The Taxman Cometh

As the NY Times is reporting, Mike Bloomberg's budget message today will reveal what is quintessential about his political essence: a tax increase is on the way because the mayor has no other creative way to deal with the city's fiscal meltdown. As the Times tells us: "A month after imposing a property tax increase, Mayor Michael R. Bloomberg is expected to call for a $900 million increase in the city’s sales tax on Friday, as the city confronts a loss of revenue due to the economic downturn. New York City already has one of the highest sales taxes in the nation, at 8.375 percent, and retailers are likely to fight the increase."

So there you have it-once again; our Michael one-note doing what he does best: "City officials declined to offer specifics. But according to a budget plan discussed late last year by administration officials, the city could generate almost $900 million by increasing the sales tax to 8.75 percent. Under that plan, the city would also do away with the current exemption on some clothing purchases."

Of course, Bloomberg's hand into our pockets approach won't stop there: "In addition to the sales tax increase, Mr. Bloomberg would eliminate the $400 property tax rebate, for an approximate savings of $250 million. He also planned to renew his call for Albany to approve legislation that would charge customers a nickel for each new plastic bag they use at most stores. So far that measure has not gained great traction with the public, despite supporters’ claims that it is both environmentally friendly and good for the city’s bottom line. There may be other taxes or fees as well."

We have already shown how the Bloomberg approach has helped lead to the loss of stores in the neighborhood; and this continued tax and spend strategy will be a further nail-in-the coffin for the city's local economy. Adam Brodsky captures this in the NY Post this morning: "State and local levies here already top the nation. If taxes spike further, many firms that are just squeezing by won't be able to afford to do business here. That's not good news for a city battling a recession."

But what about downsizing government? Bloomberg gags on this approach-issuing Jeremiads about the return of the 1970s: "His third option, trimming costs, is a step in the right direction - but no game-changer. That's because Bloomberg is philosophically opposed to any serious downsizing of government."

Brodsky's remedy is unconventional for New York City; but, if done in the right way, could be the elixir local businesses need to survive and grow: "Bloomberg also vows - in full-throated demagogic tones - never to repeat the mistakes of the '70s, when the city rolled back services in response to the fiscal crisis. Yet only a wholesale budget-wide restructuring can pave the way for the shrewdest move, the one never mentioned: big-time, across-the-board tax cuts. The huge pluses of such a step are obvious: Deep cuts lure businesses by signaling that the city no longer views them and their workers as cash cows. And the extra money New Yorkers keep could help them weather the economic storm."

Just think what a rollback of the commercial real estate tax would be for retailers-stopping bankruptcies and the job losses that they entail. But did we ever hear Mike Bloomberg call for some of the federal stimulus money to go towards helping struggling local businesses? No, all of the cash is reserved for plugging holes in the never ending spiraling of government spending-an arena where all services are vital: "Nor would we need to hit "vital" services - like policing, fire-fighting and garbage collection, which make up government's core mission. Cuts in those areas would indeed degrade quality of life and hurt the city as much as tax hikes. But there's plenty else to chop: lavish health-care subsidies and other entitlements, runaway school funding - and, of course, compensation packages for municipal employees, including fringe benefits and base salaries."

For Brodsky, this is all about the Bloomberg legacy; but that is something that is already sealed for us. As far as government is concerned, Mike Bloomberg remains a farcical successor to the late John Lindsay-just with more money to buy silence and complicity. Unfortunately, we know the answer to Brodsky's almost rhetorical question: "Does Bloomberg want to be remembered as the mayor who wrecked New York's commercial supremacy by making heaviest-in-the-nation tax burdens heavier? Or would the man touted for his financial acumen rather be known for, once and for all, reining in Gotham's monstrous outlays, lowering taxes, bringing back business - and securing the city's future? In the short term, all that may be at stake is his re-election; in the long term, it's his legacy."

And, as the NY Daily News underscores with a quote from our tall friend Ed Skylar, the mayor remains a creature of his fossilized public philosophy: "In order to close this deficit without destroying the core services New Yorkers rely on, the mayor will need help from all of our partners, from the municipal unions to the leadership in both the state and nation's capitol," said Deputy Mayor Ed Skyler. "We all will have to do our part to get through these tough times," he said."

Mike Bloomberg will never transcend the prison of his limited worldview. It is up to the voters now to see through the smoke and mirrors of the Myth of Mike-finally awakening to the fact that he is no fiscal wizard, but simply the little man behind the curtain.

Out of Control

The debate over continued mayoral control of the schools has begun-with hearings starting in Queens yesterday. And from the looks of things, changes in the governance system may be in the works. As City Room reports: "If anyone thinks the debate on the mayor’s control of the schools is a staid affair, witness the crowd at the State Assembly’s first public hearing on the law, which comes up for renewal in Albany at the end of June."

And the Public Advocate is right in the middle of the debate: "Betsy Gotbaum, the city’s public advocate, was the first to testify, echoing many of the points made in a report her office released in September that endorsed mayoral control but called for more checks and balances, particularly from parent groups. Ms. Gotbaum said she was particularly concerned that the 32 school districts have, for all intents and purposes, been eliminated. She said it was hard for parents to get answers from central offices and often relied instead on her office or those of community elected officials."

The mayor's supporters would like everyone to see the debate as an all or nothing one between those who want the accountability of the mayor's rule versus those who want to revert back to the bad old days: "Deputy Mayor Dennis M. Walcott, who oversees the Education Department, testified on behalf of City Hall, continuing to push the message that things have never been better in the city schools. Much of his opening remarks recounted what life was like when the independent Board of Education was still in charge. “I remember the inequities inherent in 32 mini-school systems — some run capably, some corruptly,” Mr. Walcott said. “No systemwide curriculum, even in math or reading. A system where school funding was opaque and based more on politics than on needs. I remember a 27 percent lag behind the state in math and a 23 percent lag in English. Too many students who could not read promoted from grade to grade, with graduation rates below 50 percent and much lower for students of color.”

What's instructive here in Walcott's, "who are gonna believe, me or your own lying eyes" world, is how the idyllic picture he paints is unrecognizable to those closest to the system: teachers, parents and administrators: "Mr. Walcott’s testimony was occasionally punctuated by boos from parents in the back of the room who had come to the meeting with a group called “Campaign for Better Schools,” which is advocating changes in the way mayoral control is set up, including more checks and balances and public participation."

And as one City Room commenter says: "Ask the people working in the schools what they think…this myth of improvement is just that, a myth. The exams have been dumbed down so that people such as Klein and Bloomberg can brag about “improvements.” The morale of the professional staff has never been so low. Everybody who can gets out as soon as they’re eligible to retire. Everything is the fault of the staff. Even the idiotic topic they decided up for their strategy, Children First, shows how conceited they are."

Also of interest is how the mayor's vaunted lobbying effort is floundering: "When close allies of Mayor Michael R. Bloomberg banded together last summer to create a political organization to push for the renewal of a 2002 state law that gave New York City’s mayor control over its public schools, the initial buzz was that it would become a powerhouse lobbying group, raising as much as $20 million and helping shape the debate over the year. Instead the group, called Learn NY, has raised less than $3 million from several foundations. Rather than producing flashy television spots, it has placed simple ads on Web sites of news organizations and urbanbaby.com, and tried to spread its positions by posting on education and community listservs and blogs."

Not to get too excited, however. As soon as this gets the mayor's real attention-or that of Wolfson and Sheinkoff-watch how the money begins to flow in; flabbergasting as it might be to all of the floundering not-for-profits in the city. But watch out for the parent push back: "But in its early, largely low-key campaign, the leaders of Learn NY have drawn the ire of some of the most active and vocal parent-advocates in the city. When David M. Quintana, a Queens father whose blog features a clock counting down to the end of the mayor’s term, received an e-mail message this week asking him to post a letter introducing Learn NY to his readers, he instead sent it to a listserv that is often critical of Schools Chancellor Joel I. Klein. “I just suspected that they were sort of a Gal Friday for the mayor,” Mr. Quintana said in an interview. “They tried to recruit parents and they just picked the wrong parents to recruit.”

What the mayor and his minions resist in all of this back and forth, is any real oversight role for parents-or anyone not appointed by Mike Bloomberg: "Dennis M. Walcott, the deputy mayor who oversees education, said the administration opposed any change in the Panel for Education Policy, which is appointed by the mayor and largely serves as a rubber stamp, in part because it believes most of the mayor’s controversial initiatives would never have passed had he not had full control over the schools."

At the end of the day here, we hope that the legislature closely examines the reality vs. the spin in this debate over governance. As one Queens lawmaker points out: “No one wants to go back to the old system of finger pointing and no one being in charge and there’s an appreciation of the line of authority,” said Michael N. Gianaris, a Queens assemblyman. “That being said, there’s a wide belief that parents are real stakeholders, and that has not been appreciated as much as it should be, and too often parents are shut out of the process.”

Ultimately, however, the issue will be all about Mike Bloomberg-and the ire of so many folks is directed at his overturning of term limits; along with an animosity to the chancellor that grows stronger every year:

"Learn NY organizers said they hope lawmakers and the public could separate their views on Chancellor Klein from the concept of mayoral control, but such a distinction can be difficult to make in the political world. “If the mayor was not running for re-election, one could be more objective about it, but I think people see that the chancellor hasn’t made a lot of friends in the last several years and that’s part of what happens when you have one person having this level of authority,” said Randi Weingarten, the president of the teachers’ union, who has sparred with Mr. Klein repeatedly in recent years and is influential in Albany."

This fight is just getting started; and we can't wait to see the deconstruction of the Myth of Michael in the process. The more folks know, the less they appreciate Bloomberg's grandeur.

The Real Main Street Crisis

As we have pointed out, the effort by the state's liquor stores to preserve their monopoly over wine sales employs the imagery of shops closing on "main street;" going so far as to call their coalition-"Last Store on Main Street." Well, setting aside self serving hyperbole, there is a real crisis on the city's commercial strips. and this whine is for real.

As Albor Ruiz underscores this morning: "Small, friendly and convenient, bodegas are more than businesses - they are veritable neighborhood institutions. Yet they are disappearing faster than you can say "stimulus package." Ramón Murphy, president of the Bodega Association of the United States, and a bodega owner, is sounding the alarm about the state of the business to which he has dedicated 24 years of his life - and that has allowed him to raise four children."Bodegas are family businesses, and every time one closes, two or three families suffer," he said at his Red Apple Grocery, at 134 Hamilton Place in Manhattan. "Last year, 137 of them went down only along Broadway from 230th St. to 197th St.," Murphy added. "Hundreds of bodegueros [bodega owners] are throwing in the towel. Every day, two or three bodegas close in New York."

The closing of bodegas-and green grocers fall into this category as well-is a calamity for New York; and is as severe a situation as the closing of the big banks and brokerages: "Lost in the din about hundreds of billions to bail out banks, the auto industry and financial institutions is the fact that the 9,000 New York bodegas are becoming a dying breed. If something is not done, it won't be long before they become extinct, leaving thousands without a means of support. The disappearance of bodegas is the economic crisis hitting at the most basic level, and its impact in human terms is very real. After all, since the mid-1980s, small businesses have been the creators of the majority of new jobs in the city."

What lies behind the threat? The recession is, of course, a major culprit; but there are other factors as well: "The recession has meant fewer customers spending less. For bodega owners dealing with skyrocketing rents, high taxes and often excessive regulations - typical of New York City - life has become harder."

This bodega crisis actually started when Mayor Bloomberg diverted half of their cigarette sales to the black market with his confiscatory tax increase of 2002. After that, over $250 million a year was lost to the stores, as illegal street sales flourished. As we told the NY Times then: "Richard Lipsky, a lobbyist for the owners of small delis, bodega owners and convenience stores, predicted in an interview that many neighborhood stores would not survive the higher tax as many smokers would buy their cigarettes over the Internet, from Indian reservations, from adjoining states or from smugglers."

Mike Bloomberg's response at the time was to call the situation a, "minor economic issue." But when seen in the context of the mayor's 20% commercial real estate increase-passed through to the stores as a rent hike-and the city's regulatory Jihad of fines and violations, we now face a crisis of the highest magnitude. In a recent survey, store owners cited, "operating costs," as the main reason their stores were at risk of closing.

In response, stores are asking for the passage of a rent protection bill: "Yet Murphy says the main reason bodegas keep crashing like rows of dominoes is the one-sided process of lease renewal ."Leases are the No. 1 problem," he said. "Landlords either do not renew them or want to raise the rent four or five times. Often, you have to give money under the table for the lease to be extended." That's why the Small Business Preservation Act, sponsored by City Councilman Robert Jackson (D-Washington Heights), is so vital, Murphy said. The bill, introduced last June, would provide relief from unfair evictions."

In the midst of all this economic hardship-and don't forget that the supermarkets in the city are a dying breed as well-comes the effort of some environmentalists to expand the responsibilities of local stores for bottle collection; adding water and juices to the deposit stream (a close to 50% increase in the amount of containers mandated to collect). With so many stores closing, this isn't the time to increase the regulatory costs of doing business in New York.

So let's drop the bottle bill expansion; and while we're at it, how about using some of the stimulus money to lower the cost of doing business in the neighborhoods-in the form of tax relief for local small businesses. We might even find a way to allow the bodegas to sell wine by lowering the licensing fees for small stores. Lowering costs and increasing business opportunities is the policy direction we should be taking at all levels of government in order to relieve the real crisis on main street.

Wining on Main Street

Crain's is reporting that the state's package stores have launched a grass roots PR effort to keep wine as their exclusive product: "Some 2,700 liquor store owners on Wednesday formed a coalition called The Last Store on Main Street to lobby state legislators. The group claims that 1,000 small businesses, representing 4,000 jobs, would fail if food stores are allowed to sell wine. The organization is also making the case to associations such as Mothers Against Drunk Driving that teenagers would have greater access to alcohol if wine were sold in supermarkets."

Well, what's wrong with a little competition? And, as far as the last store standing rhetoric is concerned, this sounds a bit overheated to us. Certainly, box stores selling wine in NYC won't kill the main street liquor stores-because we won't let that many of them in; and if the local C-Town or Key Food can sell wine, then those are Main Street Stores just like any local liquor store is. As we told Crain's: "The grocery industry maintains that liquor stores’ position is protectionism at its worst. “Why should anyone have a monopoly on the product?” said Richard Lipsky, a spokesman for small supermarkets in the city."

A position that was underscored by the National Supermarket Association, the group that represents Hispanic-owned independents: "According to the National Supermarket Association, fewer than 10 states forbid allow wine sales in grocery stores—a proposal to reverse that in Massachusetts failed to pass last year. Neighboring New Jersey allows wine sales in food stores, and there is no dearth of liquor shops in that state, said Nelson Eusebio, executive director of the National Supermarket Association, located in Queens. “The person who leaves his home to buy a bottle of wine is going to a liquor store,” said Mr. Eusebio. “We don’t feel that grocery stores will interfere with that [decision].”

The real issue here is the cost of the license; and to counteract the "Coalition" argument, there is a need to insure that the bill is cost effective for smaller stores-and let's not forget the 400 beverage centers that service so many neighborhoods and towns. It appears to us, that this is one monopoly that has lasted for way too long.

Take the Money and Run

Who would have ever thought that our old friend Hank Sheinkoff would be staring in a re-make of the old Woody Allen movie, "Take the Money and Run." Well, what else to make, then, of the following from today's NY Daily News: "Mayor Bloomberg snatched another high-profile political consultant from his rivals Tuesday, hiring veteran Democratic operative Hank Sheinkopf. "No one knows more about New York City politics and campaigns than Hank," said Howard Wolfson, Bloomberg's campaign communications director."

Quite a turn of events-but if any one can make a silk's purse of the mayoral sow's ear. it's Hammerin' Hank. We do wish him well, and can't wait to see the W-2 on this gig. Salud!

Strong Governor Needed

In today's NY Daily News, Michael Goodwin decides that, for all his recent foibles, we really need Governor Paterson to step up his game and resolve the current budget mess without too much whacking of the state's tax payers: "He's erratic and is getting a reputation for being loose with the truth. But here's the really bad news: Gov. Paterson remains our best hope for reform in Albany. Paterson's rocky performance, especially in the botched contest to replace Hillary Clinton, is fueling talk that he's toast. Things are so bad that a reporter's question yesterday about whether he intends to run in 2010 was fair game. Paterson's response was quick - he absolutely intends to run - but his slumping body language and somber tone were striking. This is a beaten man, hanging on to the ropes."

Still, the state desperately needs leadership-and the mixed signals from the governor need to be clarified; he has talked a moderate, lower tax game, but his budget certainly doesn't reflect the rhetoric-and the myriad of new fees need to be sent into the waste basket: "Paterson sounded an early warning about what was first called a housing crisis and then a banking crisis. He saw the potential for another Great Depression, a view that is now conventional wisdom. His failure was an inability to force the Legislature to do anything about it. Eschewing the legendary advice from Teddy Roosevelt to "speak softly and carry a big stick," Paterson has spoken loudly but not once shown a stick. It hasn't worked. Indeed, Paterson caved into the tax-and-spenders, proposing to increase or initiate 137 fees and taxes to raise $4 billion."

But Paterson also promised that, if federal bailout money came in, he would reduce and/or eliminate the higher levies: "Yet his good instincts are reflected in a letter he wrote to the Daily News earlier this month. After I warned about the incoherence of the federal government cutting taxes as part of a stimulus package while the city and state were planning to hike taxes, Paterson hailed my "very good point" and added: "I want to assure the readers of the Daily News - and all New Yorkers - that we hope to eliminate many of the tax and fee proposals put forth in my budget if we can secure a significant amount of federal aid to help close our deficit."

Well that money is on the way, and all the while the governor is still looking to tax obesity and not really cut the fat in state spending: "That's the right answer, and his putting it on the record matters now that the state is slated to get over $10 billion from Washington. Paterson can strike a blow for fairness as well as economic growth by letting New York families keep more of what they earn instead of having the state gobble up a bigger slice of the pie."

And then Goodwin goes further; proposing that federal aid to cities and state's have restrictions-just as the big companies are held in check by requirements that the public's money be spent in profitable ways: "Mayor Bloomberg ought to also promise no tax hikes, and the feds should make a moratorium on local taxes a condition for any bailout, just as financial firms face restrictions in exchange for help."

That's a great idea. The stimulus windfall should be directed towards helping beleaguered "working families," who have seen their incomes shrink as their tax bills have either stayed the same or even gone up-per the city's property tax hike. And, while President Obama has promised to eliminate programs that don't work, Mike Bloomberg can't seem to find any local program that needs to have an axe taken to it. Change in NYC is as vital as any change in the composition of the national government.

So we'll be watching the governor's actions over the next few weeks. Will his actions reflect his sober fiscal analysis? Walking the walk is the watchword for the duration of this session.

Long Knives Come Out

David Paterson has had better weeks, we're sure. Yesterday, the press really took off the gloves and hammered him; with Fred Dicker calling him an outright liar: "Gov. Paterson yesterday insisted he had no idea who did the slime job on Caroline Kennedy - although the source of the information is about as close to him during the day as his wife is at night. He's a liar."

And the NY Daily News' Bill Hammond wasn't much kinder: "Gov. Paterson doesn't set out to mislead and confuse.It's just that he has a bad habit of saying whatever he thinks the person in front of him wants to hear at that moment - even if that means completely contradicting what he said two minutes before. Before long, he has said so many things to so many people that he loses track of what the real truth is. It's a personality flaw that finally caught up with him in the Caroline Kennedy fiasco."

But at least he cancelled his Davos junket; which didn't stop the NY Daily News from editorializing: "Gov. Paterson has thought better than to jaunt off to Davos, Switzerland, to confab with the rich and fabulous while New York and his poll numbers are in the pits. Well, duh.
The governor belongs at his desk with a renewed sense that New Yorkers actually expect him to get things done. For example: to solve the budget crises he has been talking about."

And then the NY Post chimes in as well: "Now, New Yorkers aren't naive. They expect pols to lie. But they also expect pols to lie with some finesse. And they certainly don't expect politicians to take a slam-dunk positive-PR opportunity like the appointment of a United States senator and turn it into a circus sideshow. Now New York looks dumber than Illinois, for Pete's sake.
Is that even possible?"

So where does all this leave Paterson? That all depends, perhaps, on how well he navigates the budget crisis. As Hammond points out: "But his own credibility took the worst hit. At this point, people will understandably question every word that comes out of Paterson's mouth. Which is a scary situation, because New York really does face a massive budget crisis. Trust or no trust, Paterson will have to see us through it."

The problem here, however, is that the governor has left himself no margin for error-all of his goodwill has been eroded, and the folks (not to mention the political sharks) are not going to be suspending their disbelief any time soon. He needs to have a picture perfect landing on this fiscal crisis-muddling through will not be enough.

Looking a Gift Horse in the Mouth

The old saw about not looking a gift horse in the mouth refers, of course to the Trojan Horse; and in analyzing the benefits of the $17 billion stimulus gift from the Feds, the reference is indeed apt. As EJ McMahon tells us: "The House of Representatives this week is expected to pass a federal stimulus package that could pump at least $17 billion of noncapital funding directly into New York's state and local government coffers over the next two years. But what Sen. Charles Schumer is touting as a "shot in the arm" for New York looks more like a sock in the face to the state's taxpayers."

Why's the money bad for us? EJ tells it like it is; pointing out how the largess only enables feckless pols to shuck and duck the hard budget decisions-postponing the inevitable until the situation simply deteriorates further: "The stimulus bills would temporarily offset Gov. Paterson's planned cuts in Albany's projected spending on education and Medicaid - the operative word here being "temporarily," since the extra cash is only for 2009 and 2010. As a result, the federal bailout will do painfully little to forestall the massive tax hikes now being cooked up in Albany and City Hall. Nor will it do much to "stimulate" New York's economy (unless, like Schumer and too many other leading New York politicians, you pretend public-sector unions and Medicaid providers are engines of economic growth)."

The delay of the inevitable, however, will prove deadly for New York's long term stability: "By delaying any serious reform or restructuring of New York's most costly programs, the "stimulus" would actually make the state's long-term financial outlook even worse. If the current versions of the stimulus bills become law, bond-raters might as well downgrade New York's paper right away - because when two years are up, the state budget hole will probably be as big as ever, and the economic outlook may not be much brighter."

And unfortunately, once the package is dissected, all of the federal money will not do much to mitigate any of the governor's proposed tax increases: "When all's said and done, a small amount of the state stimulus, perhaps as much as $1.5 billion over two years, would come without strings tightly attached. That's only enough to undo a small portion of the $8 billion in tax hikes that Paterson has proposed for the same period. The stimulus bills seem likely to breeze through the House, but Senate action will take a little longer. If Paterson really wants to avoid economically damaging tax hikes, he needs to join with other governors in insisting on greater flexibility in how states can use these funds."

Real economic relief for tax unhappy New Yorkers would be for the stimulus money to be used to keep any new taxes down; and, as McMahon points out, this is a good test for our new junior senator: "It's also a test for New York's new junior senator. In the House, Rep. Kirsten Gillibrand lined up with fiscally moderate "Blue Dog" Democrats (although her voting record on a key index of tax-and-spending issues was indistinguishable from ultraliberal Rep. Barney Frank's). This is Sen. Gillibrand's chance to stand up for a more financially responsible package and a better deal for New York taxpayers - even if it pits her against New York's senior senator."

