Archive for the ‘Articles/Essays/Op-Ed’ category

Rich targeted to fund Albany’s spending frenzy – By George J. Marlin

April 7, 2021

The following appeared on Monday, April 5, 2021 on The Island Now’s website:

Shortly after Gov. Andrew Cuomo closed down New York’s economy in March 2020, he whined that the state’s budget deficits in 2020 and 2021 could be $12 billion to $14 billion due to declining tax revenues.

Well, what did he expect? After all, hundreds of thousands of people were laid off, tens of thousands of small businesses closed (many forever) and tourism came to a halt.

Sales taxes from restaurants alone were down over $2 billion in 2020.

In addition, people fleeing New York City caused rental apartment vacancies to increase to 5 percent in January 2021 vs. 2 percent a year earlier.

As for commercial real estate, with huge numbers of white-collar workers operating remotely from home, scores of companies downsized their office space as leases expired. In Manhattan, new leases dropped 70 percent in 2020 and the vacancy rate hit 13 percent —the highest level in 24 years.

As a result, State Comptroller Tom DiNapoli reported a 10 percent drop in billable assessed commercial property taxes. This phenomenon, DiNapoli noted, is the biggest decline in the recorded history of New York commercial real estate.

Even Mayor Bill de Blasio had to step out of his ideological bubble and recognize this growing problem. In his budget proposal for the fiscal year that begins on July 1, 2021, he has projected a $2.5 billion drop in commercial real estate tax collections. And that number is probably too low.

It should be noted, that Gov. Cuomo exaggerated when he claimed that deficits could hit $12 billion to $14 billion. Because Cuomo did not factor in $6 billion in reserves that could be tapped in extraordinary times, the deficits would be in the range of $6 billion to $7 billion.

No doubt Cuomo threw out inflated numbers to pressure the Feds for plenty of stimulus aid. (Getting north of $12 billion in one-shot dollars would balance the budget for the fiscal year that ended March 31 and the budget for the next fiscal year, which is coincidentally an election year.

In March, Cuomo lucked out. Senate Majority Leader Chuck Schumer was able to procure $12.6 billion in unrestricted funding, permitting Cuomo to announce there was no need for tax increases or spending cuts.

But that good news fell on deaf ears in Albany. Spending $177 billion in the 2020-2021 fiscal year — which is twice the expense budget of Florida, with 22.2 million people vs. our 19.3 million — is too little for the Legislature’s Democratic majority.

Leftists are calling for a 22 percent spending increase to be funded by higher taxes on the so-called rich that include: raising the millionaires tax to 9.85 percent for incomes over $1 million, growing to 11.85 percent for people earning more than $25 million annually; increasing the estate tax from 16.5 percent to 20 percent; a 1 percent capital gains tax on people earning more than $1 million annually; a tax on New York City second homes.

Nicole Gelinas of the Manhattan Institute has pointed out that these proposed taxes on “a single filer with $1 million in income would see a 23 percent state tax hike…. A filer making $10 million would see a 48 percent hike….”

Combined state and New York City income taxes for a millionaire would hit an astounding 15.75 percent. Adding the expected increase in federal income tax rates to 40 percent means a person’s total payout would be 55.75 percent.

Sadly, a letter to Albany officials signed by 250 business leaders that employ 1.5 million people warning that “ultimately these new taxes may trigger a major loss of economic activity and revenues as companies are pressured to relocate operations to where the talent wants to live and work” has been ignored.

And since the top 1 percent of taxpayers — about 60,000 filers — pay 43 percent of the state’s personal income tax, if only 5,000 move out, New York’s tax base could be wrecked.

As I write this column on Saturday, April 3, New York missed the March 31 deadline to pass a budget. Hence, the fiscal picture is very fluid. But Cuomo, weakened by the nursing home scandal, may surrender to the radicals to maintain his lease on the governor’s mansion.

If the “soak-the-rich” ideology prevails, New York will not be able to sustain its spending spree and will hit a state of fiscal despair once the one-shot federal stimulus money runs dry.

Survey Shows US Catholics’ Growing Concern About Global Persecution of Christians – By George J. Marlin

April 1, 2021

This article I wrote appeared on the Newsmax.com web site on Thursday, April 1, 2021.

Curran balances two Nassau budgets – By George J. Marlin

March 24, 2021

The following appeared on Monday, March 22, 2021 on The Island Now’s website

When serving as county executive, the convicted felon Ed Mangano failed to grasp the precepts of Generally Accepted Accounting Principles as it pertains to balancing Nassau’s operating budget.

