And there is no one willing to wield the knife-if you exclude the butter knife Governor Paterson's bringing to the current legislative gunfight over the budget. But Goodwin sees tax hikes as inevitable: "Mark this prediction: Tax hikes will be the outcome this time, too, even though Gov. Paterson and Mayor Bloomberg swear they won't do it again.New York City and state have a combined deficit of $9 billion and counting. Vows to trim spending and ban tax hikes are impossible to believe because the pols say they will eliminate billions without a single reduction or concession from the workforce. It's not possible."
So some one's going to have to take on the workforce. Paterson may be inclined, but without the clout force these cuts through a recalcitrant legislature, all of his proposals amount to little more than huffing and puffing. And we remember what happened during the last budget imbroglio. The governor talked tough-and even with the one time stimulus to boost his revenue-but ended up raising taxes: "That was the "solution" last spring, when the city and state hiked taxes by $13 billion, despite getting a federal stimulus bailout."
As for Bloomberg, we've already offered our predictions about Tax Hike Mike-with the upcoming teacher's contract a bellweather for all of the upcoming contract negotiations. As the NY Daily News reports: "What will a Bloomberg third term look like for the city's workforce? City labor leaders are about to find out as they get ready for the next round of contract negotiations...The United Federation of Teachers is in the middle of some tortured contract negotiations with the Bloomberg administration. If they get 4%, will it be based on the last round of negotiations? Or will that in itself be the pattern going forward?"
The problem for the city is that the mayor has never exhibited the kind of tough outlook needed to tackle the size and scope of government-and that was in good times when revenue was coming in at a nice clip. Now, with deficits expected to exceed $5 billion, Bloomberg is floundering around-having squandered the opportunity to use the just finished election campaign to warn and prepare New Yorkers for tough times. He is also bereft of any philosophical rationale that would give him the ability to sell a smaller government-and all the initial pain that it will likely cause.
But make no mistake about it-we are about to sink under our own government weight. Goodwin underscores this: "The city and state employ nearly 600,000 people, an army of bureaucrats larger than the United States Army. And perhaps as powerful, for these workers and their unions are close to sinking Gotham and the Empire State. Their weapons are blunt: votes and cash for your election, or votes and cash for your opponent. Guess which option every pol chooses every time."
Which is why we believe that a tax revolt may be on the horizon-even in as liberal a state as New York. Our advice is: Watch California-a state where the government is so broke that it just enacted a 10%! surcharge on all tax payers; on top of its already high rates. Californians will soon be joining the revolt that was started by the Tea Party response to government run health care. And NY will, in our view, be right behind.
That is, unless we get a new sheriff who can use the current crisis to implement a new governing paradigm. And the talk we heard from Andrew Cuomo the other day surely looks like the kind of approach we're talking about. As Liz pointed out last week: "AG Andrew Cuomo sounded a distinctly pro-business and centrist note at a Tuesday night fundraiser organized for him by Republican supermarket mogul John Catsimatidis, according to an attendee at the event..."It was almost as if he was reading the tea leaves of some of the results in Nassau and Westchester counties," said my source. "He talked about lowering the cost of government and business, how we can't be taxing people in the middle of a recession. It was the right tone for the time, and the right tone for a business audience."
So, as we ride into the fiscal abyss, will we get the strong dose of realism from a Governor Cuomo to allow us to avoid disaster? Or we we be left with the old tired tax raising approaches that the Bloomberg conventional wisdom always ends up doing. If we do, the tax revolt is right around the corner-and for NY, it might just take the form of an even more copious mass exodus from an over taxed state.
