The following appears in the September 18-24, 2015 issue of the Long Island Business News:

The Case-Shiller Home Price Index released this month reveals that close to half of single family homes in New York’s metropolitan region have been losing value.

This should not come as a surprise to Long Islanders. Since the end of the Great Recession, with the exception of high-rent districts, most real estate sectors — particularly starter homes for young families—have not been doing well and have not recovered from the 2008 crash.

In 2014, values on Long Island homes edged up less than 1 percent. This anemic result included a 6 percent gain in the highest-end homes in Nassau and western Suffolk County.

Home values in working class areas have been going nowhere for several reasons:

First and foremost: high property taxes. In my neighborhood, New Hyde Park, a starter house, which is often a post-World War II Cape Cod that has not been dormered or expanded, goes for $500,000 and its tax levy is around $10,000 annually.

A potential buyer making the area median annual income of $107,000, who hopes to take on a $400,000 mortgage at 3.875 percent, will have to make a monthly payment of $1,432. Add to that $400 a month for home and auto insurance and $500 for utility and car payments and the annual expenses before property taxes is $27,984. That’s a big number but doable if the buyer is frugal.

But when the taxes are factored in, the annual payout leaps to $37,984—a tough nut to crack when supporting a family on a $100,000 a year gross income. As a result, working class buyers are not willing to pay top dollar for houses and sellers are forced to drop prices.

Another reason why homes are not increasing in value is changing buyer habits. During the frenzy buying years before the 2008 crash, many people paid big numbers for houses even if they needed extensive improvements. Nowadays, if a house is not in “move-in” condition, shoppers will discount their offer. In other words, if the market value of a home is $500,000 and a buyer estimates it needs $100,000 in repairs, the bid for the home could drop to $400,000.

Finally, home prices are declining in areas where the commute to New York City is perceived to be too long. Back in the 1950s, couples moved to eastern Long Island because they could find affordable housing. The trade-off, however, was enduring commutes to the work place. It was not unusual for a commuter to get up each morning at 4:30 a.m., drive to a L.I.R.R. station, catch a train to Penn Station, then take a subway to the office and hope to be in by 9:00 a.m. The return trip would not get the commuter home until nearly 8 p.m.—in time to get a bite to eat and to get ready for bed.

Many people under 35 are not interested in long commutes.

They want to get to work in under half an hour. They are not willing to sacrifice leisure time to own a sizable and affordable house. Instead they’d rather be squashed in a small apartment close to their place of work. (Many young job applicants I’ve interviewed have left my office in a state of shock after I’d described my daily high school commute in the 1960s which entailed taking two city buses an hour and 15 minutes each way.)

The aversion to commuting plus the decline in local working class jobs helps explain why some communities in eastern Long Island have rundown homes that are hard to sell and are slowly turning into ghost towns.

High taxes, a shrinking job base and the exodus of young people are impairing property values. And if the insouciant political class doesn’t wake up and address the crisis, Long Island will eventually have only two classes—the wealthy and their servants.

The following appears in the September 4-10, 2015 issue of the Long Island Business News:

After the fall of Napoleon, delegates to the Congress of Vienna restored to the French throne the Bourbon heir, Louis XVIII. The King, an obstinate man who surrounded himself with bitter reactionaries, did not last in power. The wily French diplomat, Charles Maurice de Talleyrand quipped, “the Bourbons learnt nothing and forgot nothing.”

Talleyrand meant the King did not learn anything from the beheading of his brother, Louis XVI, and his sister-in-law, Marie Antoinette, in 1793; and during two decades of exile, he did not forget any of his grudges.

It now appears Nassau County’s Republicans, like the Bourbons, have learned nothing from the voter-imposed exile they endured between 2001 and 2009; nor did they forget the fiscal and political antics they employed that brought Nassau to the edge of bankruptcy in the 1990s.

Readers will recall that 30 years of Republican mismanagement, institutional corruption, cronyism and budgetary tricks, caught up in 1999 and the county executive, exposed as the emperor with no clothes, had to go hat in hand to Albany to beg for a bailout.

To help salvage Nassau’s GOP, Gov. George Pataki, in 2000 gave the county government $100 million to help balance their books and created the Nassau Interim Finance Authority (NIFA), a budgetary oversight board with the power to provide the county with budgetary relief, to transmit state assistance and to issue bonds.

However, the financial lifeline did not save the GOP at the polls in November 2001. Irate voters overwhelmingly booted them out. They lost the county executive and comptroller offices and their majority in the Nassau County Legislature.

Eight years later, thanks to the Tea Party movement, Republicans were given a new lease on life. By a very slim voter majority, they gained back the county’s executive and legislative branches.

Repentant GOP County Executive Edward Mangano promised a new municipal era in which the taxpayers would come first. But it was not to be.

Rather than balancing the budget in accordance with Generally Accepted Accounting Principles (GAAP), the Mangano Administration reverted to the deceptive financial practices of the 1990s. It also doled out lavish raises to favored employees and gave away the store to government unions and the politically connected.

