Archive for the ‘NY State Finances-SCC’ category

Tax reform’s your big chance, Suozzi

April 15, 2008

This article I wrote appears in Newsday today, April 15, 2008.

Spitzer in Wonderland, Part II – By George J. Marlin

January 27, 2008

Let’s review America’s financial and economic mayhem:

  1. Financial institutions have written off $150 billion in losses and some analysts claim there could be up to $350 billion more.
  2. Year-to-Date market returns have been dismal.  The Dow is down 7.79 percent, S&P -9.38 percent, Nasdaq -14.19 percent.
  3. The Index of Leading Economic Indicators which was -0.2% in December and has declined in 4 of the last 6 readings indicates the U.S. is in a recession.
  4. The Empire State Manufacturing Index fell to 9.03 in January, from 9.80 in December. New orders tumbled 13 points to 0.04, after a 10 point decline in December. Business expectations measured by the future conditions index, were very negative, falling 15 points to 19.44.
  5. The CEO Business Confidence Survey fell to 39%, its lowest point since 2000.
  6. The Unemployment Rate has risen to 5%.
  7. Unadjusted Initial Jobless Claims increased to 547,637, the highest since 2002.
  8. The Consumer Price Index (CPI) showed consumer prices rose at an annual rate of 4.1% in December.
  9. The Producer Price Index (PPI) in December showed producer prices were 6.3% higher than the previous year.
  10. December Retail Sales (ex autos) fell 0.4%.
  11. Real Disposable Personal Income decreased in November and December -0.3% and -0.2% respectively.
  12. The S&P/Case-Shiller Home Price Index posted its 10th consecutive month of negative returns. The leading measure of home prices indicates the worst broad-based declines in home values since 1991.
  13. The National Association of Realtors reported 2007 home sales declined by 13%, and a 10-month supply of homes are currently on the market.
  14. Foreclosure rates (1.69% of mortgages) are at record levels according to the Mortgage Bankers Association. 5.6% of borrowers are 20 days past due, 1.26% are 90 days past due and 1.3% of Prime borrowers are past due.

In the wake of all this economic doom and gloom, what does Governor Spitzer do? He calls for a 5.1 percent spending increase (double the inflation index), $1.7 billion in new fees and taxes, risky one-shot revenues, record spending on education, covering 400 thousand additional children with health insurance, increasing the state work force and giving salary raises to state legislatures.

Spitzer truly lives in his own wonderland. After his presentation he even denied his budget calls for tax increases. He is a spoiled rich kid who believes he can will things.

If Governor Spitzer does not wake up to the fiscal realities and cut spending and taxes, he will be responsible for a severely damaged, if not crippled, state economy. Remember, in the recession of 1990-1991 over 20 percent of the jobs lost nationally were lost in New York. And if history repeats itself, expect people to vote with feet and scores of New York towns, villages and hamlets to turn into municipal deserts.

Spitzer in Wonderland: The 2008 State of the State Address – By George J. Marlin

January 13, 2008

New York State is on the edge of an economic abyss.  Citibank, which will write-off about $18 billion, has announced it will lay off over 30,000 employees – most of whom work in New York.  Merrill Lynch, anticipating losses to top $15 billion, is turning to China and the Middle East to raise the capital needed to survive.  In 2007, over 40,000 people in the securities industry were fired, bonus payouts were significantly reduced and more of the same is expected in 2008.

With twenty percent of the state’s tax revenues coming from Wall Street-related enterprises one would think this spells big trouble for New York.  But these economic woes did not appear to faze Governor Spitzer when he delivered his State of the State Address last week.

Instead of announcing “the days of wine and roses” are over; instead of declaring a fiscal state of emergency; instead of calling for across the board spending cuts and a hiring freeze; Spitzer proposed increases in state spending. (more…)

Spitzer’s Upstate Follies, Part II – By George J. Marlin

October 28, 2007

Governor Spitzer continues his upstate public relations campaign, “Operation Strategic Investment.”

Frankly, Spitzer’s plans are not very strategic nor much of an investment. Over ninety percent of the $850 million in disbursements are redecorated bribes allocated during Pataki’s last term of office.

Payoffs to existing employers and contractors, in the form of state grants, will not revitalize upstate New York’s ailing economy. People have been fleeing the area because they can’t afford the annual property tax bill – 80% of which is dedicated to financing unfunded state mandates. Before entrepreneurs relocate to the area and invest capital, the local tax systems must be fixed.

Here’s a breakdown of the tax burden of upstate townships and cities versus New York’s most affluent and populated municipal sub-division, the town of North Hempstead. (more…)

Spitzer’s Buffalo Follies – By George J. Marlin

October 24, 2007

To get the media’s focus off the scandals plaguing his administration, Governor Spitzer unveiled an $850 million economic development plan he claims will revitalize Western New York’s largest ailing cities, Buffalo and Niagara Falls.

Spitzer’s “strategic investment” scheme, which includes the construction of housing, malls and a 200 thousand square-foot sporting goods store, is not going to turn around Western New York’s economy or stop the population decline.

Over 1 million people have fled upstate New York in this century because runaway taxes have wrecked their local economies, not because they lacked housing or shopping centers. (more…)