of dollars, soon end not with a bang but with a whimper?

Street Corner Conservative invites NYPA employees to post why they believe the once omni-present Kessel has become a recluse.

Time to put an end to rent control – By George J. Marlin

April 8, 2011

The following appears in the  April 8-14, 2011 issue of the Long Island Business News:

Assembly Speaker Sheldon Silver is revving up his minions to battle for yet another renewal of that World War II relic – rent control.

In September 1943, the federal government’s Office of Price Administration brought New York under wartime rent controls.  This interference in the real estate market, Washington promised, was to be only a temporary measure.

In 1950 federal controls were lifted, but New York – unlike all other major cities – kept the controls in place.  “As a result,” housing expert William Tucker reported, “[New York] City essentially missed the postwar boom in housing construction.  [By 1990] more than 60 percent of New York’s housing [was] more than 60 years old.”

Not only did rent control discourage entrepreneurs from investing in new multifamily housing projects, it also encouraged landlords to defer maintenance and led many to just walk away from unprofitable properties. In the 1970s, for instance, over 250,000 apartments were abandoned in New York City.  Tucker observed that “in no other city except New York has housing been lost during a housing shortage.”  By 1993, the largest owner of rundown apartment buildings was the City of New York.

This system also discouraged people from moving because they were reluctant to give up their below-market rents.  In March 1990, The Washington Times reported that the poor suffer under this program, while wealthy people take advantage of these “anti-housing regulations.”

In 1997 when there was an opportunity to abolish the control law or to significantly modify it, Gov. George Pataki – who had pledged not to give in to political pressure – disappointed Conservatives when he surrendered to leftist foes.

Commenting on the Pataki capitulation, the Daily News concluded, “the tenant side, championed by Assembly Speaker Sheldon Silver, beat back all but a few of the landlords’ demands for change.  The legislation left largely intact the protections New Yorkers have relied on since 1943.”

Since that time, the state Legislature has routinely extended rent control laws without a fuss and as a result, the government still regulates more than 1.1 million apartments in New York City and thousands of units in Nassau County including Great Neck, Long Beach and Glen Cove.

With the present law set to expire on June 15, there is talk of eliminating the vacancy decontrol mechanism which kicks in when rent exceeds $2,000 a month.

Back in 1993, liberals signed on to the $2,000 decontrol clause – which has liberated over 100,000 city apartments during the past 18 years – because they figured it would only affect rich people.  However, with that monthly nut now common to tenants across the economic spectrum, they have changed their tune.

Eliminating or increasing the ceiling will harm both tenants and the real estate industry.  At the present time, rent control regulations cause approximately 13 percent of regulated apartment buildings to incur annual financial losses.  More stringent guidelines would only exacerbate this situation and force additional cutbacks in tenant services and building maintenance.

It’s time to liberate New York housing. “In reality,” the Manhattan Institute’s Nicole Gelinas has observed, “the best thing for the vast majority of tenants would be an accelerated end to all price controls. … The end of rent laws would increase supply, pulling down prices on today’s nonregulated units.” The end of rent control would also lead to a surge in investment in housing at a time when construction labor unemployment rates are high.

Senate Majority Leader Dean Skelos has been telling Conservatives that he and his GOP conference have “found their way” and will no longer pursue Democratic-lite policies.

If Republican senators wish to be true to their word, they now have an incredible opportunity to strike a blow for freedom and to promote new investments in rental housing by either letting the rent control laws sunset or insisting on genuine free market reforms.

Man, the Social Animal – By George J. Marlin

April 6, 2011

This article I wrote appears on The Catholic Thing web site on April 6, 2011.