Now the law is breathing down the neck of Mangano and his GOP confreres. Scores of U.S. Attorney subpoenas have been issued. Mangano, government vendors, the county’s flawed bidding process, and the financial records of Republican clubs are being investigated.

There’s more: a Newsday investigation revealed that a $17 thousand Mangano vacation was arranged and paid for by a Long Island businessman—and the County Executive has thus far refused to deny the allegation.

In late August, it was reported that Mangano approved hundreds of no-bid contracts totaling $10 million that came under the $25,000 threshold for legislative review and approval. Many “personal service” contracts were awarded to political cronies and contributors.

Mangano’s hometown of Oyster Bay is also in the sights of the Securities and Exchange Commission (S.E.C.) and the U.S. Attorney. The GOP-controlled township may have violated Article 8 of the New York State Constitution which reads in Section I, “No…town…shall give or loan any money or property to or aid any individual or private corporation…or loan its credit to or in aid of any…individual or private corporation….” Not only do records show that the Town of Oyster Bay guaranteed a vendors loan in the case of default, it appears the contingent liability was not disclosed to independent auditors and not revealed in the town’s official statement when issuing bonded debt. Complaints have already been filed with the S.E.C. which takes very seriously breaches of municipal fiduciary obligations.

Nassau’s Republicans learned nothing from the debacle they abetted in the 1990s. But this time instead of being voted out of office, they may be escorted out of office in handcuffs.

The following appears in the August 21-27, 2015 issue of the Long Island Business News:

In March 2013, I wrote a feature essay for LIBN titled “L.I. Power: The Political Hot Potato” describing decades of awful policy decisions made by cowardly state officials concerning the generation distribution and maintenance of our electrical power.

Claims by two governors, Mario Cuomo and George Pataki, that state control—AKA LIPA—would lead to better accountability and transparency proved to be false. LIPA became a dumping ground for the relatives of the politically connected seeking high paying jobs and, by 2013, LIPA customers were paying $460 more for electrical power each year than they did 10 years earlier.

The effects of years of neglect that became evident in the aftermaths of Hurricane Irene and Hurricane Sandy forced Gov. Andrew Cuomo to find scapegoats and to make major changes.

True to form, the governor appointed a Moreland Commission to confirm his pre-determined position. In a hastily prepared 16-page preliminary report released in January 2013, the Commission concluded that LIPA was dysfunctional and the best option was to convert to an investor-owned utility. In other words, he wanted it structured like the old Long Island Lighting Company that gave us the disastrous Shoreham nuclear plant.

This proposal may have been the governor’s way of tossing the “hot potato” to a third party, but financially it made no sense. A private entity would have to issue taxable debt which would cost ratepayers more in interest payments and it would not be eligible for FEMA reimbursements enjoyed by the state agency.

Discarding the privatization plan Cuomo signed into law LIPA legislation in June 2013 that he insisted would dramatically revamped the electric utility. The new entity would “focus on improving customer service including stabilizing rates and enhancing emerging response and preparation, reduce the cost of LIPA debt, and implement tough state oversight for the new utility company.” The governor also boasted that his reform would “achieve savings to allow the new utility to seek a rate freeze for 2013, 2014 and 2015.”

However, a report issued in July by State Comptroller Tom DiNapoli, Long Island Power Authority by the Numbers,” disputes Cuomo’s 2013 claims.

The DiNapoli study concluded that, “so far the long-overdue improvements promised to LIPA ratepayers have yet to be achieved…. Ratepayers are not benefitting from regulatory oversight, access to information and control mechanisms [and] LIPA ratepayers face higher bills, bear a debt burden that is projected to increase, and, in some ways, have less transparency and accountability regarding their electric service provider than before.”

The governor’s pledge to freeze rates for three years was a rouse to get through the 2014 election cycle. Days after he signed the LIPA legislation the agency announced a 4 percent hike in monthly customer bills. When asked about it, a Cuomo spokesman gave an Orwellian newspeak answer.

The promised freeze was redefined as a goal and “LIPA rates constitute the electricity delivery charge only, and do not include the power supply charge.”

That distinction was not made at the bill signing party. And readers should know that there were up to that time only two “rate” increases since LIPA took over in 1997. The countless other increases were all fuel related.

As for LIPA’s bonded debt: the 2013 legislation authorizing the one-time restructuring of $2 billion of LIPA’s $7.5 billion of debt via the newly created Utility Debt Securitization Authority was expanded this year to grow to $4.5 billion. And this new debt is to be paid off by the monthly service charge on residential ratepayers’ bills that was originally fixed at $10 and is now to be increased to $20.

The governor’s pronouncement that the 2013 legislation that authorized “LIPA to refinance a significant portion of its debt in a manner that would provide much needed relief to taxpayers in the service area” was delusional. The proof: PSEG and LIPA have proposed annual rate increases—not fuel-related increases—between 3-3.4 percent over the next three years.