Tax cuts, not hikes, are the key to economic growth-particularly for small businesses that are being beleaguered by taxes, fees and regulations. Yet Washington seems hell bent on subsidizing failing big businesses at the expense of their more entrepreneurial and smaller competitors. As Tristan Yates tells us:

"What should be done to help small business fuel an economic recovery? Clearly, we need Barney Frank to lead a House oversight committee, a $700B rescue program to buy failing small businesses, a progressive Small Business Czar — maybe Naomi Klein or Andrew Sullivan — and, of course, new carbon taxes to ensure that entrepreneurs living in polar regions don’t drown as the arctic ice melts. But if you’re a little skeptical of that approach, may I present another. Stop the planned tax hikes that disproportionately hit small businesses and their owners. Stop turning small businesses into tax collectors and social workers. And stop the bailouts — after all, new businesses can never succeed if their competitors are subsidized indefinitely."

Bottle bill expansion, soda taxes, real estate tax hikes-everything that's bad for economic growth is on the table; and now we have "free money" to spend for all kinds of unstimulating stuff. We're waiting for our elected officials to stand up for small business and economic growth-but we're not holding our breath.

Bloomberg Hearing Footsteps

According to the latest NY1 poll, the upcoming mayoral race may turn out to be a real barn burner: "Nine months before the 2009 NYC Mayoral Election, incumbent Michael Bloomberg leads his two top potential opponents in his quest for a third term, but the Mayor does not top the crucial 50% mark against either. The fact that the Mayor is not at 50% is surprising, given his high approval ratings and his 2005 landslide victory."

Bloomberg holds a slim seven point lead over Anthony Weiner, who himself polls slightly ahead of Comptroller Thompson in the Democratic primary: "In the Democratic Primary contest, the race is far from decided, with a plurality (36%) of Democratic voters unsure about their support. At this point, Anthony Weiner leads at 31% , with Thompson at 22%, and Councilman Tony Avella at only 4%. In addition to the 36% undecided, another 6% of Democrats say they won’t bother to vote in the democratic Primary."

This poll does give many of us some cause for a degree of optimism that Mike Bloomberg, particularly after spitting in the face of the electorate on term limits, may have over stayed his welcome. As the NY Post reports: "Mayor Bloomberg leads his closest Democratic challenger, Rep. Anthony Weiner, by a wobbly 7 points, a new poll shows - an unexpectedly close margin certain to send a jolt through the mayor's third-term re-election campaign."

And term limits just might be a tipping point: "Privately, mayoral aides are concerned that last year's bruising battle over term limits - in which the mayor reversed his own earlier position and convinced the City Council to change the rules through legislation - may carry over to Election Day. "The poll numbers have to make you think term limits is having some effect," said the analyst."

The mayor's slippage, especially when seen in the light of his failure to yet capture any major party ballot line, means that potential donors could be about to open their wallets in anticipation that this mayor-in spite of his great wealth, and willingness to spend it-could be upset in November. What a pleasant thought: arrogance may actually have a price for Mike Bloomberg.

From our vantage, Mike Bloomberg's political passing is long overdue. There has never been a more over hyped mayor in our memory-and never one who was more indifferent, or even hostile, to the neighborhood businesses of this city. Put simply, Mike Bloomberg has been the best friend that the big real estate interests have ever had-simply because his ability to appear not to be beholden to them, has given him the leeway to be their apotheosis.

Mike Bloomberg is now the country's biggest philanthropic giver. He should continue this trend by giving a big gift to the citizens of New York-just walk away from a third term bid and leave the city with a new chief executive. Now that would really demonstrate selflessness.

Antonio Pagan: R.I.P

Antonio Pagan died on Sunday, he was only fifty years old-and even though he hasn't been in office since the late nineties, he will still be sorely missed. Quite simply, Antonio was the fiercest fighter for Hispanic and small business that this city has ever known. As we told City Room: "Richard Lipsky, a lobbyist who worked with Mr. Pagán on issues affecting small businesses, called Mr. Pagán an “incredible force.” “Whether it was fighting for independent supermarket operators in East Harlem against a subsidized Pathmark, or battling the discriminatory pricing policies of Anheuser Busch on behalf of local beer distributors, Pagán was always there to fight on behalf of the little guys,” Mr. Lipsky said."

Pagan took on all of the tough fights-leading the successful effort to derail Giuliani's megastore plan. And, although he was criticized by activists for his controversial views on gay rights (although gay himself) and housing (some Lower East Siders didn't like his support for gentrification efforts), there is no small business leader who would say a single negative thing about Antonio.

Pagan was fiercely passionate about the fights he undertook-circulating petitions and getting in the face of critics; and none more so then Guillermo Linaris, a councilman from Washington Heights during the Pathmark fight. Pagan never trusted Linaris, someone who was Dominican just like the store owners who were threatened by the subsidized supermarket. And when Linaris switched his vote at the last minute( he had been the "leader" of the opposition up until that point), Pagan nearly leaped across the table down at the borough board hearing, calling Linaris a "vendido," or sellout.

There's a line we always use when discussing Linaris-it actually comes from Pagan. Antonio said that he always knew that Guillermo would ultimately stand up for his people; but until that crucial vote, he just didn't know who his people were. Pagan, unlike the traidor Linaris, would never be a vendido; and we sorely miss his brand of uncompromising representation today when over forty percent of the city's small business are Hispanic owned-and are being treated as beneath contempt by Bloomberg's small business commissioner, an oxymoron if there ever was one, Rob Walsh.

So let the psychologically unbalanced and hateful bless Pagan's passing-check out the psychotic ravings of some of the commenters on City Room's blog-but for us, there has never been, and probably never will be again, a fighter for the little guy with the kind of uncompromising zeal that Antonio Pagan brought to any fight. May he rest in peace.

Bodegas Begone

We have written extensively about how supermarkets are disappearing in NYC; and now it appears that the city's bodegas are also closing up shop in record numbers. As the NY Daily News reported yesterday: "Freddy Fernandez's bodega on 138th St. in the South Bronx was in the family for 20 years, and business had never been worse. Food and beer prices rose sharply, Fernandez said, and demand for many products plummeted. After watching several nearby stores close down recently - a bakery, a donut shop and the fish market next door - Fernandez finally had to close his bodega, too.'

Why the trend? Well, just like it is for supermarkets, the rising cost of doing business is making the store owner's life difficult: "Bodega owners like Fernandez are struggling to survive the deepening recession as their costs rise and customers pull back on their spending. To get by, owners are stocking fewer products, changing their hours and letting workers go.
"Electricity, gas, everything - we can't cover," said Fernandez, 42, who locked the doors at his Caribbean Deli-Grocery earlier this month. "We can't pay."

In addition, rising food prices and falling incomes are also taking its toll: "Behind the cash register, a case of Goya extra virgin olive oil had gathered dust for four months. In the past, customers went through two to three cases a month, he said. "We only get the inventory people want," Fernandez said before deciding to close the store. "They want to buy everything cheaper."

And, of course, the hard times effects employment in the neighborhood as well: "Other bodegas are laying off workers. Fernandez cut his staff down from eight to four workers just a few months ago, but it wasn't enough. Revenue has dropped by 25% since last year. "Now is the worst," said Ramon Murphy, a bodega owner for 24 years and president of the Bodega Association of the United States."

In the midst of all of this small business calamity, Mike Bloomberg has raised taxes and added payroll-thus exacerbating the problems at the neighborhood level. As the NY Post opined yesterday, pointing to the public employee issue: "As is, for that matter, Hizzoner's apparent belief that New York can weather the economic downturn without scaling back the public workforce: Insufficient state aid, Mayor Mike said, is a recipe for - sit tight - layoffs. Uh, hello?
The whole world is engaged in layoffs these days."

Of course, Mike has no clue about the correlation between public spending, higher taxes, and burdensome regulations-and the plight of the bodegas has its genesis, at least in part, in the failure of government to rein in its costs. Regulatory burdens function just like unfunded mandates do for local government-making it more difficult for their objects to operate efficiently.

And the recession comes on top of the rising rents that had already forced many stores to the brink of bankruptcy. All of which is why adding regulatory burdens like an expanded bottle bill makes little sense in these dire economic times. More costs equal less profit, equal fewer stores, and a real loss of neighborhood jobs. We should be looking to cut costs for local stores-not add to them through higher taxes and regulations.

Strange Bedfellows

News was made a couple of weeks ago when it was announced that Mike Bloomberg and Tom Golisano were going into business together-political business, that is. The NY Post described the union as a tag team: "Mayor Bloomberg is teaming up with upstate billionaire Tom Golisano to revamp the state Independence Party as an "issues oriented" group focusing on government reform, The Post has learned. "They want to combine their resources," said Golisano adviser Steve Pigeon of the effort, which is expected to be a multimillion-dollar endeavor. "It means a lot in New York state politics to have them come together."

If, as the old saw suggests, politics makes strange bedfellows, than these two billionaires-united by little else but money-have to be the political odd couple of the year. The incongruity of the union was underscored last week by the following news: "Upstate New York's economy every year is drained of a hefty amount of cash in the form of property taxes, said B. Thomas Golisano.To slow that drain, the Paychex Inc. founder turned political activist has started a petition drive through his Responsible New York political reform advocacy organization to register support for cutting property taxes, as well as an advertising blitz to promote the drive."

So, let's get this straight. In the first foray since the two announced an unlikely alliance, one of the big bucksters announces a petition drive that places him diametrically opposed to his partner; since Mike Bloomberg is the consummate taxer and big government advocate. This incongruity is underscored by the following: "Golisano made property tax cuts a centerpiece of his most recent gubernatorial campaign."

We are now awaiting the Golisano-led drive to get NYC to reform its government and lower local property taxes. Mike Bloomberg has taken exception to the new senator-select because of her stand on gun control; now let him do the right thing-dissolve the Golisano partnership because of irreconcilable philosophical differences.

Paterson Faces Challenge

In the wake of the Caroline Kennedy fiasco, Governor Paterson is facing a continued onslaught of criticism-but he won't be here to counter any of it. Why? Because he's on the way to Davos for an elite world economic forum. This, on top of everything else from last week isn't sitting well with a lot of folks. It's gotten so bad that the NY Post has become wistful for Eliot Spitzer: "This circus needs a ringmaster. That's why we're nostalgic for Client 9. Sure, old Eliot could be a little prickly at times. But you can't balance a budget without breaking a few yeggs, and the Albany Legislature has a superabundance of them - in the newly reconstituted state Senate especially. Yet also in the Assembly - where Speaker Sheldon Silver is, as always, patiently assessing his opportunities. Fact is, Paterson should just stay in Davos. Nobody will notice, and the outcome won't be any different."

And Errol Louis goes off after Paterson yesterday-calling him "Dithering Dave." Louis disagrees with our assessment of the Gillerbrand pick; but he's right in the fact that the new senator will invite challenges from the left wing of the Democratic party-something that weakens the governor as well. Leave it to Mike Lupica, however, to really slice and dice the governor: "In the end, it wasn't Caroline Kennedy who was out of her weight class. It was Gov. David Paterson.
The coverage on this now is that it was Ms. Kennedy who somehow wasn't ready for "prime time." No. It is the governor of the State of New York who wasn't ready, and now can prove it."

So Paterson manged to make Caroline into the martyr that she certainly didn't deserve to be seen as-not with all of the swells backing her no resume candidacy. But now, as the NY Daily News reports this morning, Paterson's future is on life supports: "Democrats are increasingly pessimistic about Gov. Paterson's political survival. Paterson's handling of the U.S. Senate appointment has even his allies critical of the governor - and fearful that erosion in public confidence in him could impact efforts next year by Democrats to keep their tenuous control over the state Senate as well as the controller's office."

This isn't looking good; but Paterson has the ability to turn things around-if he manages to navigate the state through the current budget process: "Assembly Speaker Sheldon Silver said Paterson ultimately will be judged on how the state handles the fiscal crisis. "Do we do a budget on time, does he provide the leadership that he has provided so far? Silver said. "I think so far he's done an excellent job."

Given the legion of skeptics that he has created, however, this is begging to seem like a Herculean task. What he has accomplished, is to create a situation where all of his missteps will be magnified-and he can ill afford any more, especially any ones of some magnitude, if he is planning to survive an election bid next year.

Paterson's Self Made Mess

It would be extremely hard to see how any one could top Caroline Kennedy's disastrous maiden voyage into politics, and to shift the focus in a different direction-but Governor Paterson managed to do just that-and the damage to his political future is beginning to become clearer in the aftermath of the selection fiasco. As Fred Dicker opines: "Gov. Paterson sealed his own fate yesterday as he insulted state Attorney General Andrew Cuomo with his bizarre selection of little-known upstate Rep. Kirsten Gillibrand as Hillary Rodham Clinton's successor. The only question being asked in state Democratic circles was not if - but when - Cuomo, who did not attend yesterday's press conference, will announce his candidacy to challenge Paterson in next year's primary."

And Paterson made Cuomo's job easier by selecting someone to succeed Hillary Clinton who will rile the party base against the governor next year. As the NY Times pointed out on Saturday: "Before the governor had even announced that he had selected Ms. Gillibrand, the pick ignited turmoil within the party, especially among more liberal downstate Democrats. Representative Carolyn McCarthy, an ardent gun-control activist who was elected to Congress after her husband was killed in a gunman’s rampage on the Long Island Rail Road in 1993, said Friday that she would start raising money next week for a potential primary challenge to Ms. Gillibrand, a centrist Democrat endorsed by the National Rifle Association."

The NY Daily News captures the almost perfect nature of the governor's maladroitness in this matter: "A civil war erupted among Democrats Friday when Gov. Paterson named a little-known upstate congresswoman to replace Hillary Clinton in the Senate. Senator-designate Kirsten Gillibrand's conservative positions on gun control, immigration and prisons put her at odds with the party's liberal downstate wing."

And the continued backbiting against Kennedy has manged to turn an entitled ingenue into a kind of Joan of Arc. How else to explain these comments: "In meetings, the governor and his aides decided she had no political depth, the source said. She had no firmly held views and little idea about why she wanted the job, the source said. Her abysmal public rollout cemented the governor's fears that she had no political instincts. The governor felt the sheltered Kennedy had no communication skills and absolutely no empathy with the voters, the source said."

All true, but besides the point; it was the governor's handling-or dithering, if you will-that allowed the situation to deteriorate. If in fact he felt that; "The nonstop Kennedy coverage, at the expense of the others Paterson was considering, also irked the governor, friends said.
He felt it made the other candidates look like they were second-best. He also felt she lacked the ambassadorial skills to make the case for New York," he needed to act with all deliberate speed.

So, as the NY Post editorialized on Saturday, the governor made a mess that he must now somehow overcome-but it won't be easy:

"All of this surely has a lot of Democrats gaping in amazement - assuming there was anything left to be amazed at after the humiliating farce surrounding Caroline Kennedy's aborted candidacy. Still, at least Paterson has made an appointment. As we have previously noted, this now-concluded sordid spectacle is but a sideshow to Albany's real drama: the state's ever-mounting budget deficit, which now stand at $15 billion through next year. It's a crisis that's needed Paterson's wholly undivided attention for weeks now, but which hasn't gotten it - thanks to his preoccupation with "intentionally misleading" people about his Senate pick so as to "keep up the suspense." Well, it worked - New Yorkers are in suspense. They're wondering how their state is going to keep from sinking in the national economic turmoil with a minimum of pain for every household."

David Paterson's choice to replace Hillary was unlikely to boost his election chances;but the key goal should have been to limit any damages. The opposite occurred. We'll give the acerbic Dicker the last word: "The insiders anticipate the situation at the Capitol worsening for Paterson, whose popularity has been sliding in recent polls, in the coming weeks and months. It's an open secret at the Capitol that his administration has been devolving into chaos, bumbling and paranoia since October. That's when Charles O'Byrne, the ex-priest who was Paterson's chief of staff-cum-personal adviser and confessor, resigned amid a tax-evasion scandal, leaving the governor without the skilled confidant he clearly needs. For a governor with limited management skills and a substandard work ethic (two months to pick a senator?), the coming grind of budget cuts and tax hikes could be enough to convince him to gracefully bow out of office at the end of his term."

Alphonse and Gaston

The governor has managed to turn the entire senate selection process into a vaudeville act-reminiscent of the indecisive Alphonse and Gaston characters; and the press is started to let him have it. In this morning's NY Daily News, Bill Hammond lets loose: "Caroline Kennedy may not deserve to be a U.S. senator, but she doesn't deserve to be slimed by the Paterson administration, either...She should not have to see her famous name and family dragged through the mud by vindictive aides to an embarrassed Gov. Paterson. Whether Kennedy withdrew because of an alleged "tax problem and a nanny issue," as sources close to Paterson anonymously claimed, they had no legitimate cause to make that public."

Ouch! And in the Post, Jacob Gershman also excoriates Paterson-even claiming that Governor Balogovich did a getter job selecting a new senator: "As the ashes of Caroline Kennedy's brief foray into politics are shoveled away, New Yorkers are left with a sad irony: Battling corruption charges and staring down certain impeachment, Gov. Rod Blagojevich did a better job of picking a US senator than did David Paterson."

The question for us is, why did Paterson's folks even have the need to trash Kennedy ex post facto? Kennedy was doing such a good job of this herself-and if left alone to flounder would have continued to do so unaided; after all, her midnight madness act was going to spur ridiculous levels of rumor and innuendo. Now, however, Paterson's made himself the issue when it was totally unnecessary: "Blago may be headed to prison, but in executing the same responsibility that rests on Paterson, the Illinois governor was confident, shrewd, and decisive - the very qualities absent from our governor. Today Paterson will put the Senate selection process out of its misery. He'll then have to deal with an aftermath of confusion, bitter feelings and outrage for which the governor has only himself to blame."

All of this can't do the governor's political fortunes any favors. As Hammond remarks: "The ones not ready for prime time are Team Paterson, the Washington Generals of politics, who have thoroughly botched the job of selecting a replacement for Secretary of State Clinton." And Gershman comes back with the following cut: "A Democratic operative familiar with the selection process summed it up like this: "The governor's handling - or rather, mishandling - of the selection process has been a circus from start to finish. With his dithering, leaks and abrupt 180s, he's managed to demean the candidates, the office and himself in the process."

So while Gillibrand gets center stage today-and the pick, however accidental, is indeed a good one-it is the governor who will have to repair his damaged image, As the Post editorializes: "All the high drama undermines public confidence in Paterson's ability to do the heavy lifting needed to balance a budget that is billions out of whack." All of which makes for an interesting election cycle in 2010.

Hello, I Must Be Going

The announcement that Governor Paterson will appoint Kirsten Gillerbrand to the empty senate seat, will not dampen speculation surrounding the abrupt departure of Carolyn Kennedy from contention early yesterday. The whole episode was bizarre; and the reasons for her leaving remain opaque-raising speculation as to why she really took her name out of contention. As the NY Daily News reports: "A nasty war of words erupted Thursday between loyalists to Gov. Paterson and supporters of Caroline Kennedy after she abruptly dropped out of the scramble to succeed Hillary Clinton as New York's junior senator. The Paterson camp contended Kennedy withdrew her name because of a "tax problem" and a "potential nanny issue" - while adding that the governor never really intended to name her because she wasn't ready for "prime time." "She was facing some potentially embarrassing personal issues" that came up in the vetting process, a source close to the governor said."

Now we're not sure why the governor's folks needed to comment on the Kennedy withdrawal, and the bitter tone of the remarks indicates that there is more here than meets the eye; and her midnight departure conjures up images of Cinderella and pumpkins. To us, however, all of this underscores just how unready Kennedy was for all of this. As the NY Times tells us: "There was incredulity in Democratic circles on Thursday afternoon after the governor’s camp engaged in a ferocious public back-and-forth with Ms. Kennedy’s side, reaching out to numerous news organizations to disparage her qualifications; one person close to the governor said that her candidacy had been derailed by problems involving taxes and a household employee, but declined to provide details."

And this: "The person close to the governor also said emphatically that Mr. Paterson “never had any intention of picking Kennedy” because he had come to consider her unready for the job." Why the piling on now? This is something that is usually left for us to do. The News follows in the same nasty vein: "The Paterson camp fired the first salvo in the war of words - and the message was particularly bitter. One source close to Paterson said the governor never intended to choose her for the Senate seat once held by her uncle, Robert F. Kennedy. The source cited her lack of policy experience and her poorly received dealings with the media, which showed "how not cool she was under pressure." "It was clear she wasn't ready for prime time after her botched rollout," the source said. "The events of the last day just prove why he wasn't going to pick her."

Of course, the guy who comes out of this looking the most foolish is Mike Bloomberg-someone who actually created the Caroline campaign and then tried to deny his own involvement in the effort-as well as his self interest in her elevation. He now becomes a candidate for "The Biggest Loser" show; and compounds it all, by trying to deny, even against all of the evidential fingerprints, that he had anything whatsoever to do with the Kennedy debacle.

So Caroline departs, and leaves the elites somewhat less grandiose. But we are waiting for more of the back story on this to emerge. And we come back to our question from yesterday: Was she pushed, or did she jump?

Brand X?

For most New Yorkers, the governor's likely choice for the Hillary Clinton US Senate seat, upstater Kirsten Gillibrand, is an x factor-someone not well known and a bit out of the liberal mainstream that characterizes downstate politics. As the NY Post reports this morning: "Gov. Paterson, defying the liberal wing of his Democratic Party, has chosen little-known, NRA-backed, upstate Congresswoman Kirsten Gillibrand to succeed Hillary Rodham Clinton as New York's junior senator, it was learned last night."

The Gillibrand selection probably sets up a bruising primary next year, with Representative Carolyn McCarthy sating she just might challenge the Paterson selection: "Sources said "at least five" members of the state's Democratic congressional delegation called Paterson to protest the possibility of Gillibrand's selection. One, Rep. Carolyn McCarthy of Nassau County, even threatened a primary challenge. Gillibrand faces a special election in 2010."

Still, from our vantage, Gillibrand is a breathe of fresh air-someone who is from the moderate wing of the party and appears to be a maverick. As the NY Times points out: "Ms. Gillibrand is largely unknown to New Yorkers statewide, but is considered an up-and-coming and forceful lawmaker in her district and has gained considerable attention from Democratic leaders in Washington." Her decision to oppose the bank bailout certainly caught our eye-and is an indication that she not someone who will meekly follow any part orthodoxy."

What this means is that the senate designee must begin at once to start a campaign for the seat that was handed to her-and the long knives will be out from those who were passed over-and from those who feel that she's not "representative" of the views of most New Yorkers; particularly on the issue of gun control. As the Times reminds us: "If Mr. Paterson was hoping to quiet the tumult over the selection process by picking Ms. Gillibrand, there were indications that he may not get his wish. Ms. Gillibrand, who has been endorsed by the National Rifle Association, is controversial among some of the party’s more liberal leaders downstate."

So let the process begin, and if McCarthy or, don't laugh, Scott Stringer want to challenge Gillibrand-and by extension the governor-let them. It should make for an interesting campaign. But from what we have seen so far, Gillibrand is potentially just the right kind of senator that New York needs in this time of crisis.

