New York City faces huge budget shortfalls – a billion dollars this year and up to six billion dollars next. The prolonged Bear Market, which will be three years old this spring, was only exacerbated by 9-11 and its aftermath. For the first time in over a quarter century New York is facing layoffs and flirting with fiscal insolvency.
Last Fall New Yorkers voted a political neophyte, billionaire Mike Bloomberg, into the Mayor’s office and his administration thus far has been a very mixed bag.
From the start he’s been diligently fiscally responsible, but his obsession with stamping out tobacco has resulted in the highest local cigarette tax ($5 per pack) in the nation and a proposal for a draconian smoking ban even that would virtually forbid all indoor smoking, even in “Cigar Bars.” Worse yet, his cavalier attitude about the demise of local groceries and taverns as “minor economic concerns,” and his penchant for raising every imaginable tax – a proposed 25% real estate tax, tolls along the congested East River crossing and the raising of every fee and summons fare in the City have irked a lot of residents.
Now, on Wednesday, November 13th, Michael Bloomberg has boldly crossed into the realm of local despot by floating an experiment in taxation without representation.
For decades New York City had a “Commuter Tax” that it applied to all non-resident workers. If you lived in New Jersey or Connecticut or upstate New York and worked in the City, you were charged a surtax for doing so. That was repealed in 2000, but now Mayor Bloomberg wants all non-resident workers to pay the full New York City income tax. At this point none of those people get to vote in New York City’s elections even though their labors vitalize this city, their payment of pay local sales taxes and fines help support this city and their daily purchases bolster thousands of local businesses.
The argument has always been, “These people don’t live here. They don’t pay property taxes or income taxes in the city.” Well, now that argument can’t be applied – their employers pay local property taxes and they’d pay local income taxes as well as sales taxes just like every resident of this city does and thus they have a right to be represented just as every resident does. In short, if these non-residents are to be required to support this city, they deserve a voice in how this city is run and that requires a vote in ALL local elections.
There is no real logistical problem with this, as every worker would merely be registered to vote locally in the Election District of their workplace and no legal barrier to it either. Taxes are the price one pays for representation and a say in how things are done. That’s why, as the plan stands, it is not only unworkable but unconstitutional as well. This nation was founded on the very principle that this initial plan violates.
Giving these new taxpayers a local voice and a local vote might not stop the commercial bleeding, many businesses may still relocate to points south and west, but it’s right and just and it might, in fact, be the best thing to happen to New York City in a very long time. It certainly could be a boon to the Republican Party – legions of predominantly conservative suburban voters taking part in New York City’s local elections; what a breath of fresh air!
That is probably not Bloomberg’s goal, he was a registered Democrat and an ardent Hillary Clinton supporter through 2000, but his Bloomberg Radio is headquartered out in northwest New Jersey, so it’s doubtful he’s all that opposed to the “New Jerseying of New York.” Early in his administration he expressed a candid dismay that New York City had a residency requirement for its uniformed workers (cops & firemen).
New York’s problems is not its tax revenues, which according to Steven Malanga of the Manhattan Institute grew by 4.7% this year, but its out-of-control spending.
Right now, New York faces two problems – a budget shortfall and a rising tide of businesses abandoning the City for other environs. In the old style manufacturing based economy, where businesses needed New York’s ports, they were a captive audience, forced to endure whatever tax rates the local government felt it needed to run its massive infrastructure. Today that dynamic has changed and businesses can virtually compete (pun intended) from anywhere.
New York is going to be faced with having to reduce its taxes to lure businesses and cut its social expenditures to make its budget more reasonable.
Property taxes have always been lower in New York City than elsewhere because of the large amount of commercial property taxes paid, but this across the board property tax increase would certainly result in much higher rents – the rent stabilization boards would have to let the landlords pass this on to their renters and worse still, commercial rents and the concomitant prices of goods and services in the City would skyrocket.
Right now New York City and New York state are wrangling over the twenty-plus billion dollars in aide the feds promised, so some see Bloomberg’s 25% increase in property taxes and saddling commuters with NYC’s income tax as “posturing” for more funds for the City. Still, these plans should’ve been better thought out. As it stands the City Council has announced that it will not consider a property tax hike of more than 10% and the State Legislature and the Governor’s office have said they’ll oppose any kind of reinstatement of “the commuter tax, while Mayor Bloomberg insists that he won’t layoff City workers.” As they say in the gaming industry, something’s got to give.
lgl