Discovering his disinterest in learning the ABC’s of GAAP during my tenure as a director of the Nassau Interim Finance Authority, I was not surprised. After all, Mangano’s Republican predecessor, Tom Gulotta, drove the county to the brink of bankruptcy in the 1990s with his reckless spending and chronically unbalanced books—resulting in the very need for NIFA’s existence.

Like Gulotta, Mangano foolishly thought one can balance a budget by borrowing money to fill in the deficit hole.

This approach, however, is a violation of the fundamental principle taught to every student in Accounting 101: Borrowed money is not revenue.

Why? Borrowing only kicks the fiscal can down the road. It is like drawing down your VISA card line of credit to cover your mortgage payment. You are still in debt for the amount of the mortgage. And if you continue this practice, eventually you go broke.

Mangano was back on the road to fiscal perdition when NIFA declared a control period in 2011 and began to guide the Mangano administration toward achieving a GAAP-balanced budget.

Mangano fought NIFA tooth and nail, and when he left office in disgrace, the county’s operating budget was still structurally unbalanced.

When Democrat Laura Curran took office in January 2015, she inherited a fiscal mess and had to continue running deficits.

But, working with NIFA, and thanks to a strong economy, Nassau’s operating deficits on a GAAP basis began to significantly decline.

Since Curran has taken office, the deficit declined to $61.2 million in 2018 and in 2019 the county incurred for the first time in years a GAAP operating surplus of $76.8 million.

However, that major achievement, appeared to be in jeopardy due to the onset of the Coronavirus pandemic in March 2020.

In its August 2020 review of the county’s multi-year fiscal plan, NIFA painted this dreary picture: “Nassau County had been making progress toward resolving its fiscal problems before the onset of COVID-19 pandemic…. An examination of the county’s finances shows that the COVID-19 pandemic causes … financial problems. The threats manifest in projected risks that if not addressed could result in deficits of approximately $334.2 million in FY 2020 and $481.4 million in FY 2021.”

The good news for county residents is that the fiscal picture changed dramatically by December 2020, and it looks like when the books are audited, there will be a GAAP budget surplus for 2020 between $45 and $75 million.

While total income is projected to be $3.239 billion, down $320.7 million from the 2020 modified budget, total expenses are projected to come in at $3.164 billion, a decrease of $395.7 million.

The biggest savings, $152 million, were in salaries and fringes from vacancies, health insurance costs, and offsets to costs paid for by CARES Act funding.

Curran effectively managed the payroll and proved, that the county government could deliver services with less people—even in an emergency.

Granted, the federal COVID aid received in 2020, and the debt service savings are one-shot revenues. Nevertheless, incurring any GAAP surplus in 2020 is a major victory and a far cry from the projected GAAP deficit of $334.2 million.

With the economy bouncing back in 2021, Curran will have the opportunity to continue restoring financial stability to the county, particularly if she does not surrender to the municipal unions in an election year and continues to manage the employee headcount effectively.

One suggestion for the county executive to ponder: Since the $300 million from the 2021 federal COVID Relief Act the county will receive is a one-shot revenue, how about using that money to settle the $300 million in Tax Certiorari claims? In 2020, the county was able to balance the budget with far less in COVID relief due to the loophole which sent over $100 million to the Town of Hempstead rather than the county. This year the county is receiving the full amount, which can result in a windfall considering that it wasn’t contemplated in the adopted 2021 budget in nearly that amount.

Using the money to settle old claims would eliminate the need to burden taxpayers with more long-term debt, and could bring an end to the need for extending the NIFA control period any further than necessary due to the outstanding uncertainty. The county executive could, in that way, add a third balanced budget to her record and put the county’s elected officials in the position of being able to determine their own fiscal fate for the first time in a decade.

That’s what I call a genuine twofer. Think about it, Mrs. Curran.

Nothing ‘Imaginary’ About Antifa’s Legacy of Real Violence – By George J. Marlin

March 18, 2021

This article I wrote appeared on the Newsmax.com web site on Thursday, March 18, 2021.

Can Republican Congressman Lee Zeldin Beat Governor Andrew Cuomo in 2022? – By George J. Marlin

March 2, 2021

This article I wrote appeared on the Newsmax.com web site on Tuesday, March 2, 2021.