Bottling Up Supermarkets

The battle over the expansion of the bottle bill is heating up-with the new chair of the senate Encon Committee, Antonie Thompson, announcing his support for the measure: "A key Senate Democrat is backing the expansion of the bottle bill, which most likely means that before the summer New Yorkers will be paying nickel deposits on water, juice and sport-drink cans and bottles. I'm supportive of it," new Environmental Conservation Committee Chairman Antoine Thompson, D-Buffalo, said. "This is a step we need to take." Expanding the 27-year-old bottle bill that now covers only beer and soda containers has been blocked for the last few years by the Senate Republicans, who lost their majority in November. Passing the bottle-bill expansion could be the first significant policy shift caused by the flip in control of the Senate to the Democrats this year."

The senate will be the major battleground on this fight-and it's not certain if there are 32 votes in the body in favor of the measure: "Thompson's support doesn't guarantee Senate passage, and a spokesman for Senate Majority Leader Malcolm Smith, D-Queens, said the leader hasn't taken a position on it yet."

That being said, the opinions expressed by the DEC commissioner are badly off key: "State Environmental Conservation Commissioner Pete Grannis said Wednesday enacting the bottle-bill expansion may be the easiest decision lawmakers have to make as they grapple with how to close a $15.4 billion budget deficit. "As Gov. Paterson has made clear, New York is facing a staggering budget deficit and must make many hard choices," Grannis said at a press conference in Syracuse. "But updating New York's 27-year-old Bottle Bill is not one of them."

What an affront to all of the food store owners working in the city where Commissioner Grannis lives! It's never difficult for someone like Grannis, who has to our knowledge ever owned or operated a retail business, to call for impositions on entrepreneurs-ignorant, or perhaps callous, as he is about costs of operating in NYC.

As the state's Business Council says: "We think it's a hidden tax," Business Council spokesman Michael Moran said today. He said the business group also fears it will take valuable materials out of municipal recycling programs and impose a burden on supermarkets, convenience stores and other retail outlets that will have to store and process the cans and bottles."

And it is a burden that is, not only opposed by store owners, but by the workers whose jobs are contingent on the profitability of enterprises that have been going out of business in the city at an alarming rate. Our view-a close vote, with the opposition prevailing.

More on WFP's Tax Mania

EJ McMahon called our attention to his own post on the personal income tax fracas. Here's the money quote, referring to a graph that highlights the trend on taxes paid by high income New Yorkers: "As shown, the share paid by the wealthiest one percent peaked at 41 percent of all New York State income taxes in 2007. The projected drop in the share starting in 2008 reflects the Budget Division’s expectation of a sharp, ongoing drop in incomes among the wealthiest New Yorkers. But even with the steep downturn, the share of taxes paid by the wealthiest New Yorkers is expected to be higher than the 30 percent level of 1996 —when the top rate was higher." (emphasis added)

So, as has been said, everyone's entitled to their own opinion, just not to their own set of facts-and the NY trend here mirrors the national one: "And on the federal level, there is no question that the wealthiest Americans have been paying a rising share of income taxes for most of the past 30 years, despite tax rate cuts during that period."

So the WFP folks are plain wrong about their notion of fair share-and, when seen in the light of all of the evidence, it amounts to little more than the standard "soak the rich" nostrum that the Pete Seegers of the world have been advocating for years. That this is counterproductive is also revealed by the evidence.

Here's how McMahon explains it: "This seeming paradox—lower tax rates resulting in larger tax shares for the wealthiest Americans—confirms one of the principal supply-side arguments advanced for President Ronald Reagan’s tax cut package in the early 1980s. As Reagan expected, taxpayers in the highest brackets responded to lower tax rates by working more, taking more financial risks and sheltering less of their income. Amid a general growth in affluence, the booming stock market, rising real estate values and rising compensation for corporate executives also gave an extra push to personal wealth in the top tax brackets."

What New York has done-at both the state and city levels-is to allow public sector spending and expansion to go forward without regard to the consequences; and now the fiscal chickens have come home to roost: "New York’s growing dependence on high-income taxpayers is a major reason why the Empire State is now in such big fiscal trouble. Schneiderman and his fellow lawmakers budgeted huge, unsustainable spending increases when incomes among the wealthiest taxpayers were soaring, even though the trend clearly couldn’t go on forever."

So what's the end game here for the WFP and it allies? The maintainence of a public sector that supports the jobs of its constituent unions-all of which is certainly righteous politically, but may prove to be a killing of the goose that laid the golden egg; as unsupportable government drains the energy from any potential economic recovery.

But the "millionaire's tax" is a ruse; and, as we have said before, the tax threshold is never static-the legislature has its sights set on a whole lot of folks that you wouldn't characterize as millionaires: "The tax hike now being discussed in the Capitol would be much larger and further reaching, reportedly kicking in at taxable incomes as low as $250,000. That would make even more damaging to the state’s long-term recovery prospects, especially given the likelihood that a state tax hike will be compounded, sooner or later, by a sharp increase in federal tax rates."

So let's hope that the tax moderates are able to rein in the soakers; The issue isn't about fairness, it's about keeping the state's economic engine running at its greatest peak efficiency. The governor is right, this is the worst time to cede policy making to the redistributors.

Attax on Free Enterprise

As the NY Times reported yesterday, the campaign to raise taxes on New Yorkers is gaining some momentum-with our state senator, Eric Schneiderman, leading the way: "There are a lot of us who feel that for the last 30 years we’ve been shifting the tax burden from the wealthy to middle-class families,” Mr. Schneiderman said on Tuesday. “Our conference is operating through consultation and discussion, and I expect we’ll be talking about restoring some additional tax brackets for upper-income New Yorkers as well as a lot of other options.”

With NY having the ignominious distinction as one of the country's highest taxed environs, it hard to see how there has been any great shift; but in proposing this measure, Schneiderman is echoing the calls of the Working Families Party (as far as euphemisms go, this party label is one of the best): "“We are going to be running a full-throated campaign to make the case that it would be wiser to tax the very wealthiest New Yorkers rather than cut spending on the elderly, children and the disabled,” said Dan Cantor, executive director of the Working Families Party."

In our view, "working families," are those who own homes and pay a great deal of taxes already; and although the WFP will start with some of the highest income New Yorkers, it's just a matter of time before that threshold gives way to the reality of even larger budget gaps. We eagerly await the WFP proposals to reduce the size of government, so that all New Yorkers aren't forced to pony up for worthless public sector boondoggles that, by their very taxing presence, drain the vitality from private sector innovation and vitality.

Thankfully, it appears that Majority Leader Smith is reluctant to follow the Schneiderman path: "Malcolm A. Smith, the new Senate majority leader, said he was not enthusiastic about the idea but looked forward to a vigorous debate in his caucus. “I know that recent surveys have come back and shown that it is very popular among the people of the city and state, but I’m not sure at this present time it’s the right course of action,” he said, referring to polls showing support for increased taxes on the wealthy. “The conference members are split on the issue and are discussing it, but it’s my belief that it’s the last course of action we should take.”

And btw, isn't it no accident that the WFP is using Pete Seeger to raise money for its activities? As Liz B reports: "WFP Executive Director Dan Cantor sent out an e-mail fundraising appeal earlier this week entitled "Mr. Springsteen, Mr. Seeger, Mr. Lincoln" that included a clip of the "This Land Is You Land" performance that kicked off President Obama's inauguration celebration...This isn't the first time the WFP has employed Seeger to rally its backers. Last year, he recorded a Web video in honor of the labor-backed party's 10th anniversary that urged voters to pull the lever for Barack Obama on Row E, the WFP's line, adding: "If enough of us do just that, then Barack will know that he people of New York expect him to take on the big boys of the health care industry, that he stand up against the Wall Street Gang and that he end this stupid war; nothing less."

Now we have always been big fans of Seeger's music, so much so that we often overlooked is atrocious political judgment. After all, for the better part of four decades, Seeger enthusiastically parroted the Stalinist part line: "Seeger was a prominent campaigner in the struggle for African-American civil rights, and his legacy there ought be applauded. But racial equality was not the only cause to which Seeger committed himself. International communism, and in particular its Stalinist variant, was an equal, if not more, significant cause in Seeger’s public life. He was “Stalin’s songbird,” as David Boaz describes, writing about how Seeger zigged and zagged, with the rest of American communists in the 1930’s and 1940’s, in blind obedience to orders from Moscow."

Seeger was so smitten that he apparently suspended all independent thought while trashing FDR's war preparations. As Ron Radosh has pointed out: "In the “John Doe” album, Mr. Seeger accused FDR of being a warmongering fascist working for J.P. Morgan. He sang, “I hate war, and so does Eleanor, and we won’t be safe till everybody’s dead.” Another song, to the tune of “Cripple Creek” and the sound of Mr. Seeger’s galloping banjo, said, “Franklin D., Franklin D., You ain’t a-gonna send us across the sea,” and “Wendell Willkie and Franklin D., both agree on killing me.”

So it appears to us, that Seeger isn't the icon that any party should be using to trumpet its poitical-especially one that, suspiciously in our view, wants to take on that "Wall Street gang." The use of Seeger dramatizes the extent to which the WFP proposals run counter to those principles that makes America that great productive place that it is.

It's a good thing that Smith isn't buying in to this ideological pap-and, given Republican opposition, we don't think there are 32 senate votes for this measure. As the Times tells us: "Democrats would have to largely unite behind the proposal, because there are probably not many Republicans who would support a budget with income tax increases. Pending the outcome of a contested Queens race, Democrats are expected to have a 32-30 majority in the Senate. “We are not going to support increases in income taxes,” said John McArdle, a spokesman for the Senate minority leader, Dean G. Skelos, a Long Island Republican. “We aren’t going to support increases in business taxes, we aren’t going to support raising taxes on people’s insurance policies, their soda, their cable television, their satellite television, you name it,” he added, referring to some of the 137 individual new or increased taxes the governor proposed in his budget last month."

Caroliner Sinks!

Did she jump, or was she pushed? This is the big question this morning surrounding the decision by Caroline Kennedy to withdraw herself from the running for the vacant US Senate seat. The NY Times is pushing the voluntary withdrawal theme: "Caroline Kennedy announced early Thursday that she was withdrawing from consideration for the vacant Senate seat in New York, startling the state’s political world after weeks in which she was considered a top contender for the post. Ms. Kennedy on Wednesday called Gov. David A. Paterson, who will choose a successor to Senator Hillary Rodham Clinton, to inform him that she was no longer interested."

On the other hand, the NY Post sees her withdrawal as a face saving measure-coming after the governor privately let it be known that he wasn't going to be selecting the Princess of Camelot: "While she cited "personal reasons," which some said was about the Massachusetts senator, others said she made her move after it became clear Paterson likely wasn't going to pick her. Several sources said the governor, who has sole power to replace Clinton, was unimpressed with how the daughter of John F. Kennedy handled media interviews and private sessions with various officials. Three sources said Paterson had conveyed to Kennedy on Tuesday that she wasn't likely to get picked."

Whatever the reason, and the speculation will continue for a good long time, her leaving is welcome in this corner. Rarely has someone so unqualified for an office been hyped with such undeserved encomiums; and the fact that Kennedy was being pushed from behind the scenes by that great populist Michael Bloomberg, only added to the egregiousness of the entire effort. The NY Daily News underscores this: "An intensely private person with no experience in public office, Kennedy shocked New York political circles when she first threw her name into the ring about six weeks ago with the backing of Mayor Bloomberg and his political deputy, Kevin Sheekey. But she endured a rough public rollout, including an ill-received upstate swing and a round of heavily criticized media interviews."

All of this last minute scrambling serves to further paint the governor in an unflattering light-bumbling along with no clear direction. As the Times points out: "The Paterson administration scrambled to respond to the news, providing contradictory answers to reporters’ questions. Just before 7 p.m. Wednesday, Errol Cockfield, Mr. Paterson’s press secretary, said the governor had dismissed reports that Ms. Kennedy was withdrawing as “just the rumor of the day.” More than an hour later, Mr. Cockfield asked that that statement not be published, and suggested that more information would be provided by the governor’s office. But neither he nor the governor’s communications director, Risa B. Heller, would respond to further questions about Ms. Kennedy."

Let's hope that this is all misdirection-and that the withdrawal was purely a face saving for the Kennedys; because, it is our belief that both New York and its governor are better off this morning-and by all means let's take Michael Daley's advice and appoint Kennedy New York's "special envoy," whatever that means. Daley feels that we need to have someone who can help our state get into the good graces of the new president: "Maybe our mayor can now make her a kind of special city envoy to Washington in these difficult times ahead. She will still have a deep connection with our new President, one of whose daughters now sleeps in Caroline's old room at the White House. Obama has repeatedly spoken of his deep connection with Caroline, his admiration not just for her family but also for her as a writer and an advocate and a mother. His feelings for New York are not so glowing, unless they have brightened considerably since he lived here."

Oh, why not? She really belongs in the world of special-$1 dollar a year-ambassadors; and can we now stop hearing the following phony obeisance to the royal princess? "Now that he has been elected, she shows him a different New York, one of wealth with responsibility, of those who seek to bridge the divides of class and race. On her part, she recognized in Obama her father's spirit. She ventured from a life of carefully tended privacy with the hope of joining this Newest Frontier. Her father's inaugural address told us to ask what we can do for our country."

Is Daley writing this himself? New York, like all of the states of the union, needs the help of the federal government-and has good representatives who have been elected to go get that for us. On the other hand, we also need a healthy dose of self reliance; and we need leaders to make the tough choices that will lead to fiscal solvency and a stronger state government.

If David Paterson himself pulled the plug on the Princess Diaries, it is indicative of an independence of will that may very well stand New York in good stead in the challenges ahead. Leadership is about making tough choices, and the decision to jettison Caroline-if that is what in fact it was, is a sign of strong leadership.

Paterson should clarify this when he announces his choice this Saturday. New Yorkers will respond to someone who resists the toffs and the swells, and makes his choice based, not on connections and celebrity, but on experience and proven ability.

NYPIRG: Enemy of New York's Store Owners

We have watched the NY Public Interest Research Group in action for close to thirty years; and in that time have never seen the group advocate any public policy that would benefit business. Apparently business and the public interest are mutually exclusive-which tells us a lot about the group's world view. The world view in question is highlighted by NYPIRG's zealous advocacy of the expansion of the bottle bill-and its equally zealous opposition to any proposal to take the containers out of the retail outlets.

Of course, the group's mindset is not only hostile to local businesses, it is at the same time ignorant of basic economics that could better inform their policy positions-making them less subject to ridicule. Here's NYPIRG refuting an industry "myth: "

"MYTH: The Bigger Better Bottle Bill will increase beverage costs by 15 cents a bottle.

FACT: The beverage companies are exaggerating the costs of the bottle bill. The beverage companies are threatening to increase the cost of beverages by 15 cents per bottle if the Bigger Better Bottle Bill is passed. Five cents of this is a completely refundable deposit – an upfront cost that consumers can get back when they return their empty container. Of the other 10 cents, a few pennies are for the handling fee (1.5 cents additional handling fee for beer and soda, 3.5 cents new handling fee for non-carbonated beverages); the remaining 6.5-8.5 cents are “mystery costs” that the beverage companies have so far not explained or accounted for. Prices for bottled water and other beverages are already quite elastic; there is no basis for the industry’s claims that a small increase in the cost will impact sales."

To start off, if beverage companies are saying that an expansion of the bottle bill will increase prices by 15 cents per container, that supposition has nothing to do with the deposit; costs come from elsewhere and they remain a "mystery" only to NYPIRG. Unlike beer and soda, added containers under expansion come from product that is not store door delivered-water and juices are delivered with other groceries from food distribution warehouses. Empty containers can't be simply loaded onto delivery trucks for back haul. And, by the by, this extra handling-along with back room processing for recycling, is not cost free.

And for those of us who were present at the creation, so to speak, we can remember how beer and soda prices skyrocketed after the bottle bill first passed in 1981. All of this is certainly a mystery to NYPIRG. And all this is without the escheating of the unredeemed deposits-money that is currently being used to defray redemption costs. It is telling that bottle bill expanders never give a thought to using the unredeemed deposits-if they were escheated and could actually be found-to help defray retailer costs. No, they simply want to abscond with the funds for their own pet uses, and the customer be damned.

But NYPIRG is also strangely silent about how the expansion would escalate the cost of doing business at retail; apparently, this isn't one of the "myths" propagated by greedy business owners. But the group does have a strange view of the provision in the legislation that would reduce the redemption requirements for store owners located in NYC near redemption centers, saying that the provision: "Reduces the number of bottles and cans that retailers in New York City must redeem if there is a redemption center nearby. This provides a powerful incentive for NYC retailers to assist in the establishment of new redemption centers. Lowers the takeback requirements for bodegas and other small stores. Allows all other retailers in NYC to accommodate high-volume returns during the window of time that is most convenient for them."

This is kind of like a community benefit agreement for a project that has no community benefit. And, even supposing that a retailer was willing to expend the resources, "to assist in the establishment of new redemption centers," what would that do to the cost of beverages-and the profitability of inner city supermarkets that are rapidly disappearing?

And what about the reduced selling space for markets that are already cramped? NYPIRG remains silent here as well, unconcerned as it is about the fate of local food stores. Which leads us full circle. NYPIRG represents a view of the public interest that relegates business to a kind of ignominious nether world. In the group's view, advocating for those interests that create jobs and generate tax revenues, is part of a selfishness that should be eschewed; in favor of policies that will make stores and other businesses less productive as economic engines and job creators.

Bloomberg's Amour Propre

Leave it to Mike Bloomberg to make an MLK celebration all about something even more important-himself. As the NY Daily News reports: "At a breakfast honoring the Rev. Martin Luther King Jr. on the eve of the inauguration of the nation's first black President, Mayor Bloomberg lavished his grandest praise on himself. "We still have a long ways to go, but I'm happy to say I think the clouds are starting to part since the state Legislature granted us control of the school system in 2002," the mayor said, invoking the "clouds of inferiority" that King worried were discouraging black children."

Nothing has ever apparently clouded the perspective of NY's mayor-our own ray of sunshine who expects us all to bask in the light of his considerable self importance. That being said, the mayoral accomplishments in our local schools is not an area that should at any point evoke images of Dr. King-especially from an elected official whose rhetoric has never brought the great civil rights leader to mind.

We will, however, give Mike Bloomberg some credit for the attempt; while having to point out that the results are a bit less than stellar. The mayor told his Harlem audience: "For too many years, those clouds hung over our public education system, which failed to serve generations of children. ... We just don't accept failure anymore, and we aren't giving up on a single child." This is, of course, rhetorical flatulence.

The city school system is simply another policy arena where the gap between the mayor's pronouncements and the achievements of our students looms quite cavernous. And those folks in the know will unavoidably find the mayor's self promotion jarring: "It's really unfair to kids of color in the city who, when you look at the facts behind the spin, you don't necessarily see these gains," said Patrick Sullivan, who represents Manhattan on the city's education policy board. "I think it's sad that he's running for reelection and has to spin the facts."

So it appears that the upcoming city election cycle will be a battle between the two Bloomberg's-the one who's a legend in his own mind; and the actual mayor who hasn't done nearly enough for the prohibition on three terms to have been so unceremoniously lifted. Or, in other words, "will the real Mike Bloomberg please stand up!"

DEP: What a Waste!

It appears that the vaunted DEP study of the impact of commercial food waste disposers has been completed-although the agency has been quite reticent at trumpeting the results. Luckily, we have gotten some advanced news on the study's details. They are, as we predicted, almost three years ago, totally unremarkable in their self serving dishonesty. The $1million study "found" that fwds would have a "cataclysmic" impact on the sewer system; even though it did survey ten other cities were the technology is permitted, and no such dire impacts have ever been found.

Not much of a surprise; as we said in August, 2006:

"Given the DEP's publicly expressed hostility to the use of the device it makes no sense for the council to give the agency carte blanche. After all, in a letter to the sponsors of Intro 133 Commissioner Lloyd, obviously vying for a Noble Prize in Science, claimed that she had a more "scientific" method to study fwds than an empirically grounded pilot program. How will the agency sponsored study go beyond this expressed bias? Keep in mind that the Council mandated commercial waste study not only never bothered to include an evaluation if fwds, it also concluded that the clustering of transfer stations in certain neighborhoods had no negative impact on those communities. The study was ignored by all in the adoption of the SWMP."

So the Bloombergistas gave a take home exam on food waste disposers and, not content with the advantage, had their own biased folks mark the test. What's funny here is that the DEP study determined that, if only 5,000 food establishments installed disposers, it would cost the city/DEP $5 billion-or $1,000,000 per disposer. Three years ago, the agency claimed it would cost only $3 billion to adapt to commercial food waste disposers. Even adjusting for inflation, one senses that the DEP is simply pulling figures out of its tuchis. How credible is this sort of analysis?

As believable as your last month's water bill. Remember, this is the same DEP that has so much arrearage that even a collection agency is stymied. As the NY Times has reported: “We are working very hard to address that and hopefully, over time, improved collections will have a moderating effect on rate increases, but the needs of the system still dictate an increase of this magnitude,” said Anne Canty, deputy commissioner of the city’s Department of Environmental Protection, which runs the water system. “That’s not to say that we are not pursuing outstanding accounts receivable. We are.” Ms. Canty said that overdue accounts had dropped to $580 million from $610 million, and that significant progress had been made in collecting long-overdue bills."

The Times has been spot on with its exposure of the agency's malfeasance. As it pointed out: "After The New York Times reported in December 2006 that the city had failed to collect millions of dollars in overdue water bills, in large part because of poor bookkeeping, the city hired a consultant to find ways to get tough with deadbeat property owners. City water officials have made some progress in reforming the collection process. Mr. Thompson said that he was concerned that many other city agencies were also delinquent in their water bills, and that he had called on Mayor Michael R. Bloomberg to conduct a citywide review."

One reason the DEP has trouble collecting, is that it can't easily defend the rationale behind many of its bills. Without the ability to defend the bills' veracity there is no way that a collection process could survive a court challenge. For a number of years we represented the Water Group, a consulting firm that used its superior expertise to help businesses challenge erroneous water bills. It helped Columbia Presbyterian, for instance, resolve a multi-million arrearage that neither the hospital's finance director nor the DEP could justify."

As we remarked in April of 2007:

What all of this makes clear, is that the DEP is structurally incapable of being fiscally responsible. This means that all of its fiscal projections need to be taken lightly and we would suggest that the city put the agency into a form of receivership so that it can be restructured(along with the installation of competent management). Its keystone kops approach to billing would indicate that that agency should be run by Harold Lloyd and not Emily Lloyd.

The DEP study also apparently failed to address the potential benefits that the use of disposers could have for local supermarkets-something that a pilot program would have been certainly able to do with clarity. As we pointed out last May:

In all of our discussions about the disappearance of so many of our local supermarkets, the one major point we have emphasized is the high cost of doing business in NYC-from real estate taxes and burdensome regulations, to high rents and attendant operating costs. One of these high costs is the disposal of supermarket waste.Since the rules on garbage disposal were changed in 2003, the private carters are able to charge higher fees for "wet waste," the produce and vegetable matter that weighs more to truck away and dispose of in landfills. That the city wants us all to consume more of this produce-adding to the market costs-only adds to the irony of the situation.There is, however, a realistic alternative to this disposal problem: the use of food waste disposers.

