Bagging the Rebate Revocation: Send in the Clowns

Well it looks as if New Yorker City homeowners will be getting their $400 rebates after all. Just weeks after we were told that Mayor Mike Bloomberg's fiscal expertise was needed to save our city from ruination, a funny thing happened on the way to a city hall hearing-the mayor and his crack finance experts were exposed for their failure to simply understand the basics of New York State tax law.

As the NY Times reports: "Remember two weeks ago when Mayor Michael R. Bloomberg announced he was shelving the $400 homeowners’ rebate checks because the city could not afford them? Look for yours in the mail. It turns out the mayor does not have the power to halt the rebates, the city’s top budget official grudgingly admitted on Monday, under questioning from the City Council. Any elimination of the popular rebates requires City Council approval, budget director Mark Page acknowledged. And council members, who have been flooded with calls from angry residents looking for their checks, declared the mayor’s idea to cut them “dead on arrival.”

Perhaps the Bloombergistas should exchange their bond terminals for clown make up. As Clyde Haberman points out this morning, the city council has a degree of buyer's remorse when it comes to a mayoral third term:

"They were particularly angry at the mayor’s plan to save the municipal treasury $256 million by canceling $400 tax rebate checks that were supposed to have been mailed to homeowners weeks ago. It turns out that the cancellation needs the Council’s consent; that approval is as likely as your winning the Mega Millions lottery. Mr. Bloomberg and Mr. Page will have to figure out another way to scrape together the money. “This is just one of those ‘out of touch with reality’ moments that you guys have from time to time,” Councilman Lewis A. Fidler of Brooklyn said to the budget director, his voice laced with scorn."

As a result, Haberman simply can't resist the following observation:

"Just think: Only days ago, Council members were offering Mr. Bloomberg (and themselves) as New York’s salvation from fiscal doom. Ms. Quinn and Mr. Fidler were among the 29 council members who voted to amend the term limits law and thereby allow Mr. Bloomberg (and themselves) to run for an extra four years in office. Everyone knows that the only way they could pull off this self-serving rules change in midgame was to argue that the billionaire Mr. Bloomberg was uniquely positioned to lead the city, Moses-like, out of the fiscal wilderness. Now, on key matters of finance, they say the mayor doesn’t know what he’s talking about. There is a serious disconnect."

And on top of this demonstration of fiscal acumen comes this epiphany on plastic bag taxes-mayor no can do because, just like any other tax, this one needs both city council and state legislative approval (the trick of calling it a "fee" fooled no one). As the Times tells us, having to do its own quick rewrite of its story to reflect legal realities: "City officials are still fine-tuning the details of the surcharge: Which kinds of plastic bags would require one? Is 6 cents — 5 for the city and one for the merchant — enough? While Mayor Bloomberg has called the charge a fee that could be approved by the City Council, the city’s top budget official said on Monday that it was a tax and would require approval from the State Legislature."

All of which has Haberman slapping his knees in his appreciation of another demonstration of Bloomberg's indispensability in the economic hard times we face: "It also turns out that the mayor got it wrong in calling for a 6-cent charge on plastic bags in stores. He had called it a fee, which he and the Council could impose on their own. On Monday, Mr. Page acknowledged this amounts to a tax, requiring Albany’s approval."

Ah, deconstruction of a fable is sometimes so cruel; in this case the Myth of Mike as financial savior of NYC comes crumbling down, much like the falling statue of Saddam Hussein in Baghdad. As the Times reports:

"The revelation represented an unusual embarrassment for an administration that prides itself on precision and efficiency, especially coming weeks after Mr. Bloomberg based his successful campaign for an extension of term limits on his fiscal résumé. On Nov. 5, when he announced he was shelving the rebates, the mayor said that the move would save the city $256 million as it grapples with an economic downturn. The news about the rebates was not the only red-faced moment for the administration on Monday. Mr. Page also acknowledged that the mayor could not impose his much-discussed plan to impose a 6-cent charge on plastic bags without the approval of the State Legislature."

Which prompts Haberman to remind us that the down fall of Mayor Abe Beame came after his sloganeering about his own expertise became quite a joke when the last big fiscal crisis hit the city: "For his part, Mr. Bloomberg may not want to trumpet how well he knows the buck. That’s what Abraham D. Beame, then the city comptroller, did to win the mayoralty in 1973. “He knows the buck” was his campaign slogan. In no time, New York teetered toward bankruptcy, and “he knows the buck” became a punch line."

In reality, the mayor's ignorance on these two issues probably helped to save him-albeit temporarily, perhaps-from himself. Both the rebate refusal and the plastic bag tax are wildly unpopular with New Yorkers. That being said, he'll have to come up with additional tax proposals that will also probably strike the city's citizens in a similar manner. The result? A mayor, who prided himself as a non partisan expert, being exposed as an out of touch wizard hiding behind a curtain of hubris.