Nor does the DEP address the benefits to neighborhood ecology-in a city where rats roam with apparent impunity. City Room's Sewall Chan has done the reporting on this: "In an 11-page research paper [pdf] financed by the pest-control industry, the two men looked at 32 large American cities and concluded that New York is the city most at risk of rodent infestations. (Some reports have described this as a “rat attack.”

Disposers would dramatically reduce the extant food waste that attracts these vermin-yet it appears that the DEP has elided any substantive discussion of this benefit. Instead, the agency has wasted time and money in a self serving effort to prevent the implementation of a promising technology, one that could help supermarkets and green grocers to become more profitable while enabling neighborhoods to become more environmentally friendly.

With supermarkets disappearing, and the city intent on providing neighborhoods with better access to fruits and vegetables, it is time to alleviate the DEP of any deep thinking on this important question-and move swiftly towards the implementation of a disposer pilot. The reality is that there is nothing that comes out of this agency that can be believed, and until it is overhauled more responsible folks should be put in charge of this crucial waste disposal question.

Paterson Plank Road

If Fred Dicker is right in the NY Post today, NY State might have to extend a certain road in New Jersey-Paterson Plank Road-the one near Rt. 3, right up through Rockland County and all the way up into Albany. Because if what Fred says is true, and Caroline Kennedy is a "lock" to be designated for the Clinton Senate seat, than we believe it will be David Paterson who will be walking the plank in November.

As one Democratic insider told Dicker: "Meanwhile, several Democrats pointed to Paterson's already-declining public-opinion poll numbers to warn that selecting Kennedy could worsen his chances to be elected next year. "The polls show Kennedy is not who the public wants, and every upstate newspaper has come out against her," noted a longtime Democratic operative. "Picking Caroline could turn into a disaster for Paterson," he continued."

A pick of Princess Caroline will also demonstrate that Paterson can be rolled by powerful monied forces-not a good sign for someone whose poll numbers are starting to soften: "A little-noticed Marist College poll last week showed Paterson, who became governor last March after Eliot Spitzer resigned amid a hooker scandal, with a rapidly declining job-approval rating."

Meanwhile, the process itself has become agonizing. As Liz Benjamin points out this morning in the NY Daily News: "My BlackBerry is emitting smoke from people e-mailing me the latest rumor. This whole thing has taken on a life of its own. There may be a method to this madness, but it's madness," one Democratic elected official said."

Thankfully, this whole drawn out drama will soon reach its thankful end; and its culmination will leave us with a better insight into the unelected governor-and how he perceives his upcoming election battle. Let's hope he chooses wisely.

Bloomberg's Edifice Complex and Hubrisity

Mike Lupica sliced and diced the city's pathetic defense of the Yankee Stadium boondoggle in yesterday's NY Daily News: "For the last time, the Yankees aren't building a new Yankee Stadium for the Bronx because it is the poorest Congressional district in the country. And they aren't building it for you anymore than the Mets are with Citi Field. This isn't about a grand slam home run for the city's economy. It is a grand slam for these baseball teams."

Lupica really exposes, as we have also highlighted, the incredible arrogance of Yankee team president Randy Levine: "Yankees president Randy Levine - whom Hal Steinbrenner has somehow allowed to become the angry face and threatening voice of his organization - likes to scream about lies and distortions. He ought to know. You can start here: That the Yankees moved across the street as some sort of public service. They didn't. New ballparks and new arenas are never public services and never help the taxpayers, not in the Bronx, not in Queens, not in the Meadowlands. Not anywhere."

Listening to Levine, you'd swear that the Yankees were dropping twenties over the South Bronx from a helicopter: "People had a right to ask questions about the Yankee deal in particular and the way it has been written and rewritten. Assemblyman Richard Brodsky had a right to do it without being attacked as a grandstander and fraud by Levine, who comes from the Giuliani school of politics: I'm right, you're a liar."

This is, as Lupica points out, all about Bloomberg's edifice complex: "You are not supposed to say no to this mayor. You are not supposed to say no to the Yankees when they want an additional $370 million in these tax-free bonds (on top of the nearly $1 billion in tax-free bonds they've received originally). All you are supposed to do is this: When told this is a sweetheart deal for the city instead of for the Yankees, you are supposed to nod your head and act grateful. These aren't stadium deals between Bloomberg and the baseball teams. They are mergers. And Bloomberg needs them as much as the Yankees and Mets do. Because without them, New Yorkers would start asking this mayor who promised big, huge growth projects where those projects are."

Now, the real task of the upcoming election cycle, is to expose this deal for what it is: an indefensible squandering of tax payer dollars in the middle of the city's worst fiscal crisis in three decades. And even if there is some legitimate defense of the use of this tax money-that some jobs may actually be created here-the real issue becomes whether the tax revenues diverted to the nation's richest sports franchise could have been allocated to a more productive use. Put simply: What is the cost-benefit here?

As Richard Brodsky has underscored: "You may want a new Yankee Stadium, or you may not. But whatever side you come down on, remember that it's your money that's going to build it. The Yankees are alone in insisting that it's Yankee money. Even NYC officials now admit the truth of what we've been saying, that taxpayer dollars are tearing down The House That Ruth Built, and replacing it with The House That You Built."

How does the three card monte scam work? As Brodsky tells us: "Here's how they do it. The city sends the Yankees a property tax bill like everyone else gets. The Yankees write a check (about $70 million a year) to the city for that amount, just like everyone else. But next, unlike you or I, the city winks and sends that check to the Yankees' bankers to pay off the $1.4 billion mortgage, plus the $1.4 billion in interest on the new Stadium. You or I can't get that deal, but the Yankees did. And they got a lot more. The got an additional $575 million directly to build parking garages and sewers and other stuff for the new Stadium. They don't have to pay sales tax and mortgage recording taxes that every other taxpayer pays, and they get interest rate subsidies. That's an additional taxpayer subsidy of about $350 million."

This is breathtaking in its scope-as if the deal was crafted by Bernie Madooff himself; but it's the Yankees who have madoff with our money-and are doing so, in RICO fashion, with the active collusion of Mike Bloomberg: "And there are some, if limited, economic benefits to the city and the Bronx, which needs all the economic activity it can get. There won't be a lot of new jobs in exchange for our $4 billion. At most, 57 new permanent new jobs will be created (more likely only 22 as the Yankee official application says). But the Yankees also say they will create more than 1,000 part-time jobs. That's good, even if most of those folks will work only 80-90 days a year, and many will be minimum wage jobs. And there are more than 5,000 temporary but well-paying construction jobs. "Maybe a new, taxpayer funded Stadium is a good thing. Maybe the old Stadium wasn't good enough. But in the face of our current economic and social pain, shouldn't the city at least ask the Yankees to put up additional Yankee money and reduce the taxpayer burden? Is it unreasonable to ask one of the richest private corporations in the world to recognize the pain that New Yorkers are now undergoing?"

Good questions that need to be asked in the fall; since Brodsky apparently is the only elected official aside from Billy Thompson, with the cojones to call out the mayor for being the Yankees' toady. In all, the stadium deal is a monument to Bloomberg's edifice complex and his monumental ego.

John Catsimatidis Weighs Mayoral Run

Let us say right off the bat that John Catsimatidis is our client, and a friend for over twenty five years-so anything that we might say will be taken with a grain of salt as self serving. That being said, John brings a lot of really good qualities to the upcoming mayoral race; that is, if he decides to run this time around. Some of these qualities are raised in last week's City Room profile.

As City Room points out: "In a race dominated by money — Mr. Bloomberg is expected to spend at least $80 million — Mr. Catsimatidis is likely to be the only other candidate with pockets deep enough to match the mayor’s spending dollar for dollar. Mr. Catsimatidis said that if he decided to run for mayor this fall, he would challenge Mr. Bloomberg in the Republican primary. Mr. Bloomberg has not officially said which party line he will seek, but it is widely believed he will run as a Republican or an Independent, or perhaps both.

But it's not only the money that makes Catsimatidis attractive; you see, John is the ultimate New York City success story-an immigrant's son who opened up one store and turned it into a multi-billion dollar empire. What separates him starkly from Mike Bloomberg, is John's affinity for the city's neighborhoods and people. He knows what every small business owner knows; high taxes and over regulation is the greatest threat to New York's economic vitality-and the success of the city long term resides in the innovation and vitality of our neighborhoods.

Catsimatidis is also someone who hasn't really ever left his immigrant roots-and is as comfortable in a local coffee shop as he is at the Regency for a power breakfast. He won't be someone looking to build costly monuments at the expense of local communities. As one blog commenter pointed out: "Wait a minute, Alyssa. Catsimatidis has been in NY his entire life and worked his way up literally from the bottom. He and Bloomberg are 2 TOTALLY different people if you read their bios. This guy doesn’t seem to care that much about $…. you think just maybe it’s somebody who just cares about NY…."

The city needs a real innovator-and nothing in the past seven years gives us any indication that Mike Bloomberg either gets it, or that his skill set elevates him into the atmosphere of Papal Infallibility. For the city to revive, it needs a leader who understands, both the larger fiscal issues, as well as the reality that real economic growth will only occur when the size and scope of government is reduced-something that Mike Bloomberg has never grasped.

Which brings us to the Republican Party challenge. Will the party, left in the lurch by Bloomberg's opportunistic labeling in 2001, be so desperate that it will accede to the mayor's millions again in 2009? In yesterday's NY Daily News, Liz Benjamin raises this issue: "Mayor Bloomberg appears to have his own Gang of Three problem. Much like new state Senate Majority Leader Malcolm Smith's leadership post was held hostage for two months by three renegade lawmakers who refused to back him, Bloomberg's bid to land the Republican line for his re-election bid could be blocked by a trio of obstinate GOP county chairs. Since the Democrat-turned-Republican-turned-Independent mayor ditched the GOP in June 2007 to prepare for a never-realized run for President, he now needs permission from three of the city's five GOP party chairs to run on the ballot line he had for his 2001 and 2005 campaigns."

Will he get it? Or will the party anoint Catsimatidis as the more natural heir to the party's core principles? As Liz tells us: "The three Republican chairmen would love nothing more than to support John Catsimatidis for mayor," a highly-placed GOP source said. "If we could all agree on a Democratic candidate, we might even back him." Catsimatidis, a Democrat-turned-Republican supermarket mogul, recently met with all five GOP county chairs and said he will continue to explore a possible mayoral run. Since he switched parties, Catsimatidis won't need permission to run as a Republican."

This won't be easy, since the the mayor's money is beguiling, to say the least. But perhaps this time the part is actually looking for something to stand for-and we don't mean Mike Bloomberg's monumental ego: "Brooklyn GOP Chairman Craig Eaton wouldn't rule out the possibility of endorsing a Democrat, although he said that's "unlikely." Eaton confirmed the three Republican chairs are "united" in their desire to back a candidate who will "grow the party" and help win back seats in Albany before the next round of legislative redistricting."

If true, Catsimatidis is the more attractive candidate. In our view, the backing of Bloomberg will simply hasten the Republican Party's slide into political oblivion.

A Job for Mike Bloomberg

Well, if this third term thing doesn't work out for Mike Bloomberg, there's a cooll jod waiting for him down in Washington. How about the Czar of the soon to be established Federal Health Board. What will this Board do? Watch out: "This is the mechanism that Tom Daschle and Barack Obama intend to set up, as Daschle's book spells out in excruciating detail. Such a board would decide what kind of medical treatment will be provided in this nation. What kind of medical treatment you and I will get."

Pretty scary stuff; and as the blogger here asks: "How can a few, a board of hack central planners, know what kind of medical benefits your children need when they're rationing who gets what? They can't. You're about to turn these decisions over to a handful of bureaucrats, who will be called "experts." A board of bureaucrats -- not you -- will decide the healthcare fate of your children. You won't. They will."

This is where all of the Bloomberg nannyisms are headed-and the question here is where are all of those prochoicers who tell the government to lay off of their bodies? Is privacy only a right for women who are concerned about their pregnancy rights? This Fascist health board fight is where the real issue of what kind of government Obama will preside over will be decided.

Feckless Leadership

We have already commented on Mike Bloomberg's phony disposition on politics and ideology in his state of the city speech; but what's really a pip, is his spinelessness in not tackling the city's greatest problem: the size of government and the existence of a bloated municipal workforce.
Leave it to Nicole Gelinas to call him out on this fecklessness.

Gelinas points out in her NY Post column, that it is vital for the city to upgrade its infrastructure-particularly so we can see the commute times for New Yorkers properly reduced; which is something that the mayor now promises to do: "How important are commutes to New Yorkers? Well, the night before Bloomberg's speech, nearly 700 regular people came out for a marathon seven-hour hearing at a Manhattan hotel to voice their fears over proposed subway and bus-service cuts. Why didn't the city use its boom-era dollars as leverage to insist on these upgrades to our most important assets (at a time when emerging cities around the world were investing heavily in their infrastructure)?"

The reason lies at the heart of the Bloomberg failure: "And the main reason those vast boom-year tax revenues couldn't go toward better infrastructure is that they went toward supporting ever-higher salaries and benefits for public-sector workers instead. As the Citizens Budget Commission pointed out last week, the average city worker costs more than $100,000 a year once you include their generous benefits, including mostly free health care. These same benefits costs for public workers, of course, are what imperils the rest of what the mayor talked about yesterday, too."

So did the mayor, who disdains politics and ideology, take this opportunity to call for the serious trimming of public worker benefits? Not on your life; that would take real political courage: "So, it's good that the mayor said yesterday, "It's become painfully clear that the time has come to bring our municipal pension system in line with reality. . . People are living longer and longer, yet we're still offering full retirement benefits after only 20 years of service. It's costing taxpayers a fortune." But it's too bad that the very same mayor lavished the municipal workforce with huge raises into 2011 just a few months ago - because that generosity removed a huge incentive for that workforce to support any reform."

This being an unexpected election year, the mayor was out at Brooklyn College bobbing and weaving-or shucking and jiving might be a better way of describing his failure to call for real reform: "Plus, the reforms the mayor has proposed are not only a day late but also a dollar short. While Bloomberg has supported some (very) modest changes from Albany to future pension benefits, he's said very little about expecting workers to pay a little something for their own health benefits - which could save hundreds of millions a year, every year, almost immediately."

Again, why not? Well, because this would upset the very same workers who Bloomberg is counting on to support his re-election. For a man with all that money, Mike Bloomberg demonstrates an astounding deficit of political courage. Instead of actually taking a hard political stand-something that the Bloombucks could then be employed to defend in front of the larger electorate-he elects to pander: "The mayor would've been better off using his time yesterday to announce one new initiative for the year. He should have pledged to use his political capital to explain to the public clearly why the state, the city and all-important public authorities like the MTA must work relentlessly to cut public employees' benefits to a competitive level, starting with those health benefits."

Without this kind of political courage, there's no good reason to give Mike Bloomberg another term in office. These are, after all, dire and challenging times. If all we're going to get in the charm of a third term is sucking up to municipal labor, we might as well elect one of his impoverished challengers. Gelinas has the last word on this: "The mayor and the governor have to set the bar here - nobody else will. And the public should understand the true cost of the mayor so far not having done that job."

State of the City: Mirror, Mirror, on the Wall

Hans Christian Bloomberg gave his State of the City fable, and it was a real knee slapper-especially the part where the mayor pledged to create 400,000 new jobs. As City Room reports: "But the speech focused mainly on his nine-point plan, which he broke into three main parts: Spurring job growth; strengthening the quality of life to prevent the deterioration that consumed parts of the city in the 1970s; and a hodgepodge of austerity and efficiency measures...With roughly 3.5 million full- and part-time jobs in New York, the mayor’s plan, if achieved, would amount to more than a 10 percent increase in the city’s work force."

We just knew that the headline was to good to be true; Mike Bloomberg initiating a policy to, at least we first thought, to create 400,000 private sector jobs. Not so, however, since it appears that all of the new jobs are government generated-predominately in environmentally friendly areas. The man simply hasn't got a clue about the best ways to insure economic growth.

That is clearly seen in his perverse focus on what he termed "neighborhood quality of life." As NY1 reports, the mayor told his audience: "In fact the best thing we can do for Wall Street-and for every corner store in the city-is the second leg of our economic recovery strategy: continue ti improve the quality of life in our neighborhoods..."

This is pretty much ass backwards-it is the health of our stores that drive neighborhood quality of life-by creating a vibrant retail climate that attracts customers and enhances neighborhood safety. The begged question here is: How does this retail environment prosper? And the answer-nowhere to be found in the Bloomberg panegyric-lies with a reduction in the cost of doing business; a concept that is apparently absent from the Bloomberg policy repertoire.

There was, however, one tax cutting initiative that the Times reports the mayor is proposing: "Another item that would have to be approved by legislators in Albany was the mayor’s proposal to eliminate or reduce the Unincorporated Business Tax. The tax, which is up to 4 percent of gross revenues, discourages freelance work because workers also have to pay personal taxes.
The mayor said that New Yorkers who recently lost their jobs would be discouraged from starting to do freelance work or starting their own business because of the tax. Getting rid of the tax would save each of them up to $3,400, he said. “Let’s give their bottom lines a boost when they need it most,” the mayor said."

Well, if it makes sense to boost the bottom line for freelancers, what about neighborhood store owners? The reality is that, through increased taxes and burdensome regulations, the bottom line for stores has taken a severe beating over the past seven years-and nothing the mayor said yesterday promises any change for the tens of thousands of Mom and Pop retailers all over New York City who have been suffering under one of the most restrictive economic climate in the country.

Bloomberg the fabulist out did himself, though, with the following side splitter: “We will get New York City through these hard times that with the same approach that has always worked for us,” the mayor said. “Independent leadership based on facts and pragmatism – not politics and ideology. Innovative thinking that embraces new solutions to old problems – and an insistence on accountability, always.”

The only real innovation we've been able to discern, are the new and innovative ways the mayor has found to describe the alleged achievements of his administration-from the expensive school system stagnation heralded as a major accomplishment; to economic development boondoggles like Yankee Stadium that are described as, "great deals," by a mayor who has little evidenced concern for city tax payers.

Or, as Clyde Haberman views the phony politics/ideology disparagement: “Politics” is Bloomberg-speak for what everybody running for office does — except for him. “Ideology” is an adherence to certain fundamentals of democracy that he finds inconvenient. Of late, he has applied that word to those who believed that, since New Yorkers had voted twice in the 1990s to impose a two-term limit on most elected officials, the voters should have been asked once more if they had perhaps changed their minds."

Yesterday's speech reminds us of the old Ronnie Milsap song. "A Legend in My Time: "

"If heartaches brought fame
In love's crazy game
I'd be a legend in my time
If they gave gold statuettes
For tears and regrets
I'd be a legend in my time"

So, into what should have been Mike Bloomberg's swan song, we have another campaign speech; and the mayor is out to convince us that his great accomplishments obviate our distaste for his trumping of the popular will on term limits. Unlike Milsap, however, Bloomberg actually believes that his legendary status is built on a solid foundation of accomplishment. After all, who are you gonna believe, Mike Bloomberg and his billions of dollars worth of political propaganda, or your own lying eyes?

Randy Rhetoric

Co-opting the sports axiom that, "the best defense is a good offense," the Yankees' Randy Levine took off on Assemblyman Richard Brodsky yesterday, claiming that he belonged in the "Grandstanding Hall of Fame." As the NY Times reports: "Mr. Brodsky, as I said in my testimony before Congress a few months ago, your behavior in this entire matter is worthy of the Grandstanding Hall of Fame,” said Mr. Levine, who then criticized the assemblyman’s support of tax incentives to Monticello Raceway and campaign contributions from entities “involved” with the track. “The tone of hostility,” Mr. Brodsky said, “is not appropriate, or the accusations.”

Here's how the NY Post lays out the Levine offensive; what it calls a "bean ball" war: "The battle over the new Yankee Stadium produced more drama yesterday than a walk-off home run in the bottom of the ninth. Club President Randy Levine, speaking at a state Assembly hearing in Manhattan, called the project's main critic "disgraceful." And the city's economic-development chief, Seth Pinsky, accused the critic, Westchester Assemblyman Richard Brodsky, of "deliberately misrepresenting the facts."

Of course, this kind of political theater serves to distract attention away from just how bad this stadium deal is. The Times captures this in this morning's editorial: "Mayor Michael Bloomberg and the development agency should renegotiate this latest round of what has always been an incredibly generous deal for one of the richest teams in the country. At a very minimum, they should insist that the Yankees pick up more of the city’s share of the project, which now amounts to $362 million."

Will Mike Bloomberg listen-and admit error in this boondoggle? Not a chance! And will the NY Times hold this-and other examples of expensive patricianage-against Bloomberg when he runs this fall? Again, not a chance. Just as the paper swallowed its principles on campaign finance to endorse the mayor in 2005-after he broke the pledge not to spend as lavishly as he did to get elected the first time.

But the stadium deal is what passes for economic development with the Bloombergistas-big deals for the big guys; and bubkas for the rest of us. Juan Gonzales captured this in his column last week, and he deserves the last word on this outrage: "Less than three years after they got $942 million in tax-free bonds for a new Bronx stadium, the Yankees are at the public trough again. With our city facing the worst financial crisis since the Depression, and more than 200,000 people expected to lose their jobs by the end of the year, baseball's richest team wants another $260 million in tax-free bonds to help cover a stadium cost overrun of $370 million."

Paterson's "Make My Day" Moment

The Seneca Indians-much as The Mouse That Roared of movie fame-is taking on NY State government in a challenge to the effort by the governor to insure that the tribe collects taxes on all cigarettes it sells to non-Indians. The challenge is to set up their own toll booths on the NYS Thruway. Here's how the NY Post describes this outrage: "Now this is clever: The Seneca Indians, smarting over Gov. Paterson's latest attempt to collect taxes on their booming illicit cigarette trade, this week announced they'd retaliate by slapping their own tax . . . on the New York State Thruway. It's an "illegal business," too - or so the tribe would have it."

What a great opportunity for Paterson to demonstrate that he has the capacity to lead-and to forcefully insure the rule of law. The tribe simply has no legal leg to stand on: "But while the tribe may couch its behavior in high-sounding terms like "sovereignty" and "treaty rights," all they're really showing is a breathtaking contempt for the rule of law. The US Supreme Court ruled 15 years ago that states have every right to collect taxes on reservation cigarettes sold to non-Indians - the vast majority of the Seneca trade. And their Thruway nonsense runs afoul of a 1954 agreement - upheld by a federal court - in which the state paid for the right of way."

But what the Seneca are planning is open insurrection: "Indeed, to hear Seneca leaders talk, you'd think they were already in open rebellion: "Our concern as nation leaders justifies taking any and all prudent actions to protect and defend the nation's economy and the way of life of the Seneca people," declared the tribal president, Barry Snyder - himself a big-time cigarette retailer. And "prudent actions," for the Senecas, are sure to include organized violence. After all, the last time the state tried to enforce the tax, in 1997, bands of Senecas set fire to tires piled on the Thruway and brawled with state troopers who came to clear them away."

Make no mistake about it; this is a declaration of war-and it needs to be met with the appropriate forceful response. In fact, as the governor gets his troops ready, he should propose to the legislature an even more fool proof piece of legislation than the one recently passed that addresses the Seneca (and other tribes) tax evasion practices. The new bill would require that the cigarette manufacturers remit all taxes on their products before their products are even delivered to local wholesalers. Collection simple; case closed.

As far as the Seneca threat, Paterson should be clearing out enough prison cells to accommodate the entire lot of them. As the Post righteously states: "Back in '97, of course, then-Gov. George Pataki responded to the violence by caving in - setting off another dozen years of tax evasion that enriched criminals, starved state revenues and put the squeeze to law-abiding retailers. Paterson can't afford to make the same mistake."

Have a NYCHA Day

Errol Louis writes this morning about a protest being conducted by residents of public housing-and provides another example of the less than stellar management acumen of Mike Bloomberg: "At 10 o'clock this morning, a few hours before Mayor Bloomberg delivers his annual State of the City address, a group of demonstrators will be marching outside the headquarters of the New York City Housing Authority, delivering, in protest form, a State of the Projects report.
The march will be led by the council of tenant association presidents, leaders elected by the 400,000-plus NYCHA residents...They want a role in picking a new chairman for the troubled agency, and they are demanding a credible plan to end the chronic funding shortfalls that leave the agency $200 million in the hole each year."

The shortfalls have led to a number of well documented tragedies-which doesn't begin to tell the story of the level of mismanagement and disregard at NYCHA: "That's true. Public housing - intended as stable, safe, affordable living space for working families - charges tenants 30% of their income, using public subsidy to bridge the gap between the rent rolls and the cost of fuel, sanitation, security and basic upkeep. The gap has grown vast in recent years, leading to life-and- death problems chronicled with depressing regularity in the Daily News and elsewhere. The elevator problems get the most attention, like the tragedy at Brooklyn's Taylor-Wythe Houses in which 5-year-old Jacob Neuman died while trying to escape one of the perennially stalled lifts."

The NYCHA tenants have had enough-and are calling for a role in choosing the new chairman of the authority; the well-meaning but bumbling former chairman, Tino Hernandez, has left: "An audit by Controller William Thompson found that it takes NYCHA three years on average, and sometimes as long as five years, to fix a crumbling apartment. And the audit found "no formal coordination of the removal of apartments from the rent roll and relocation of tenants with the estimated time budgets for the rehabilitation projects." Today's protests are residents' way of saying no more. They are demanding input into the selection process as Bloomberg searches for a permanent replacement for Tino Hernandez, who recently resigned as NYCHA chairman."

If this is a no mas moment, than it should be directed at the mayor; since this is simply another area where Mike Bloomberg has fallen flat-another indication why a third term is an affront to New Yorkers. Instead of looking for a Hernandez replacement, NYCHA residents should concentrate on one for the hapless Mike Bloomberg.

Sweet Carolyin'

Wayne Barrett continues to expose Mike Bloomberg's elitist subornation of the US Senate replacement process for the departing Hillary Clinton. In this deconstruction, Barret reveals the extent to which Kennedy is, in reality, simply a cats paw for the mayor's ambition: "When I see Caroline Kennedy, I think Mike Bloomberg. In the contest for Hillary Clinton's Senate seat, Kennedy is to Bloomberg what the City Council was to the mayor in his term limits battle—a partner in the spoils, yes, but, ultimately, little more than a pawn in his power grab."

How so, you may ask? According to Barrett, the Kennedy ploy is designed to outflank his potential Democratic opponents in the fall: "A Kennedy selection, should it happen, would become the prelude to a more formal alliance, or at least a non-aggression pact, between Bloomberg and Paterson that will carry through the 2009 mayoral election and the 2010 gubernatorial and senatorial races. Since Paterson, like most governors, is the leader of his state party, such a coalition would undercut any serious challenge this year to Bloomberg, a registered Independent."

Let's not forget that Paterson stood by-no doubt greatly relieved-while Bloomberg hijacked the term limits restriction and obviated any potential gubernatorial challenge in 2010; and thereby probably also deprived Bill Thompson of a legitimate shot at the mayoralty: "No wonder Paterson told reporters that he would "love to have the mayor around" for four more years, though he was officially neutral on the Council bill."

What the Kennedy elevation does for Mike "I'm Above the Special Interests" Bloomberg, is to wash away the stank of his love affair with all things Republican: "Bloomberg's strategy: to box Paterson in again, just as he did on term limits, by offering up an irresistible choice. Kennedy's selection would subsequently link the mayor to the ultimate Democratic family just as Bloomberg was launching his own re-election effort...With a Democratic high tide, nationally and in New York, Bloomberg is suddenly doing all he can to cement his ties to the party. But if that awkward arrangement is going to work, the mayor has to hope that his new friends, like Paterson and Kennedy, don't look too carefully at the last eight years."

Barrett now evinces a different Bloomberg, a more cynical fellow than the one that, in his view, exhibited a refreshing candor in his first term: "As candid as Bloomberg was early in his public life, he is now just another player, moving from evasion to spin to falsehood." We're sure, however, that the original article was no different than the current self serving pol; it's just become more obvious to some of the previously gullible.

The Voice piece does a real service in the manner in which it exposes the blatant political uses of the city's Department of Education-an argument that Barrett advances to question the wisdom of perpetuating mayoral control of the city schools. Chancellor Klein is seen as the Muneco-in-Chief in all of this.

As he points out: "Klein made a national appearance on CBS for Kennedy and even penned an op-ed for CNN.com that championed her candidacy, which was reprinted in a newsletter published by the Department of Education. Because Kennedy's 22-month stint between 2002 and 2004 as Klein's chief executive of the newly created Office of Strategic Partnerships is the only job she's ever held—a (very) part-time, $1-a-year position—the chancellor is literally the only employer she can turn to for a recommendation letter. His gushing has been so embarrassing that even Kennedy has tried to play it down. According to the Times, Klein "credited her with bringing in a $51 million gift from the Gates Foundation," the largest donation in school system history. But Tom Vander Ark, a nationally renowned educator who ran the Gates program and made the grant, told the Voice that "she didn't have anything to do with it." Asked what her role was in another $50 million in smaller grants that Gates gave the city between 2003 and 2005, Vander Ark, who is hardly a Klein enemy and praised him for his innovation, said: " 'None' would be an overstatement."

Only among the toffs could such an obvious disregard for qualifications be advanced with a straight face. When we examine the Kennedy resume we find...well, absolutely nothing. In contrast, Bloomberg should have been supporting Sarah Palin for a Nobel Prize: "When the Times subsequently got an extended interview with Kennedy, the reporters asked about Klein's original claim that "she brought the Gates grant in," wondering: "Do you feel like maybe the people who are fans of yours have been trying to bolster you perhaps a little too much, and maybe giving you too much credit for the fundraising?" Her answer, which the Times published in a transcript but did not cite in its story, was: "I think it was important to Bill Gates that I was there" at the announcement (Vander Ark says he believes it was the first time they ever met). Kennedy still claimed that she should get "some of the credit" for the grant, contending that she only participated "right at the end" because "it coincided with the time I came into the department." In fact, the grant was made in September 2003, a year after she started and more than halfway through her brief tenure."

So it appears that in the only "job" Kennedy has held in her adult life, she was basically a no-show: "One of Kennedy's principal assignments when she worked at DOE was to oversee the Fund, yet its 990 forms, which are filed by law with the IRS, indicate that she only worked an hour a week in 2003, and two hours since, a calculation that Holliday dismissed as merely "a reporting procedure." The same forms, however, require the Fund to estimate the worth of Kennedy's "donated service," and, though the Fund typically listed hundreds of thousands in that broad category of non-cash donations, Holliday concedes they never claimed a cent for Kennedy."

All of this apparently doesn't phase Al Sharpton-someone who's opinions are apparently for sale. On Inside City Hall last night the reverend claimed that Kennedy was only being opposed because she had had the audacity to support Barack Obama in the just past election cycle. Sharpton then went on the extol Caroline's "impressive" resume-"writing" seven books and, "working" in education. He also pointed out, ignoring the fact that this is an appointment process, that there were many sitting senators who lacked these stellar Kennedy credentials before entering the Senate; eliding the fact that the majority of those folks had placed their fate in the hands of the voters.

Barrett deserves the last word on this outrageous charade: "The campaign that she and Bloomberg have conducted for this appointment is a campaign of prevarication. Its assumption is that David Paterson, who was first installed in the Senate two decades ago by a Harlem-based Democratic county committee when the incumbent died, and who rose to governor when another incumbent quit in disgrace, is too weak and uneasy about the challenge that awaits him in 2010 to do anything but knuckle under to their cabal. They believe Paterson will see Bloomberg and Kennedy's political marriage as a lucrative source of potential contributions for his own campaign, though Kennedy has given almost as little to New York Democrats as she has to its public school children, and Bloomberg has only bankrolled Republicans."

Yankee Stadium and the Special Interests

We have long argued that it was a fundamental error to say that Mike Bloomberg, owing to his great fortune, was therefore above the special interests that so often prove nettlesome to the well functioning of politics for the general good. In our view, Bloomberg, rather than being above these sometimes tawdry interests, actually embodies them. Nothing could more clearly underscore this point of view than Jim Dwyer's column on the controversy over the building of a new Yankee Stadium.

As Dwyer demonstrates: "Suppose you are Mr. Bloomberg, your hopes of becoming president or vice president all but vanished. You have to step down as mayor in 2009 because a law that you unequivocally supported says you only get two terms. How handy, then, to have powerful allies, like the developer, Jerry I. Speyer and the lobbyist, Howard Rubenstein, to convince other influential people that term limits will deprive the city of an essential leader during an era of financial crisis. Mr. Speyer is building Yankee Stadium. Mr. Rubenstein represents the Yankees. Their stated case for Mr. Bloomberg never rested on the mayor’s support for the stadium, but on his qualities as a manager and their view that he would be the most capable steward of the city during hard economic times."

Of course, these are the kinds of quid pro quos that don't find their way into poorly reasoned legal decisions about term limits-apparently even judges are beguiled and beffuddled by all of the mayor's money. And the sweetheart nature of this deal is being whitewashed by the folks at EDC: "The Yankees are paying for the entire construction of the new stadium — the plasma television screens and all,” David Lombino, a spokesman for the city’s Economic Development Corporation, wrote in an e-mail message that took exception to a column I wrote last week about the deals. “The more expensive stadium they build, the more debt they take on and the more money they must pay back.” The Yankees are indeed paying off the tax-exempt bonds that will finance the bulk of the stadium construction, but they are doing so instead of paying property taxes."

And then there are all of the ancillary costs-those that the tax payers will be on the hook for: "Moreover, the claims that the Yankees are paying for the entire construction — trumpeted throughout the process — rests on an illusion achieved through precision language.
There is far more to building a stadium than simply its construction. To replace the 22 acres of parkland the city turned over to the Yankees, to build sewers and roads that will support the stadium, the city will spend $325 million — money that will be borrowed by the taxpayers, leaving that much less for other public projects."

And Dwyer put the lead pencil to the job creation chimera: "The city is proud of the deal, officials say, because it will create “1,000 permanent new jobs.” If you scratch into the official filings, it turns out that there are actually only 22 new full-time jobs expected. The rest are seasonal positions — valuable, certainly, but only if they really exist. And what if the team doesn’t create 1,000 new jobs? Does the city have any mechanism to hold the team accountable, to get back some of its investment? Asked about this on Tuesday, Mr. Lombino, the spokesman for development corporation, said there is none. It seems only prudent — honest, even — to move the promise of 1,000 new jobs onto the balance sheet of the invisible."

So what we have is another example of the "independent" mayor carrying water for the real estate and big business folks-arguing all along that this is really in the overall public interest. And while Bloomberg continues to do this-and let's not forget his shilling for the Wall Sreeters-the local economy, made up of thousands of small and neighborhood firms, is left to flounder in this economic climate; buried by, not only the exigent times, but by a mayor who has imposed tax and regulatory burdens that have stifled growth and caused further hardship that could have been mitigated by more sensible-and sensitive-economic development policies.

YanKeys to the City

Bill Thompson has joined with his erstwhile Democratic opponent, Anthony Weiner, in lambasting the city's sweetheart deal with the NY Yankees. As Liz tells us: "Thompson, who says he intends to fight with Weiner for the right to challenge Bloomberg on the Democratic line in November, accused the mayor and the city IDA of "financial incompetence" and "incredible mismanagement" during negotiations on paying for the the new Yankee Stadium. Since the IDA initially approved stadium deals for both the Yankees and the Mets in 2006, city's capital contribution to the Yankees project has ballooned from $129.2 million to $325 million, Thompson said, adding: "While our financial review cannot determine intent, this incredible mismanagement begs the question: Was this plain old incompetence or a blatant attempt to mislead the public? Either way, New Yorkers now have a box-seat view of fiscal mismanagement."

Hear here, and all praise Richard Brodsky who has subpoenaed Randy Levine and EDC's Seth Pinsky: " New York Assembly committee investigating the use of millions of dollars in public funding to build the new Yankee Stadium has subpoenaed the team's president. Assemblyman Richard Brodsky, a Democrat from Westchester County, said Tuesday that his committee subpoenaed Yankees president Randy Levine as well as city Industrial Development Agency Chairman Seth Pinsky. Brodsky said the subpoenas compel the officials to appear for questioning at a hearing Wednesday, and to provide documents the committee wants for its investigation into whether public money should be used for the new stadium in the Bronx."

This doesn't sit well with the mayor's folks who, against all evidence and good sense responded to Brodsky's request: "Brodsky's move was criticized by New York City Mayor Michael Bloomberg's office. "I guess it makes for good political theater because it's the Yankees, but when it comes to valuable taxpayer dollars, decisions should be made on return not rhetoric," said Bloomberg spokesman Andrew Brent. "The deal leverages a federal program and will result in New York City getting back more tax revenue than it will cost and the South Bronx getting thousands of new jobs and more than $1 billion in private investment."

Talk about a real Phyrric victory for the South Bronx! It seems that the use of the South Bronx appellation here is a refuge for the scoundrels who are stealing tax dollars for the nation's richest sports franchise-as if those "thousands of new jobs" and $1 billion investment will actually be some real boon to the surrounding neighborhood that has seen its one real attraction, its lush local parkland, destroyed for the construction of the new ballpark.

Apparently, however, both Comptroller Thompson and Assemblyman Brodsky simply are blinded to all of the obvious stadium benefits: "The city comptroller William C. Thompson Jr., on Tuesday accused Mayor Michael R. Bloomberg and the New York City Industrial Development Agency of bungling the negotiations over the new Yankee Stadium, saying the project’s direct cost to the city has skyrocketed to $325 million from $129.2 million as a result of a series of oversights and mistakes."

Thompson went on to outline the "litany" of mistakes: "Even so, Mr. Thompson’s report amounted to a stinging rebuke of the Bloomberg administration over what the comptroller called a litany of lapses. The cost of demolishing the old Yankee Stadium was underestimated by more than 50 percent, he said, while officials failed to conduct environmental reviews that might have uncovered the problem of waterfront oil tanks at the site of the new stadium. Furthermore, Mr. Thompson said, officials underestimated the cost for a rooftop park and retaining wall; the projected costs have risen by 30 percent, to $44.5 million."

And Thompson goes on to underscore the lack of real oversight by the Bloombergistas-another example of the class mindset and lack of fiscal acumen that has come to characterize this overrated group: "Mr. Thompson’s review also identified several instances in which the city gave up potential sources of revenue. It agreed to surrender use of 250 parking spots to the Yankees as part of its negotiations for a luxury suite, resulting in a loss of $500,000 in revenue per year, and continuing discussions will probably result, Mr. Thompson said, in an additional loss of $750,000 in annual revenue from three billboards, on which the Yankees want the rights to advertise."

So, as we anticipate another election cycle where Mike Bloomberg will once again break all spending records, dramatically injecting his own version of an economic stimulus into the local economy primarily for his own benefit, we will be able to add the Yankee Stadium development to a long list of mega projects launched by a mayor who has lost sight of the needs of average New Yorkers in the pursuit of monuments to his own ego.

The question remaining is, will this have political resonance? As the NY Times points out this morning: "Voters may recall a similar controversy: four years ago, Mr. Bloomberg’s push for a West Side stadium gave his Democratic opponent what seemed like a huge campaign issue — until the stadium project was killed by state legislative leaders, and the issue quickly evaporated. What could give the stadium issue traction this year, however, is the city’s dire financial condition — presenting a stark contrast between struggling, insecure New Yorkers who don’t earn major league salaries, and the hundreds of millions of dollars the new stadium complex is costing them. “Bloomberg is the businessman mayor, that’s been his big claim to competence, and here they’re whacking him where he is the strongest,” said Maurice Carroll, director of the Quinnipiac University Polling Institute."

Add to the jarring nature of the excess, is the jock sniffing and sophomoric attempt by the EDC lackeys to grab a choice luxury box for their use: "Mr. Bloomberg is already distancing himself from the more controversial parts of the deal with the Yankees. After embarrassing e-mail messages surfaced that showed his aides zealously pursuing a luxury suite in the new stadium, his administration announced that it would give the luxury box back to the Yankees in exchange for payments of at least $100,000 a year."

We'll give the pollster Carroll the last word here: "My guess is this won’t be the end of it by a long shot,” he added. “These are tough economic times, people are being told we’ve got to economize, we’ve got to tighten our belts, and the Yankees are blowing money by the carload for players.”

Coming to Terms

It certainly appears, given the ruling today by Judge Sifton, that Mike Bloomberg (and Chris Quinn) will be on the ballot this fall. As Liz reports, it appears that the judge made his decision bedecked in full scuba gear regalia: "US District Court Judge Charles Sifton has rejected a legal challenge to the term limits extension sought and signed into law by Mayor Bloomberg, agreeing with the city's argument that opponents of the change will have the ability to demonstrate their displeasure at the voting booth.


"To permit this particular group of legislators and city officials to run for re-election and thereby offer the voters the chance to select seasoned leaders at a time when the economic position of the city must be dealt with serves a legitimate government purpose," Sifton wrote.

"Because no fundamental right was infringed, and because the term limits amendment bears a rational relationship to a legitimate government purpose, no reasonable fact finder could conclude the defendants had violated plaintiffs' substantive due process rights."

Glub, glub, glub, the judge is so far in the tank that he apes the mayor's (and the speaker's) ersatz "time of trouble" plaint as a bolster to whatever legal argument he's making. And reaction from Bill Thompson to the ruling was swift. As City Room points out: "Mr. Thompson, who intends to run for mayor this year, said in a statement: 'The court’s decision today is certainly disappointing in upholding the notion that the Mayor and a majority of the City Council acting solely in their own self-interest can overturn the will of the people. Twice, New Yorkers have voiced their opinion on term limits. However, with a stroke of the pen, Mayor Bloomberg silenced that voice in November.'"

The likelihood is, however, that Mike Bloomberg will face the voters armed with another $80 million to spend. Will this blatant power grab make a difference? We agree with Randy Mastro's take on the court's decision. As he told Daily Politics: "It’s a sad day for our local democracy that a court would say that our local elected officials could get away with such a thing. We think that is illegal. We know that it is wrong."

And we also know that, absent the $80 million, there would be a line around the block to challenge the fiscally dense mayor-it would be bigger than an American Idol audition. It now appears that the November election will be the ultimate challenge to the good sense of New York voters. We hope they're up to it.

The Senate Reformation

The road to reform is never easy, especially when it involves elected officials ceding some of their authority to their political adversaries. So it's really no surprise, that senate Dems are talking about, "a path to reform," rather than some immediate shake up of the traditional ways that the body has done its business. As the NY Times opines this morning: "New York Democrats have been trumpeting the need for reform in state government for decades. Only one thing stood in their way, they argued: they needed control of lawmaking in Albany. Now they have that control — a Democratic governor plus Democratic majorities in both branches of the State Legislature. And, guess what? Instead of reform, Democrats are promising something called the “path to reform.” In other words, once again, the real thing is somewhere down the road and still out of reach."

Naturally, Republicans aren't thrilled: "This proposal does not go far enough,” said George H. Winner Jr., a Republican who represents southern central New York. “Right off, we’re starting on the wrong foot.” Republicans offered an amendment to require equal resources for all senators, an issue that has become a major source of anxiety for the Republicans, who will receive less money to run their offices than they did when they were in the majority. The irony of the Republicans’ complaints was not lost on some Democrats, who noted that they had complained for years that they lacked the resources to purchase even small items like office supplies."

But some of the proposed changes are indeed good ones: "In perhaps the most significant change, Majority Leader Malcolm Smith, D-Queens, said he would provide a base budget of $350,000 to each senator, regardless of party affiliation. Historically, budgets of Senate and Assembly members have been determined by each conference leader, effectively a way to reward or punish behavior of individual legislators. Last year, Senate majority members were given an average budget of just under $446,000; Senate minority members were given an average of $274,000 each."

And in the matter of legislation, there will be a bit more of a bipartisan balance. As the Times points out: "The changes approved on Monday included provisions that give minority senators more authority to challenge the majority and play a larger role in the legislative process. The changes would also strengthen the roles of Senate committees. Under previous rules, senators in the majority party could refuse to allow minority senators to sign on as co-sponsors of legislation. But under the new rules, any senator can co-sponsor any bill."

And with the narrow majority that the Democrats hold, this is not insignificant-since all legislation will likely be looking for bipartisan support to insure passage: "Individual senators will also have more leverage to force a floor vote on legislation that has stalled in committee. Under the old rules, senators in the minority had very limited recourse if the majority had blocked a bill of theirs. They could call for a floor vote on the bill, but the “no” votes were never recorded, and debate was strictly limited. But under the new rules, full debate will be allowed and all votes will be recorded."

Much of this is necessary if the legislature is going to be able to overcome its well deserved reputation for dysfunction. But even more important will be substance-how well the body responds to the fiscal challenges. If the public perception is more of the same, than the majority party may well be vulnerable to the Republican challenge in 2010; a repeat of what happened over forty years ago.

Cost-Deficit

We just might be about to have a real mayoral debate on municipal governance-with traditional Democrat like Anthony Weiner critiquing the city's current fiscal Maven-in-Chief, the legendary Mike Bloomberg, for profligacy. As the NY Daily News reports: "Mayor Bloomberg bears some blame for the city's fiscal crisis for presiding over bloated payrolls, soaring expenses and heavy debt, Rep. Anthony Weiner said Monday."We have engaged in the worst kind of boom-bust planning," Weiner told a Citizens Union forum, saying Bloomberg focused on megaprojects like the Olympics, a West Side football stadium and congestion pricing while failing to keep an eye on the cost of government. "Where did the money go? We spent it," said Weiner (D-Brooklyn/Queens), a likely challenger to Bloomberg this fall. "We now have 33,000 more full-time employees, which is a 13% increase. It is as if we hired the entirety of Middle Village, Queens, to work full time for the city."

Let's hope that the city's dirty little secret finally gets out: Mike Blomberg has not governed New York with any degree of real skill or prudence. When it comes to the size and scope of government, Bloomberg has simply padded the public payroll without any real commensurate productivity gains from the public work force. But don't simply take our word for this.

As Carol Kellerman of the Citizen's Budget Commission writes today in the NY Post: "Pay increases are directly attributable to contract settlements with unions. The Bloomberg administration's contracts have been generous both historically and comparatively. The mayor's early stance that hikes should be funded by productivity gains or other concessions produced some givebacks in negotiations. But the latest settlements awarded civilian and uniformed unions 4 percent annual wage increases, well above projected inflation, with no concessions."

So it appears that Bloomberg, acting like the grasshopper in the fable, has not acted with any degree of awareness that the city's boom times might end and we'd be faced with huge deficits-this while his cohort of financial geniuses down at Wall and Broad systematically were looting investors and bondholders in the run up to the country's fiscal meltdown. Please remind us just why we need this kleyner kluger for another four years.

The good news is that it looks as if there will finally be some real focus on the Myth of Mike-and Weiner has begun a deconstruction process that we hope will be aided and abeted by Bill Thompson. As the NY Times reports: "Attacking a central theme of the mayor’s third-term bid — his mastery of finances — the congressman suggested that Mr. Bloomberg had become a profligate spender, unwilling to ask city employees for any sacrifice while adding tens of thousands of workers to the payroll."

Weiner hit at the mayor for being old fashioned and out of touch with the needs of the city's middle class: "Offering a blueprint for his mayoral run, he emphasized the need for affordable housing, lower taxes on the middle class and fiscal restraint in the city’s budgets. Allies of the mayor, on the other hand, praised Mr. Bloomberg’s budgetary prudence, and said that municipal raises were necessary to compete with the suburbs. In a position that could put him at odds with powerful unions, Mr. Weiner said that new city employees would need to bear a greater portion of their health insurance costs and settle for a less generous pension plan."

So we're beginning to see the battle lines drawn-but make no mistake about it, the mayor's money is an extreme challenge: "Scott Levenson, a Democratic political consultant who has worked on campaigns in the city, said that Mr. Bloomberg’s campaign war chest was enough to give any rival pause. “You have to be daunted by a guy who is willing to spend infinitely,” he said."

It will be interesting to see if the mayor's rivals will be able to utilize the mayor's great wealth against him-especially at a time when the financial elite is under such fire. Will Bloomberg's lavish campaign spending become an Achillis' heel? All of this awaits the canpaign ahead-that is, if the lawsuit on term limits doesn't suddenly throw all of this speculation out nthe window. Now that would certainly be something, wouldn't it?

Wither the Middle Class?

In the ongoing debate over the governor's call for fiscal austerity, there has emerged a concern over the concept of "shared sacrifice." In the view of a number of advocates, the sacrifice in the governor's proposals is being borne too heavily by what they describes as the middle class. Here's how the Gotham Gazette frames this: "Advocates with big hopes for a Democratic majority were left reeling after the governor's speech. "If the State of the State had a theme, it was the repeated phrase "shared sacrifice." But critics like Billy Easton, executive director of the Alliance for Quality Education, found that disingenuous. "The governor reiterated the call for shared sacrifice," said Easton, "but he is not listening to New Yorkers who overwhelmingly want those earning over $250,000 to share in the sacrifice by paying a little more in taxes." "Instead of soak the rich, it's soak the middle class," wrote Dan Cantor, executive director of the Working Families Party, in a statement."

All of this has an air of unreality to it-with middle class being reified as a construct with little bearing on real world definitions. In our view, the middle class-home owners, small businesses and tax payers all-is being gouged by a bloated government apparatus that is too large, unwieldy and much too expensive to maintain. As far as quality education is concerned, how is the middle class helped by school systems that already spend lavishly per pupil with little to show for the increased funds?

The discussion of the millionaire's tax begs the entire question of whether this government is functioning in an efficient manner for the citizens it is supposed to serve. In this sense, the debate over the millionaire's tax is the kind of non sequitor that allows advocates to divert attention away from government dysfunction, and towards a class warfare approach that will do more harm to the very same middle class that these folks purport to represent.

Here's how they explain their position in regards to education: "In particular many advocates see the governor's budget ax falling disproportionately on the education sector. Paterson has abandoned a program of increasing aid to needy districts and instead has proposed cutting $2.5 billion from the state's legal commitment to fund schools that are most in need. Palast, whose Campaign for Fiscal Equity sued the state to secure more state funding for New York City schools, said that Paterson's cuts to education will further delay improvement in school districts that are in desperate need of funding. Palast said state budget could be boosted by "progressive revenue options," such as the Fair Share Tax reform. Easton said he fully expects the Senate Democrats to come through and "stand up to the governor and make restoration of the cuts to education. They supported us in the minority and we expect they are the same people they were before they took the majority."

Notice that there's not a word about the size and scope of government-let alone any awareness about how unwisely all of the increased funding over the past decade has been utilized. To do so, would be to become part of a solution. And where do these folks think that tax revenues actually come from?

This folks clearly come from the "Hear No Evil" set; unwilling to confront the fiscal meltdown with anything that will enable the state's economy to get through these really tough times: "And yet, after Paterson delivered his speech, it was clear that many of those groups had not heard what they hoped to. "The state of our state is perilous," Paterson warned before launching into poetry and rallying cries. He did not issue the expected doom and gloom diatribe about the realities of the economy in an attempt to convince legislators and the public to accept the deep cuts he has proposed in next year's budget. The budget, though, was clearly the backdrop to the address and to the beginning of this session in the state capital."

What we need from the legislature is a bold plan to retrench on government waste; and a clear program of reform that eliminates duplication and unnecessary agencies and programs. In this context, the call for more taxes, is not the way to go-as is potentially ruinous for the very people that the advocates say they are acting to defend.

NY Times Misconstrues Paterson's Health Policies

In yesterday's NY Times, the paper seeks to analyze Governor Paterson's health agenda-and in the process badly misconstrues the way in which his policies will, or will not, impact the lives of New Yorkers. The Times sees this agenda as somehow promoting inner renewal, since the governor is, "...turning the familiar call for political change into an appeal for healthful living as he promotes a number of anti-obesity measures, from a sugar tax on soft drinks to posting calorie counts in chain restaurants. He has joined what has become a movement looking inward, asking people to blame themselves for their bad health."

Now, if the governor is looking to tax the folks for drinking Coke and Pepsi, this isn't a call, in our view, for any inner transformation: taxing is by its nature a coercive act. This is the government acting in ways to dictate what it believes to be healthy behavior-a trend that is decidedly unhealthy for the long term prospects of a free society.

The Times does, however, recognize the extent to which this effort may fall flat: "Lifestyle changes are easier said than done. Changing ingrained behavioral patterns, doctors say, can be as hard as getting legislators to pass an income tax increase." In fact, it's a lot easier to get a legislature to increase taxes, especially one that simultaneously is marketed as good for our health. But will the tax on soda be effective?

As one doctor from NYU told the Times: "At the N.Y.U. opening, in mid-December, Dr. Robert I. Grossman, dean of the School of Medicine, said it was “relatively easy” to define molecules or understand abnormal conditions. But, he added, “Our failure as a society has really been to appreciate the difficulty in modifying behavior.”

But the paper lauds Paterson for his attempt, while eliding both the difficulties as well as the dangers inherent in this approach to health policy: "It is hard to fault the governor for trying. When there is no money, the challenge for smart politicians is to present an agenda that does not seem to cost anything. His health agenda, much of it needing legislative approval, echoes public health campaigns pioneered by Mayor Michael R. Bloomberg in New York City and Gov. Arnold Schwarzenegger in California."

This misconstruing of the Bloomberg Nanny-style approach, of course disregards the fact that tax policy does have a cost-and, as in the case of cigarette taxes, can mean millions of dollars in lost revenue to the city and state (something Bloomberg belatedly realized). Which brings us to the soda tax.

As the Times points out: "His most aggressive proposal is to charge an 18 percent tax on sugary soft drinks (but not diet drinks), which he estimates would reduce consumption by 5 percent and raise $400 million in revenue." Where this estimate comes from is anyone's guess-and we believe that's all that it is, a guess. As one researcher remarked: "There’s a lot of buzz about prevention,” said Peter J. Neumann, director of research at the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center in Boston. “In general, I am sympathetic to that, but you have to be careful about what you’re claiming and about the science and the evidence.”

Which may mean that there will be almost no behavior modification as a result of any soda tax (except in the case of Indian retail sales, as we've pointed out)-that is, should it pass: "While there is good data that links stopping smoking to preventing lung disease, she said that as far as she knew, there was little data on the health value of a soft-drink tax or of banning junk food in schools. This is partly because the value is so hard to measure. People who are deterred from buying soda might substitute other sugary drinks. Students deprived of junk food might still nibble some of the candy they sell for school fund-raisers."

Who cares about the evidence; not when it's better to appear good than to be good-and not when your real objective isn't health, but simply revenue enhancement. Dr. Russell from Rutgers understands the nuances here: "Dr. Russell said that what struck her about the governor’s agenda was that it took health care outside of the medical sector, like food and water regulations. “You don’t go to a doctor’s office, you go to a greenmarket,” she said. “You’re not in a hospital when you get those calorie counts.” To some degree, she said, the governor’s seemingly low-cost proposals represent a subtle kind of cost-shifting, with little recognition of the impediments. It may be hard to walk in suburban neighborhoods with no sidewalks, or hard to leave work early to go to the gym or cook a healthy meal when jobs are scarce. “In fact, time is one of our ultimate scarce resources...”

What's nettlesome about the Times article is that the reporter presents some very good skeptical evidence that Paterson's going in a wrong, and possibly self-defeating, direction-yet she ignores it and draws unsupportable conclusions from the evidence: "The N.Y.U. center’s director, Dr. Olugbenga G. Ogedegbe, said his own studies showed that patients were turned off by being told that something terrible would happen if they did not take their medicine or eat right or exercise. “Positive psychology can help in the adoption of healthful behavior,” he said. Of course, the beauty of the governor’s plan is that if you fail, you have only yourself to blame."

Of course your wallet will be lighter, and local food businesses will have less revenue; and if so, we'll have only the governor and the legislature to blame-and ourselves to the extent that they are our representatives. Let's hope that clearer thinking will intervene, and the budget will exclude any experiments in healthier living; we'll all be healthier as a result.

Update

Here's a piece on the tax from the Democrat and Chronicle that highlights the growing opposition to the soda tax: "Foes of Gov. David Paterson's proposal for an additional 18 percent tax on nondiet sodas and other beverages are trying to beat back the idea, saying that it is unlikely to make people healthier and will cost jobs. "This is purely a money grab and ... at the worst time for middle-class families," said Craig Stevens, a spokesman for the American Beverage Association."

And there is a growing coalition of opponents to the idea: "The group is forming a coalition of business, labor unions and community advocates against the so-called "obesity tax" Paterson has proposed. Besides nondiet sodas, sweetened iced teas and other soft drinks, it would be assessed on fruit drinks with less than 70 percent natural juice."

Stevens went on to underscore that the tax is misdirected: "Instead of targeting the beverage industry, the governor should focus on educating the public on the need for moderation and more physical activity, Stevens said." Exactly so-and Paterson should concentrate on trimming the fat from a bloated state government; after all, that's what he is supposed to be in charge of.

Indian Soda Jerks

Governor Paterson's proposed soda tax is under fire from a number of quarters; and now comes a different argument against the levy-Indian retailers who will be able to circumvent the tax (as they do with cigarettes) and thus undersell nearby local convenience outlets. As Tom Precious of the Buffalo News (via Liz) points out: "The battle over taxfree cigarettes and gasoline on Indian reservations is now expanding to another commodity: soda and other sweetened drinks. Gov. David A. Paterson intends to impose an 18 percent surcharge on soft drinks, on top of more than 8 percent in existing state and local sales taxes already collected in most counties. That would give Indian retailers who don’t collect the taxes an unfair advantage for the beverages, critics say."

So, in addition to the fact that the tax is unlikely to alter behavior in the direction of health, it may turn out that the only behavior modification achieved will be to further change consumer buying habits at the expense of small store owners: "The proposed tax imposes a surcharge on all nondiet soda. So a $1 bottle will have an 18-cent extra levy before adding the existing sales taxes. The proposal also would hit an array of other soft drinks, such as punches and sports beverages, that do not contain at least 70 percent natural fruit juice. “It is continuing to put us at a competitive disadvantage,” said Michael Newman, executive vice president of NOCO Energy Corp., which runs 32 convenience stores in Erie and Niagara counties."

Now the differentials here aren't as great as those for cigarettes-where the tax is confiscatory-they are enough for bulk purchasers to take advantage of the price gap: "No one predicts the Indian retailers would enjoy the same sort of booming Internet trade selling taxfree soda as they do with cigarettes. But they say people living near Indian reservations will stock up on soft-drink purchases at Indian shops to save 25 percent or more in state taxes and surcharges. “Our stores in Erie County would have a price disadvantage of 26.75 percent,” James Calvin, executive director of the New York Association of Convenience Stores, said of the proposed surcharge and existing sales tax rate."

In evaluating the proposal, the legislature should realize that this proposed surcharge has nothing to do with reducing anyone's waistline; and the only reduction we'll see is in the bottom line of local store owners and beverage distributors. This is a tax that doesn't deserve serious consideration from the legislature.

Immaculate Deception

The NY Daily News opined yesterday-citing the CBC's report-about the ballooning personnel costs that threaten the solvency of city government: "Numbers just published by the Citizens Budget Commission reveal that the price tag for the average city worker has soared to $107,000 a year. That breaks down to $69,124 in pay and $37,619 in health insurance and pension costs.
Both sides of the ledger have gone off the charts since 2000, rising faster than inflation - with the expense of benefits skyrocketing by an astonishing 182%. At a time when the city is going broke, Mayor Bloomberg is contemplating deep service cuts and taxpayers face big hikes, the figures are indefensible."

Absolutely, the situation is intolerable, but the News writes as if the current indefensible state of affairs has arrived through some form of immaculate conception: "New Yorkers have every right to expect that in these tough times the city's labor force will recognize that the public no longer has the wherewithal to foot the bills. Sacrifice - reasonable sacrifice - is in order."

The NY Post calls it like it is: "But the scariest part is how fast these costs have grown: In 2000 - shortly before Mike Bloomberg became mayor - the city's yearly tab was just $65,000 per average employee. So the cost has soared fully 63 percent since then - twice as fast as in the private sector."

The reality is that we're facing this budgetary problem because our Fiscal Maven-in-Chief has been misfeasant-failing to rein in the size of government because he simply didn't believe in the necessity of doing so. This is the same Bloomberg that the News is touting for a third term owing to the belief that the city needs his acumen in these economic hard times. Here's how the NY Times had described the personnel fiasco: "Bolstered in part by Mayor Michael R. Bloomberg’s spending, the average New York City employee cost the city $107,000 a year in wages, health insurance, pension and other benefits in the 2008 fiscal year, an increase of 63 percent since 2000, according to a new report."

Quite the disconnect to us-especially from a paper that is quick to hand out Knucklehead Awards for some rather minor political peccadillos. If Joel Rivera deserves a Knucklehead designation for wanting to use zoning to cut down on the number of fast food restaurants in low income areas, what kind of award does Mike Bloomberg deserve for failing to rein in the cost of city government when the municipal treasury was flush?

According to the Daily News, Bloomberg's award is a third term; an indication of either the paper's lack of acuity and balance, or more likely, symbolic of it's essence as a special pleader for a friend and classmate. Given the obvious lapse in judgment, we suggest that the News should refrain from now on in pointing fingers at the wayward among the political class.

Deposit Nightmares

The folks at NYPIRG who are so eager for an expansion of the bottle bill, really don't understand what dangers they would wrought if the bill should pass in its current incarnation. Of particular concern, is its call for the state to grab the unredeemed deposits: "Generate new funding for local environmental needs by requiring beverage distributors to transfer any unclaimed deposits to the State Environmental Protection Fund. Currently, beverage companies are keeping an estimated $140 million a year in unclaimed deposits from bottles and cans that are not returned. New York is out of step with many other states, which require beverage companies to return unclaimed bottle deposits to benefit the public."

Does these advocates really understand just how the deposit system works? Or are the being purposely disingenuous? The unredeemed deposits are income that the bottlers and distributors use to pay for the cost of the recycling system. Just examine how much it costs the NYC Department of Sanitation to pick up and process recyclables-it comes to better than $300 per ton. So if you remove this revenue stream what is likely to occur is that the cost of redemption will be further passed on to beverage consumers; in other words a tax on soda and beer drinkers.

Than there's the problem of empty container tansshipment. As the NY Balance web site points out: "The millions of new bottles and cans in the system will mean longer lines at stinky, sticky recycling centers and grocery stores, as well as storage and handling headaches for retailers across the state. And that's just the legal returns. But it will also certainly fuel an entirely new, multimillion dollar industry in lucrative, underground "bottle-legging" by unscrupulous amateurs and professional crooks eager to mine refunds from bottles they purchase deposit-free from outside the state."

But what this commentary misses is even more foreboding than even an active underground economy. You see, under the current system, the deposit initiator redeems and accounts for the returned container. This is a fiduciary responsibility that is zealously undertaken because every container redeemed is a nickel (plus 2.5 cents handling) that the initiator must fork over to the retailer or redemption center-it comes right off of the bottom line.

If, however, the state becomes the ultimate repository of these unredeemed nickels, than there's no real interest for the wholesalers and bottlers to act as scrupulously in the accounting for the unredeemed containers-and all kinds of sleight-of-hand behavior is likely to occur. Even if initiators aren't purposefully looking to game the system, which we believe they won't do, there will be many others who will act to take advantage of a less vigilant review process.

Ultimately, in our view, this will result in the worst of all worlds: increased prices for beer, soda and all of the newly included drinks; and a redemption rate that rises close to 100%-thus depriving the EPF of any real new revenue. In order to avoid the latter, the state would need to add hundreds of new inspectors to the DEC, and even then, we don't believe it would do much good at detecting the gaming process.

All of this needs to be seen in the context of what the increased number of containers in the redemption system will mean to the beleaguered food retailers in NYC. Make no mistake, the bottle bill-and particularly an expanded version-is an expensive regulatory mandate that increases the cost of doing business at a time when supermarkets can no longer afford to operate in certain areas, places where a good market is crucial to the health of neighborhood residents.

So for a whole host of reasons, the expansion of the deposit law makes little sense. It will abet the decline of urban supermarkets, while at the same time adding additional costs for consumers at a time when unemployment is rising and incomes are falling. The measure needs to be defeated.

Tax Plan Fizzles

The governor's plan to tax soda is running into opposition-and not just from soda bottlers. As the NY Daily News reports, some purveyors of other kinds of sugary drinks are taking exception to, well, the plan's exceptions; particularly the pass given to calorie laden fruit juices: "A fat lot of good this is gonna do. Fizzy drink makers are lashing out at Gov. Paterson's obesity tax, saying it will burn a hole in people's pockets without winning the battle of the bulge. The proposed 18% levy on some sodas, fruit juices and carbonated drinks has come under fire for including flavored sparkling beverages that have fewer calories than those made just from fruit."

The reality here is that there is no rationale to just tax soda-at least if your goal is to make government the arbiter of what you can, or cannot eat: "The proposed tax is completely irrational," said Liz Morrill, founder and CEO of Fizzy Lizzy, a brand of natural sparking juice. "It imposes no tax on 100% juices such as Tropicana Pure Premium Orange, which has a whopping 165 calories and 33 grams of sugar per 12 ounces, but levies a massive 26% tax on Fizzy Lizzy Tangerine, which contains only 100 calories and 24 grams of sugar per 12-ounce bottle."

The road to hell here is really being paved with misguided intentions-and the premise of the tax, if extended to its logical conclusion, would make everything fair game for greater government intrusion into individual decision making. After all, there's an argument that could be made (and alsways a nanny to make it) for taxing a whole lot of supposedly unhealthy things.

But if you tax soda, where do you ever draw the line? As the News says: "Paterson's proposal aims to help New Yorkers stay lean by making it more expensive to buy nondiet sodas, fruit drinks with less than 70% natural fruit, or carbonated drinks containing sugar, fruit juice, additives or flavoring."

And if the tax is too low to change behavior? The next logical step is to increase it to see where the pressure point will be for behavioral change. The end result of this modality? Increase taxes on an increasing number of products-and the health of local business be damned.

Yanking Our Chain

Juan Gonzales continues his crusade against the egregious exploitation of NYC Tax payers by the Bloombergistas-and their partner in crime, the New York Yankees: "Less than three years after they got $942 million in tax-free bonds for a new Bronx stadium, the Yankees are at the public trough again. With our city facing the worst financial crisis since the Depression, and more than 200,000 people expected to lose their jobs by the end of the year, baseball's richest team wants another $260 million in tax-free bonds to help cover a stadium cost overrun of $370 million."

This news comes on top of the Citizens Budget Commission report that underscores just how well Mike Bloomberg (and the city council) has given away the store to the public work force-also at the expense of the city's hapless tax payers. But the stadium is a monument to the mayor's arrogant disregard for reining in costs: "The itemized list of extra stadium costs that city officials released this week is truly astounding. There's $137million to pay for concessions at the new stadium - including a swank new Yankees Steakhouse, a Hard Rock Cafe, a museum and a conference center. The Yankees added most of those items to the stadium budget after the city approved the original financing plan."

Critics of the additional funding are calling for a new hearing before the bond vote next week: "This is bizarre," said Assemblyman Richard Brodsky (D-Westchester), a longtime critic of the stadium deal. "We don't have enough money for our schools or the subways, yet they want to give the Yankees money for a steakhouse and granite ramps?" Brodsky joined Assemblyman Jim Brennan (D-Brooklyn) to call an emergency public hearing for Wednesday to review the Yankees' new request."

Clearly, the new stadium, sitting on top of the grave yard of Mullaly Park, is going to be an exquisite example of high class amenities, but why so at the public expense? As Gonzales argues: "Team officials, it seems, are sparing no expense to make this the most luxurious, high-tech structure ever imagined. They have a perfect right to splurge in any way they wish - with their own money. When they're getting a tax break, it's another matter."

Yankee Stadium will end up costing double what the Mets ball park will cost-and the level of subsidy, when seen on top of the callous despoliation of neighborhood green space, will dramatize and characterize just what kind of mindset the mayor brings to economic development: monuments to luxury and excess that treat local folks as nonexistent appendages to private sector greed.

"He Knows the Buck"

This is getting real close to being an Abe Beame moment for Mike Bloomberg. You might remember that Comptroller Beame ran and won the mayoralty in 1973 using the slogan: "He Knows the Buck." After demonstrating little fiscal acumen, as New York slid into the fiscal crisis that put the city into receivership, Beame was ridiculed for having touted his financial acuity.

How close is Mike Bloomberg to his own Abe Beame impersonation? Well, if current financial reports are any indication he is realclose indeed. As City Room reports: "Now comes word today, through a new report [pdf] by the Citizens Budget Commission, that the average compensation cost of full-time employees of the city, when including both pay and fringe benefits, is $106,743. The report documented the skyrocketing costs of pensions and health insurance."

Where was Mike Bloomberg when this out of control personnel spending was mushrooming? As Nicole Gelinas outlined a few days ago: "It's almost jaw-dropping that the mayor, faced with these projections and with no hope of a return to a bubble-era "normal" on Wall Street, has made things worse. City workers' salary growth, for example, is set to rise 13 percent between now and our drop-dead year - largely because the mayor late last year voluntarily entered into labor contracts granting hefty raises to both civilian and uniformed workers. The cost of higher pay adds nearly $1.7 billion to the drop-dead-year deficit. Plus, the city-funded workforce has grown by more than 12,000 people in the last three years - so even the 4,556 job cuts that Bloomberg projects won't bring us back to 2005."

And things are going to get much worse, as Eliot Brown points out: "The city’s Independent Budget Office just released a dour report on New York's fiscal picture, projecting a cumulative $11.3 billion in budget gaps over the next two and a half years and $18.3 billion by mid-2012. Such figures would represent substantial shortfalls requiring major cuts and/or new revenues, given a city budget currently of about $60 billion. The IBO report shows budget gaps far larger than the Bloomberg administration’s estimates released in November, with IBO projecting $6 billion less in revenue than the city did over the next three and a half years, according to the report."

All of this doesn't sit well with the CBC. As the NY Times reports: "City worker compensation grew twice as fast as that of employees in the private sector and elsewhere in the public sector during the same period, the Citizens Budget Commission said in the report, which was released on Thursday. The increase was driven by contractual raises that outpaced the inflation rate, and by the rising cost of health insurance and pension benefits, said the commission, a business-backed research group. The group said those benefits have remained “exceptionally generous” under Mr. Bloomberg."

Bloomberg, much like the grasshopper in the fable, was idly playing philanthropist (with the tax payer's dough), while the city's fiscal situation deteriorated-and don't tell us that no one could have anticipated the meltdown. Bloomberg's approach to government-let's say his generosity of spirit-made the current crisis almost inevitable: "These skyrocketing costs are stunning,” said Carol Kellermann, president of the Citizens Budget Commission, “and they impose an enormous, and growing, burden on increasingly strained taxpayers. Corrective action is essential and can no longer be delayed.”

Mike Bloomberg allowed government and the municipal work force to expand as tax increases and Wall Street cash allowed the city to get flush. In light of what has transpired, and in light also of what we know historically about the city's fiscal peaks and valleys, this amounts to political malfeasance on the mayor's part: "Thus budget experts regard New York as a city that sees far greater peaks and valleys than the nation as a whole, with mountains of cash flowing in during the high times and budgets getting squeezed close to suffocation during the tough times."

The mayor, however, was hoisted on his own ideological petard; one that construed government expansion as a good thing-and he made few real demands on the labor force, opting instead to bargain for tranquility rather than demand greater effeciences.

What has been Bloomberg's big idea, promoting citizen health by banning transfats and requiring calorie posting on fast food menus? And this from a mayor who, because of his financial background and his lionization by acolytes for fiscal shrewdness, now wants term limits ended so he can be given a third term. Give us a break!

Assignment for Disaster

According to the NY Daily News Adolfo Carrion, who we last saw spreadeagled in anticipation before for hosing prepared for the Bronx Terminal merchants and the neighborhood folks around Yankee Stadium, may be a candidate for Hilary Clinton's senate seat. This is so preposterous, that we're moved to cry out, against all of our previously stated observations: "Give the seat to the Princess instead!"

Here's what the News says: "Add Bronx Borough President Adolfo Carrión's name to the long and growing list of potential candidates being considered for appointment to New York's soon-to-be-vacant Senate seat." Please tell us Davis, that this is all window dressing; because the thought of the craven AC in the US Senate is too chilling to bear-even given the fact that the body has coughed up some real winners in the past few years.

Carrion's performance as Bronx BP is nothing more than mediocre-with a slavish attention to the needs of real estate transcending any real concern for the people of the borough; and his crafting of bogus CBAs for the Gateway and Stadium deals is a clear indication of his lack of qualification for either the senate seat, or the White House post he's rumored to be in line for: "In being considered for the White House job, Carrión has had to deal with criticism from some local Web sites and e-mails over actions he has taken - or has failed to take - as borough president."

Let Adolfo put himself before the voters based on his record-and let's see what happens. But given his record, we can understand why he wants to be appointed to something-anything.

Senatorial Scorecard

Crain's Insider is laying out the winners and losers in the just concluded senate leadership fight, and, as expected Malcolm Smith is at the top of the list: "Malcolm Smith. He might never be as powerful as Joe Bruno was, and he’s been tarnished by the process of winning the Senate majority leadership, but four weeks ago this outcome looked very much in doubt."

Quite true, but it is important to point out that Amigo ringleader, Senator Carl Kruger, emerges as a big winner-especially considering where he stood just two short months ago. Does any one think that Kruger, after being close to Majority Leader Bruno, would have been given a plum assignment by the new leader?

The Insider recognizes this (but overlooks the other two amigos unfortunately); and goes on to throw props our way as well: "Sen. Carl Kruger. “He was as out of favor as anyone could possibly be,” an insider says, but by holding the Gang of Three together, he nabbed the Finance Committee chairmanship and a $34,000 lulu. Lobbyist Richard Lipsky, who handled media for Kruger gratis, also gained."

On the losing side, the Insider singled out two unions who made a major misstep-but should, we believe, given them top billing: "CSEA and 1199 SEIU. The two unions stuck with Senate Republicans until the end."

The big unresolved question is whether or not the people of New York will be the winners in all of this. The will be answered only when the Owl of Minerva flies.

Obesity Epidemic in Government

Governor Paterson's speech on the "perilous" state of the state's finances was woefully short on remedies needed to rein in state spending and cut back on the size of government. As the NY Post points out this morning: "Gov. Paterson yesterday delivered his first State of the State Address - a rightly gloomy report that offered scant grounds to think he's on the correct track to making things right. "The state of our state is perilous," Paterson warned. New York faces its "gravest" challenge "in nearly a century." No argument here. Thing is, Paterson has said this before. And nowhere in his 63-minute speech did he suggest what to do about it."

What the governor did do, was to spend more time lamenting the state of children's waste lines than the waste that needs to be trimmed from the state's budget: "Rather, he rambled on about what he termed an "epidemic" of childhood obesity - scarcely noting that New York's fundamental problem is its scandalously obese government. Even in the best of times, the state spends more than it can afford, and often even more than it collects. But these aren't the best of times."

The NY Daily News agrees: "The governor who stood before the Legislature yesterday was once more steadily forthright about the state's dire straits. But the governor who has so willingly challenged lawmakers to make hard and unavoidable decisions was not in attendance."

Fred Dicker is even harsher in his assessment of the speech's shortcomings: "Gov. Pater son squandered an opportunity to confront New York's fiscal problems yesterday in a rambling, thin and cliché-ridden State of the State Address that failed to recognize that the crisis represents a rare opportunity for sweeping change...But when it came to addressing the root causes of the state's problems - the most expensive health-care system in America, more education spending per pupil than any other state, and a bloated and overpaid local and state government workforce - there was nary a word."

And Dicker criticizes the governor for spending so much time on the obesity issue, something that is tangential at best to what's ailing the state's fiscal situation: "About the only real passion came when he delivered an attack on childhood obesity, a serious problem, but not one at the core of the state's disintegrating economy."

This left an opening for the state senate's former majority leader to weigh in-laying the groundwork for a potential Republican comeback. As the NY Times reports: "Asked if there was anything in the address that concerned him, Mr. Skelos replied, somewhat archly, “I learned an awful lot about child obesity in the governor’s speech.” He also said that Mr. Paterson — who has devoted a majority of his public statements in recent months to the state’s fiscal crisis — had missed an opportunity to “maybe rally the Legislature a little bit more,” as well as the public at large, about the state’s budget problems."

Sp there's a great deal of work that needs to be done; but the open question is whether David Paterson's the right person to lead us in these challenging times. Dicker gets the last word here: "Now that he is gearing up to run for governor on his own next year, Paterson has ditched his pledge to reform government and chosen instead to borrow the warmed-over policies of his mediocre predecessors, who sought to hang on to power no matter the cost to the public, or the damage to New York."

Senate Post Mortems

Spin Cycle has an interesting take on the deal that was struck to elevate the Three Amigos to positions of power that they likely wouldn't have had just two short months ago: "The deal lets Carl Kruger jump into the powerful post of Finance Committee chairman, and makes Pedro Espada head of Housing and Community Development, vice-chair of the powerful Rules Committee and Vice President of the Senate for Urban Policy. Ruben Diaz gets the Committee on Aging. All of them get some of your money as lu-lus. The deal, with minor changes, is the same as the deal Smith backed out of in December. It's an ugly thing to reward disloyalty. And Smith starts out looking like a buffoon -- caving into blackmail, then uncaving and denouncing the deal he had cut, then turning around after a Christmas break and caving in again, cutting the same deal."

So why did Smith accede? "But the simple fact is that the Gang of Three had leverage, Smith wasn't going to get his heart's desire unless he paid them off, so he did -- with the full consent of his conference. It's a tacky beginning that doesn't suggest we're in for an era of high-minded governance -- but it's not like Joe Bruno and Dean Skelos offered that either."

But Smith also announced some reforms-with more promised to follow that should hopefully divert attention away from all of the sausage making. As the Politicker tells us: "Smith also pledged several rules reforms, including measures that would record votes to discharge bills from committees and that pertain to amendments on the floor will be recorded (they are not currently under a rule known as 'canvass of agreement'). More rules reforms were promised, and will be announced in two months after a commission studying the chamber makes recommendations, Smith spokesman Austin Shafran said."

Someone asked us whether Smith would be a weaker leader than Joe Bruno was; which we believe is an unfair question. If Malcolm truly believes in reform-and goes about implementing it-he will not wield the kind of autocratic authority that Bruno was famous for. In this new age a more skillful bargaining style of leadership will be needed-one built on consensus rather than the sheer weight of partisanship. The ability to develop this style will determine whether Malcolm Smith will ultimately prove to be a successful leader.

Healthy Economic Development

Speaking of supermarket development-and the mayor's nonfeasance in this area-it was refreshing to see that Governor Paterson elevated this issue in his outline of of this health issue. As he said in his SoS mnessage: "Our five-point plan includes the Healthy Food/Healthy Communities Initiative, which offers a new revolving loan fund that will increase the number of healthy food markets in underserved communities."

And, as the UFCW Local 1500 wrote in a press release issued after the speech:

"United Food and Commercial Workers Union Local 1500, New York State's and New York City’s largest Labor Union representing supermarket workers, applauded Governor David Patterson today for his announcement in the State of State of a Healthy Food/Healthy Communities Initiative. Such an initiative includes $10 million dollars for revolving loans to food markets interested in locating in “underserved” communities.“Today Governor David Patterson showed that New York State is prepared to get serious about the health and economic consequences of our disappearing Supermarkets,” stated Bruce W. Both, President of United Food Commercial Workers Union Local 1500. President Both also serves as a member of the Governor’s Council on Food Policy and the New York City Supermarket Commission."

Now the logistics of this fund need to be worked out, and the locating of sites is crucial here as well, but this is clearly moving in a positive direction; supermarket development is both an economic as well as a health concern: "UFCW Local 1500 has spent the last 2 years working with State, County and City officials on the growing problem of disappearing supermarkets and its affect on the health and economies of communities. New York City’s own Department of City Planning conducted a report that concluded that New York City alone is need of over 100 full service Supermarkets.“When responsible supermarkets owners/operators open in communities, they bring excellent wages, healthcare and an improved standard of living. The community also gets access to healthy food, a greater number of products available, as well as the type of competition that forces reasonable pricing and improved product quality," said President Both."

Now if we can only get the city and state to work together on this, we might begin to see some headway-with zoning restrictions needing to be lifted so that certain sites can be developed in a reasonable manner. We're hopeful that the city council will jump on this so that economic and land use barriers can be lifted, and more supermarkets built.

The Bare Luxuries

In what looks a lot like a kind of death bed conversion, the Bloombergistas are apparently giving up the luxury box at Yankee Stadium that they had worked so hard to obtain. As the NY Times reported: "After intense criticism, the Bloomberg administration has given up a perk it worked fervently to secure: a free luxury suite at the new Yankee Stadium. The city will relinquish use of the 12-seat box in exchange for whatever revenue the Yankees generate by selling the seats, minus the cost of marketing them. Although neither the city nor the Yankees have publicly disclosed the market value of the suite, similar suites at the new stadium are being sold for as much as $600,000 a year."

Why such righteousness at this late date? Could it have something to do with next week's bond vote? Here's Richard Brodsky's take: "Assemblyman Richard L. Brodsky, who had sought details about the deals the city was making, described the city’s about-face over its use of the suites as “a terrible embarrassment.” “The taxpayers who are paying for the construction of Yankee Stadium cannot afford to buy tickets for the games, but the mayor was getting a luxury box, so he had to back off,” he said in an interview on Tuesday. “But the reason he backed off,” Mr. Brodsky speculated, “is because next week, the city is going to give the Yankees more taxpayer money.”

As we have opined, the Yankee deal symbolizes just how cozy the Bloomberg chazas are with all manner of big development; and we are still awaiting the announcement of the first new supermarket constructed with funds set aside for that purpose by an administration that believes we desperately need more markets for the sake of the public health. As we say in New York, however: "Don't hold your breathe."

Bloomberg has egregiously neglected neighborhood business-and any business that is a bit too distanced from the city's financial epicenter. If the mayor wasn't as wealthy as he is, there would be charges a foot about how cozy he was with Big Real Estate; but folks are disabused by his wealth in such a way that they are blinded to how his class-oriented world view dictates his policy choices.

The stadium deal, midwifed by Carrion, Baez and the rest of the Bronx gang, stands as a clear symbol of the mayor's myopic mindset. So much so that the Crain's Insider is reporting that Comptroller Thompson may use it in his electoral challenge. As Crain's tells us: "City Comptroller Bill Thompson could join Assemblyman Richard Brodsky’s war against subsidies for the city’s new baseball stadiums. Brodsky’s latest battle is to stop the city Industrial Development Agency from approving another $454 million in tax-free financing for Yankee Stadium and Citi Field on Jan. 16, the morning after a public hearing. Brodsky wants a delay in the IDA vote and has demanded all of the relevant paperwork and e-mails."

And, as Crain's goes on to point out, the issue could be a sensitive one during the current economic downturn: "Thompson could use the issue to portray Bloomberg as too generous with taxpayer money at a time when city revenues were plunging, taxes were increasing and services were being cut. The comptroller could bolster his image as a fiscal watchdog, too."

The real hero in this fight has been our old friend Battina Damiani, who told the Times: “Does the Bloomberg administration really think that giving up a suite at Yankee Stadium is going to soften the blow that this project has had on city taxpayers?” said Bettina Damiani, director of Good Jobs New York, a civic organization that has closely scrutinized projects subsidized by the city, including the new baseball stadiums."

The city's response, however, is priceless: "Andrew Brent, a spokesman for the mayor, said, “Other cities get boxes and through our negotiations we made sure New York got no less, but we’ve decided to take the value in cash payments to return it to the community.” Now if they could only return Mullaly Park to the community as easily as they talk out of both sides of their mouths..

Fatheads

According to Liz B, the governor has some serious allies for the implementation of his fat tax: "While they may vehemently oppose Gov. David Paterson's proposed health care budget cuts, 1199-SEIU and the Greater New York Hospital Association are supportive of his so-called "fat tax" on sugary drinks and his plan to boost existing taxes on some alcoholic beverages. In fact, the health care workers union and its hospital partners would like to see Paterson go even further by opting for an excise tax of one cent per ounce rather than a sales tax on sugar-sweetened drinks and applying the proposed increase of taxes on beer and wine to all kinds of booze."

But the coalition in question by going even further, sets up an almost confiscatory tax environment. As Capitol Confidential tells us: "But instead of a sales tax, the group is looking to impose an excise tax that would tax by weight - a penny-per-ounce. So that Double Gulp, which is a whopping 64 ounces (2 liters), would see a 64-cent tax. (In case you were wondering, a super big gulp is 44 ounces, a big gulp is 32, and a gulp is 20 - yes, I looked it up.)"

So, let's get this straight. In order to fund an already bloated-and underutilized-hospital system, these folks want to further tax New Yorkers, and damage city and state business in the process. And the system is not only bloated, it's also rife with fraud. As the NY Post reported yesterday: "Two hospital workers helped uncover an alleged Medicaid drug-treatment scam that prosecutors say has cheated taxpayers out of $50 million, The Post has learned."

And the paper followed up with the following editorial that is extremely relevant to this discussion: "With the state facing whopping budget shortfalls, cracking down on Medicaid fraud seems more vital than ever. But closing underused facilities - eliminating their "need" to engage in fraud and sleazy "patient"-recruitment - should also be at the top of the to-do list."

Which is exactly what the SEIU and GNYHA want to prevent-with millions of additional tax payers dollars being used to cover up this glaring problem. Here's the statement (via Liz) from the tax gougers: "These soda and alcohol taxes can be important elements of a larger, comprehensive effort to ensure shared sacrifice in closing this budget deficit. With a "5-5-5" plan, we can reduce New York's $15 billion budget deficit via $5 billion in increased federal funding, $5 billion in various state taxes, and $5 billion in other State actions, including equitable spending cuts spread across all sectors," the union and the hospital association said in a joint statement issued earlier today"

The reality is that Medicaid spending-both actual and fraudulent-is one of the big reasons NYS is in such a fiscal dilemma. We need to focus heavily on this sector; and not engage in diversionary, "...spending cuts spread across all sectors..." that camouflage where are real budget problems lie.

It's a Done Deal

After two months of acrimony and uncertainty, the Democrats finally put it all together and took control of the state senate. As Liz B reported last night: "The Senate leadership deal is officially done, and Queens Democrat Malcolm Smith has finally landed the 32 votes he needs to be majority leader of the Senate, putting the chamber back into Democratic hands for the first time in 43 years. Flanked by members of his conference - including all of the Gang of Three - who marched from Sen. Carl Kruger's office in the LOB to the Capitol to join their fellow Democrats, Smith announced his victory."

Here's how the NY Times described the deal to bring the dissidents into the fold: "Under the new deal, Mr. Smith will be both president and majority leader. While Mr. Kruger will become finance chairman, the committee will not get special autonomy, as had been previously envisioned. Mr. Espada will be vice president of the Senate for Urban Policy and chairman of the Housing Construction and Community Development Committee. Mr. Díaz will lead the Senate’s Aging Committee."

In our-quite unbiased-view, the ability of the Three Amigos to hang together and negotiate positions of responsibility and influence has been quite remarkable. In particular, our good friend Carl Kruger demonstrated a steely will and perseverance that helped to hold the amigos together. Both Espada and Diaz also showed that they could hang together and stay as a team in order to achieve a common goal. Espada, who has been cited as a bit of a wild card, proved to be disciplined and wily in his ability to keep both sides unbalanced to the advantage of the dissidents.

And in the end, three senators who on November 4th could have expected to get gornish and bubkis from Smith, came away with some serious clout and influence; with Kruger negotiating a vastly greater authority for the finance committee that he will chair-we're not sure what the Times means on autonomy, but the new finance committee will have its own $5.9 million budget; something that was negotiated the first time around.

As far as the issue of gay marriage is concerned, there was some uncertainty; but everyone realizes that the 32 votes to pass the measure simply doesn't exist. As the Times points out: "The issue of same-sex marriage was not a sticking point in the discussions among Democrats on Tuesday, several senators said. In fact, it may be moot for the near future.Though it does not appear that a bill to legalize marriage of gay men and of lesbian couples will be voted on anytime soon, it will not be because of any bargain, senators said. With several Democratic senators opposed to same-sex marriage, there are not presently enough votes to get a bill through the Senate. “There are still five or six votes against the bill in the Democratic conference,” said Senator Jeffrey D. Klein, who represents parts of Bronx and Westchester County. He insisted that same-sex marriage was not discussed at all among Democrats on Tuesday. “And I certainly don’t know five or six Republicans who are going to vote for it,” Mr. Klein added. “Everybody understands that.”

Now what remains to be seen is how the newly arranged governance structure will work in practice. As Liz pointed out: "Chief among the rules reforms is the end to the "canvass of agreement," which means votes on motions to discharge bills from committee will now be recorded and no longer done by voice vote. Also, members of either party will have an expanded ability to bring bills out of committee to the floor and both minority and majority members will be able to sponsor and co-sponsor bills."

All of which is a good step for reform; and this new approach will be sorely tested in the difficult budget negotiations ahead. But it is the so-called Gang of Three that emerged last might-along with Malcolm Smith-as the big winners; just when many pundits had counted them down for the count.

Is it Soup Yet?

Both Capitol Confidential and Daily Politics are reporting about the deal that is cooking between the three amigos and Malcolm Smith. As CC tells us: "This, of course, comes with the disclaimer that nothing is really finalized until there’s a vote, but here’s what we’re hearing about the deal between Senate Democratic Leader Malcolm Smith and the so-called “Gang of Three.” The “Gang” and Smith have come to a deal and now the Senate leader is reaching out to conference members individually to talk them through the finer points. The Senate Dems are expected to approve the deal tonight at their closed-door conference in Albany. An announcement is expected this evening to the public."

Who gets what is now the question, with CC saying the following about Kruger: "Sen. Carl Kruger is expected to become chair of the Finance Committee, but not the souped-up committee he was offered before by Smith. He won’t get the $6 million budget or separate staff, according to two Senate Democratic sources."

Liz, however, disagrees: "As predicted, many elements of the original deal have been preserved. But, things are very tenuous at the moment. Already there's some discrepancy over what, exactly Kruger has been promised. Senate Democratic sources tell CapConf that Kruger will indeed get to chair the Finance Committee, but it won't be the independent and extra-powerful body that was offered to him in the first go-round of negotiations. However, the source close to Kruger refutes that, insisting that the Finance Committee will indeed have a $6 million budget and staff."

The real wild card has been the role carved out for Pedro Espada-since his majority leader status caused the most contention. It now appears that Pedro may be an even bigger winner: "Espada will not become majority leader, as was proposed in the first incarnation of the deal. But he will get get to chair the Housing Committee, become vice chair of the powerful Rules Committee and also will head a task force on Urban Policy which will have a staff and a budget." Substance traded for symbolism, it seems to us.

The issue of same sex marriage is being dealt with sotto voce according to DP: "The same-sex marriage question, which Diaz has heretofore made a make-or-break requirement of his support of a leader, appears to be unanswered for the moment. The reality is that Smith simply doesn't have the votes necessary to bring pass it and so there's no reason for him to bring it to the floor. Once he has the votes, he might no longer need Diaz's support to retain his leadership post."

But all of this, of course, is contingent on Smith's ability to herd the Democratic cats, something that he appears better situated to do than he was a month ago: "Details of the deal between Democratic Leader Malcolm Smith and the Gang of Three are starting to leak out even though both sides having been trying to keep things quiet, fearing a repeat of the implosion that occurred in the wake of the last agreement almost a month ago. The Democratic conference has not yet codified this deal and is scheduled to meet at 6 p.m. tonight. But there is so far none of the internal grumbling that led to the death of last month's power-sharing pact between Smith and the gang."

The deadline for all of this is six o'clock tonight; and, as Liz reminds us: "A source close to the Gang of Three ringleader, Sen. Carl Kruger, cautioned that this isn't yet a completely done deal, saying: "You'll know it's done when these three walk into the conference tonight."

Hammond's Albany Reformation

The NY Daily News' Bill Hammond unveils his own legislative reform ideas in this morning's paper-and seeks an almost total transvaluation of Albany's past legislative practices: "In his quest to become majority leader of the state Senate, Queens Democrat Malcolm Smith is talking to the wrong people. He should tell the renegade Democrats known as the "three amigos" - who have been shaking him down in exchange for their support - to take a hike. Instead, he'd be better off reaching out to his "enemigos," the 29 Republicans on the other side of the aisle. He should invite open-minded GOP senators to join Democrats in running the Senate in truly bipartisan fashion, as co-equal partners in a small-d democratic legislative process."

Whatever the moral arguments in favor of this approach-and how oxymoronic is that conception?-it would leave the Democratic majority in a much more weakened state than any deal with the three amigos could ever do: "This would mean breaking with generations of bitterly partisan tradition in Albany. It would mean angering many fellow Democrats - who have suffered under the thumb of Republican majorities for more than four decades and would desperately like to return the favor."

Does Hammond think that Malcolm's Democratic colleagues would support this surrender of power any more than they did when he crafted the first deal with the amigos? That being said, and as we have pointed out, there is still plenty of opportunities for reform-short of simply giving away the store; and Hammond hits on a number of the possibilities: "And the committee system - which is the lifeblood of real legislatures, like the U.S. Congress - should be revitalized and given the independence and authority to truly debate and shape legislation. Committee memberships should reflect the overall breakdown of the Senate, with Democrats holding only a slight majority. Rules should be changed to make it easier for bipartisan coalitions to force public debates and votes on controversial bills."

There is, however, still a place for partisanship-and elections do have consequences. And there really isn't any need for Smith to hand over the reins to the other side; especially when bipartisan negotiation will be the rule rather than the exception. This doesn't have to be engineered when it will emerge organically: "...Smith cannot live by Democratic votes alone. He cannot rely on all 32 of his party members' votes when a tough issue comes to the floor - and there will be many, starting with how to close the unprecedented $15 billion hole in the state budget."

With leadership comes responsibility, and in 2010 voters will be asked to judge how well the legislature responded to the fiscal crisis. If Smith is given the reins, he and his Democratic colleagues will be judged on the results-even if there is a greater degree of bipartisan cooperation. As a result, it behooves Smith and his fellow Dems to govern responsibly, and to give the voters of New York a reason to return them to power in two years.

Wheeling and Dealing

According to the NY Daily News, senate Democrats may be closing in on a leadership deal: "Senate Democrats appeared on the verge of a last-minute deal Monday night that could avoid chaos when lawmakers go back in session Tuesday. Sources said Senate Democratic leader Malcolm Smith and three dissident Dems were close to an agreement that would give Smith the 32 votes he needs to become majority leader."

Whether this is the case, however, depends upon the ability of Senator Smith to bring it all home with the conference he leads: "Smith's members were expected to be asked to sign off on the deal during a closed-door Democratic conference." Remember that the original deal apparently was too much for Smith's colleagues to swallow.

Will whatever is currently on the table be different enough to allow for Smith to ascend with the support of 32 senators? This is the question that remains unanswered this morning-even while unsubstantiated rumors surrounding the new parameters emerge from behind the scenes: "One source said that Sen. Carl Kruger, a Brooklyn Democrat and a leader of the rebel Democrats, would become chairman of the powerful Finance Committee, and Sen. Ruben Diaz Sr., a Bronx Democrat and another so-called Gang of Three member, would become chairman of the Aging Committee. Bronx Democrat Sen. Pedro Espada Jr., who under a previous deal that fell apart was to become majority leader, would receive an "influential policy position," sources said. "Espada will come out the most senior and influential Hispanic in state government," one source said of the Bronx Democrat."

Other sources deny that the three amigos will have the same kind of influence that they appeared to have negotiated previously: "Unlike the previously aborted deal, the positions of president pro tempore and majority leader will not be decoupled. Smith (D-Queens) will hold both titles. Also, Kruger's Finance Committee will not get a separately funded staff, a source said. Another source said the Gang of Three will get the titles they seek, but will have no power over the legislative agenda."

So we can see that there is still a great deal of uncertainty here, with little time left before the opening of tomorrow's session: "Absent a leadership deal, the state Senate could have trouble opening for business. Because the state has no lieutenant governor - who traditionally presides over the Senate - Republicans and Democrats were squabbling yesterday over who should wield the gavel."

Something should get done, but past experience gives us pause-and Democrats are rather expert at creating chaos out of order. Tonight's Democratic conference will be all telling on this two month controversy.

Reform on the Way?

According to the Politicker, this might be the best year to achieve legislative reform in the state senate: "A coalition of good-government advocates are making the case for "yes," and today released an update to a 2004 report by N.Y.U.'s Brennan Center which details New York's legislative dysfunction. The new report lists concrete recommendations like evening out funding given to legislators--regardless of party--and empowering the chairs of legislative committees to hire their own staff and move bills to the floor. There is also a new recommendation for more substantive notes on the fiscal impacts of bills."

These are all meritorious ideas, and have been endorsed by putative majority leader Malcolm Smith; lost in the hubbub, of course, is the fact that many of these reforms were advanced by the three amigos at the time when their original deal was proffered. It remains to be seen whether the reforms remain as an essential component of a new Democratic majority-should that occur in the next couple of days.

Much of this was taken up in an interesting Op-ed by Jeremy Creelan in last week's NY Daily News. Creelan's idea of reform may be a bit far out for most legislators; and it appears that he wants to eschew partisan politics from the legislature-something that would, in our view, cause more harm than it would create better governance:

"Imagine if, instead of focusing on ensuring that Democrats will control the majority leader position so they can run the Senate like the dysfunctional autocracy it has been for so long, Gov. Paterson and Senate Democrats now chose a different path. Namely, give the entire Senate a choice of leaders - without regard to political party - and dramatically reduce the powers of the majority leader to control which bills are drafted and voted on by the full Senate. Allow the full Senate to select committee chairmen based on their experience and expertise, rather than their party and their relations with the majority leader. Allow minority party members (in this case Republicans), as well as the whole Senate, to force bills out of committee and onto the floor for a vote."

Envisioning a meritocratic utopia is fine for the arm chair theorists; but would devolve quickly into a rudderless morass, as political interests soon came to undermine the road to good intentions. That being said, empowering the chairs of committees makes a great deal of sense; and actually having public hearings is long overdue as well.

In this morning's NY Times, the paper editorializes in favor of reform: "As the Brennan analysts noted this year, legislative leaders, especially Assembly Speaker Sheldon Silver, have had “a stranglehold on the flow of legislation at all stages of the legislative process.” Most members have little say. Committees are run like shadow puppet theaters. Details about legislation are hard for the public to get, unless they subscribe to a bill-drafting service for $2,250 a year."

But, according to the Times, Malcolm Smith and the Senate Dems can change this situation: "Two years ago in the last vote on legislative rule changes, Mr. Smith sponsored comprehensive reform similar to the Brennan Center’s excellent ideas. The changes, which were rejected by the Republicans in the majority, would have strengthened committees, requiring lawmakers to be physically present to vote. Recently senators could fax in their yeas or nays to the committee chairman. The proposal would have required tons of transparency and made it easier for bills to come to the floor for debate instead of the usual automatic passage."

The NY Post's Fred Dicker is typically more colorful-but hits on the same theme: "ALBANY POLS STILL SUCK." Citing the Brennan Center report: "NYU Law School's Brennan Center for Justice said virtually nothing had changed since it blasted the Legislature's notorious secrecy, lack of democracy, and strong-arm leadership - despite politicians' repeated promises that things would get better."

Our advice? Take it a few small steps at a time; because, as we've seen already in Washington, stentorian cries for global change tend to flounder on the more tawdry realities of mundane political considerations. Incrementalism should be the watchword of Albany change, especially since the close nature of the partisan split will force a great deal more bipartisan cooperation; but, if done right, a measure of real good can be achieved in the upcoming session.

Let the Record Show

Nicole Gelinas continues her excellent work critiquing the Bloomberg mythos. In the NY Post this morning, she outlines the way in which our chief fiscal maven has dug us into a deep hole-precisely because of his lack of expertise and his ideological blinders: "Consider what state Comptroller Tom DiNapoli reported just before the holidays: If you take out the effects of big surpluses leftover from Wall Street's boom years, New York City will spend $4.3 billion more than it will take in this fiscal year - a whopping 10 percent of city-funded revenues."

How did this happen? Well, under the mayor's watch, thing's have gotten much worse-with the mayor adopting an Alfred E. Neuman, "What me worry," persona: "It's almost jaw-dropping that the mayor, faced with these projections and with no hope of a return to a bubble-era "normal" on Wall Street, has made things worse. City workers' salary growth, for example, is set to rise 13 percent between now and our drop-dead year - largely because the mayor late last year voluntarily entered into labor contracts granting hefty raises to both civilian and uniformed workers. The cost of higher pay adds nearly $1.7 billion to the drop-dead-year deficit. Plus, the city-funded workforce has grown by more than 12,000 people in the last three years - so even the 4,556 job cuts that Bloomberg projects won't bring us back to 2005."

This is the guy whose expertise is needed for another term? Give us a break! And take a look at the DOE: "Instead, the mayor must make outsized cuts in education spending, whose city-funded budget has ballooned at nearly 10 percent every single year since Bloomberg took office - without commensurate results in achievement. Unfortunately, much of that increased spending came in the form of contractually guaranteed, six-figure teacher salaries - so cuts must come from staffing, instead. So, for now, Bloomberg should take the time to ensure that these cuts cause the least possible harm to students."

We're waiting, as we've pointed out time and again, for all of the editorialists who are bleating about the necessity of mayoral control, to examine the mayor's real record in this area-the gap between increased expenditures (cost), and better student outcomes (benefit). The issue isn't mayoral control, it's the failure of Mike Bloomberg to effectively deliver on his mandate.

As he has in so many other ways. We desperately need new leadership at City Hall-on both sides of the building. In the kind of crisis we're facing political sclerosis needs to be excised and fresh thinking introduced; other wise we will be condemned to repeat the mistakes that have got us into this fiscal mess in the first place.

Coming Down to the High Wire

As Liz Benjamin reports in this morning's NY Daily News, Malcolm Smith met with dissident senate Democrats in an eleventh hour attempt to craft a final deal so that he could assume the body's leadership post on Wednesday: "There's 72 hours left, and still no deal in Albany.
Both sides in the battle over who will control the Democrat-led Senate stepped up the pressure Sunday in the hope of ending the stalemate before Wednesday's vote. Senate Democratic leader Malcolm Smith - heir apparent to the leadership spot - met face-to-face with the so-called Gang of Three on Sunday night in the Bronx. It was his first meeting with the renegade Democratic trio since a power-sharing deal brokered by Gov. Paterson imploded and imperiled Smith's standing with his fellow Dems."

Whatever the terms of any agreement might turn out to be, what is most precious in these final stages is the issue of trust: "The highly public death of the deal created a significant "trust issue" between Smith and the three senators - Ruben Diaz Sr., Pedro Espada Jr. and Carl Kruger - that Smith has yet to resolve, a Gang of Three source said. "No one has a great deal of faith in [Smith] until this check clears," said the source. "They've been down this road before. The old Clint Eastwood line comes to mind about your mouth writing checks your body can't cash. They're prepared to bury him if that's the case."

Still, it appears as if the three amigos are more eager to side with their Democratic colleagues, if they can get Smith to collateralize any agreement with the support of his conference-the same folks who abandoned him kicking and screaming last month. And, as Benjamin avers, it remains true that the three hold outs hold the cards for any leadership end game: "Neither Skelos nor Smith can succeed without the votes of Espada, Diaz and Kruger as long as all the other senators remain loyal to their respective parties. The gang seemed content yesterday to let negotiations go down to the wire. "There is no decision yet," Diaz told the Daily News. "The people will know on Jan. 7."

The exact nature of any agreement is yet to be determined, but what is clear is that the three will have to be satisfied if Smith is to be elevated; and, as of yesterday, it appeared that this was a possibility: "The now dead Paterson-brokered deal would have made Espada majority leader, Kruger head of a souped-up Finance Committee and Diaz chairman of the Aging Committee. A Democratic source said key elements of that deal remain in play. "They will get marginally less, but not substantially less, than they were first offered," the source said. "What has to happen here is the Gang of Three has to blink a little bit, but not too much."

There is a good chance that all of this will be resolved today-although it's unlikely that anything will be announced, since public displays of affection have a tendency to backfire before anything is finalized officially: "The Senate Democrats were slated to meet Saturday but scrapped that plan because there was no deal. They will now meet in Albany tomorrow night, as will the Republicans. Sen. Martin Golden, a Brooklyn Republican, predicted the leadership fight will be over by tomorrow. He insisted there would be no significant disturbance in the Senate regardless of the outcome. "It has the potential of going in either direction, and I think it gets done very quickly because it's starting to get old," Golden said."

If Smith is able, however, to convince the three amigos that any agreement reached is solid, there is a chance that the insurrection will be over-and that Democrats will control all three branches of state government. Today should bring clarity-and perhaps finality-to this entire episode in gamesmanship.

Taxing (is the) the PITS

The NYS Comptroller-Select, Tom DiNapoli, is warning us that taxing so-called millionaires may well be unavoidable-but he warns that it shouldn't be anything but a last resort. As the NY Daily News reported yesterday: "State Controller Thomas DiNapoli said a millionaire's tax may be necessary to solve New York's budget crisis but should only be used as a last resort. In an interview with the Daily News, DiNapoli said a recession is not the best time to add to the state's tax burden. He called for state lawmakers to make "tough decisions" to curb state spending before considering a tax on the wealthy. "To start out there would not be the smart way to go," DiNapoli said of the millionaire's tax."

We agree with DiNapoli, but we've yet to see the kind of state spending curbs proffered that could be seen as a significant response to the fiscal mess that we're in. All of the WFP and DMI wailing about "shared sacrifice," must be put into the proper context. The advocates who want to add more taxes in a recession should be, instead, the very folks scouring the nooks and crannies of state government in an effort to expose the waste that is certainly there.

If they feel that certain services are indeed "vital," than it is incumbent on them to expose the less than vital government waste of the tax payers' money. Instead, they knee jerk on the more tax mantra; but it shouldn't just be business interests and conservative scholars on the reduce government spending band wagon. DiNapoli needs to be heeded by all of the decision makers and interest groups.

Bloomberg the Shtarker

We have always been rather less than kind to Mike Bloomberg-but his statements on Hamas reveal real moral clarity. As Liz B points out, the mayor was steadfast in his view of the situation: "Israel has been attacked by Hamas since 2005 when the Israelis pulled out of Gaza, and I think I speak for an awful lot of - almost all - Americans who think that Israel is doing the right thing in defending itself. It has a responsibility to defend the citizens. President Bush has said that and President-Elect Obama has said exactly the same thing."

We just came back from seeing Defiance, and nothing has changed in our view: If Jews aren't able to defend themselves, no one else is going to step up on their behalf. When it appeared as if the Arab armies were going to overrun Israel in June of 1967, the whole world wept with sympathy; but all were quickly made uncomfortable by the military success of Jews fighting back successfully.

As far as we're concerned, the entire Palestinian dispossessed meme is totally out of synch with any reality on the ground-the suffering in Gaza is Hamas' doing, and it would be nice if all of the hand wringers for the poor Gazans would take a real close look at just who Hamas is; and what it represents. AS Blomberg told the NY Times: "Asked about the suffering of the Palestinians in Gaza, Mr. Bloomberg replied sharply: “That they are putting people at risk is an outrage. If Hamas would focus on building a country instead of trying to destroy another one, then those people would not be getting injured or killed.”

Nondisclosure

Caroline Kennedy, who has lived in privilege all of her life, apparently worked at the city DOE under rules that were applicable to no one else. As the NY Times reported yesterday: "Like it or not, roughly 7,000 employees of New York City file 32-page disclosure forms each year divulging personal information about their family finances in an effort to bolster confidence in open government. But when Caroline Kennedy was employed by the city Department of Education from 2002 to 2004, as the chief executive of the Office of Strategic Partnerships, she was not required to file, even though two people who worked for her had to disclose information about their finances."

And so now, it is hardly shocking that she would seek a US Senate spot by designation, instead of holding herself out to the voters sometimes harsh scrutiny. In defending her exemption from the city's disclosure rules, the Princess wants to have it both ways: "City officials have offered a variety of explanations over the last few weeks why Ms. Kennedy did not have to meet this filing requirement despite her title and the responsibilities she has cited in her efforts to convince the public that she has the experience to take Hillary Rodham Clinton’s seat in the Senate. City officials have most often pointed to Ms. Kennedy’s decision to accept $1-a-year in salary. More recently, Joel I. Klein, chancellor of New York’s schools, explained that she was ultimately exempt from the requirement because the department did not deem her to be a “policymaker.”

If her work was significant, than she should have been subject to the same rules that apply to others less regal: "Until 2004, public servants were generally required to file disclosure forms if they were officers or directors of agencies or if their salaries indicated high-level responsibility. That year, the city was able to shrink the rolls of those required to file by scrapping the salary test, and instead declaring that anyone holding a policymaking position had to file, regardless of income."

So what will it be? Was Caroline merely a meaningless volunteer, whose job was little more than society busy work? Or was she a real policy maker-in which case she should have been disclosing her resources just as even the billionaire mayor must do. In our view, the DOE''s decision to exempt Kennedy was the right one-it accurately reflected her role; and to aggrandize it ex post fact simply doesn't pass anyone's smell test.

Let Kennedy run on her own merits in 2010. Whoever Governor Paterson selects will be a short termer, and the Kennedy mystique will be a formidable factor in any Democratic primary. Our view is that CK is much like Gertrude Stein's Oakland: "There's not much there, there."

Budget Face-off

This budget season is bound to be acrimonious-with a huge deficit this year to be followed by an even larger one in 2010. Exacerbating the problem is the fact that the narrow majority held by the Democrats in the state senate will mean that all of the body's decisions on budget matters will be guided by each party's political needs. As the Democrat and Chronicle points out (via the Politicker): "The 2010 elections are especially crucial because the power to redraw legislative district lines for themselves and the state's members of Congress will lie with the majority party in both houses. Republicans will want to use the budget crisis to gain election victory, while Democrats won't want to alienate their strongest supporters, traditionally organized labor, including the powerful teachers' union, which provide valuable help during election time..."

And then there are the various interest groups-each special in its own way: "Raise taxes on the rich. Reduce Medicaid reimbursement rates. Shrink state Legislature staffs. Eliminate school aid to the wealthiest districts. Get rid of pork barrel spending. Ideas on how to close New York state's budget gap, estimated at $15.4 billion by 2010 if taxing and spending continue on their current course, come from labor unions, budget watchdogs, business boosters, upstate county executives and other special interests."

What does this mean in the state senate, where a 32-30 split will militate against boss rule? The Journal News offers some clues: "With Democrats potentially poised to take over the Senate next week, the power and influence of GOP senators from the mid-Hudson Valley could be reduced after decades of being in the majority. Republican senators this week were quick to point out that the Senate leadership issue remains unresolved. Even if the Democrats take control for the first time since 1965, the state's fiscal crisis and the small margin either party will hold ultimately will reduce the strength of a Democratic- or Republican-controlled Senate, they said."

Bipartisanship will have to be the rule, and not the exception: "Because the numbers are so brutally close, we have to work together," said Sen. Vincent Leibell, R-Patterson, chairman of the Senate Veterans, Homeland Security and Military Affairs Committee. Leibell, whose district covers all of Putnam County and parts of Dutchess and Westchester counties, said he didn't know who would end up with the majority. "If I'm in the majority, I'm looking forward to working with my Democrat colleagues. If I'm in the minority, I'm still looking forward to working with my Democrat colleagues," he said."

Lee Miringhoff captures the essence of the situation: ""Because it's so close, their votes will be sought because there's no guarantee by any means that there's going to be uniform Democratic support on any one issue," he said." In this potentially chaotic cauldron, throw in the Smith pledge-should he become leader-to implement the Brennan reform platform. If the body becomes more democratized, will reform be as welcome in practice as it is in theory? Who can predict what will happen in these uncharted waters? But first, Smith needs to get his own conference in order.

Bottle Bill Showdown

As we approach the new legislative session, all of those interested in the fate of the "Bigger, Better, Bottle Bill," should be prepared for a bruising battle. The enviros certainly are: "The commissioner of the state Office of Parks, Recreation and Historic Preservation has urged support for the “bigger, better bottle bill,” maintaining it would have positive benefits in the Buffalo Niagara region. “Updating our state’s bottle bill law to include noncarbonated beverage containers will help us achieve two important goals: make our communities cleaner and generate necessary funding to help support our parks,” Commissioner Carol Ash said in a written statement."

And while the expanded bottle deposit law has previously passed in the assembly, it has always had rough sledding in the state senate. However, with the Democrats perhaps usurping control, the battle in the senate is going to get very contentious; and it's hard to predict the outcome. Both sides need 32 votes-assuming that there is no leadership hold on the measure, something that was commonplace when Joe Bruno ruled the roost.

We have already outlined our opposition to the measure, but one point needs continued emphasis: If we're looking to increase the number of supermarkets-particularly in low income areas-we need to reduce overhead, and not add to the cost of doing business, something that an expanded bottle bill absolutely will do. The food retail business, at all levels, has been an incubator for minority business growth; over half the supermarkets in the city are minority-owned. But because of escalating costs, the NY Times has shown that many of these operators are being driven out of the city-and are opening stores in lower taxed and less challenged regulatory environments.

Everything else is white noise as far as we're concerned. But retailers, bottlers and beer distributors better be getting ready for this. Supporters of an expanded bill-something that has a fiscal implication as well-are really reved up for this fight; don't be bringing any knives to this gun fight if you're gonna hope to prevail.

State Senate's 11th Hour

As the day's dwindle down to the first legislative session of the new year, the state senate is still without a leader; and while staffers from the old majority continue to bail, everything else remains in limbo-which doesn't give the new leader any real time to ramp up and deal with the fiscal crisis. As the TU points out: "If Smith wins the leadership vote on Jan. 7, his administration will need time to ramp up its staff. Under ordinary circumstances, Smith would have had three months to prepare. That means Smith, if he becomes majority leader, will have to lead and make serious budget decisions within a truncated transition period. But he'll be in good company: Paterson had a five-day transition period before he became governors last March."

But Smith does need to get cracking, and the pressure tactics of his allies isn't working that well. As the Politicker tells us, at least one of the dissidents is immune to pressure: "The ring-leader of the so-called "gang of three" has spent a quiet holiday season, people close to him say, and as his fellow renegades have been blasted by mail, canvasser and YouTube, no one has gone after Kruger. He even passed some quality time at Brooklyn scion Vito Lopez's holiday party last night without incident from the scores of party loyalists who came to pay their respects in Bushwick.
"He's kind of hard to get to," said one operative, begrudgingly."

But "getting to" the dissidents is something Smith needs to do-and we hear that there is some backroom discussions being done through intermediaries; but the problem still remains the original deal that Smith agreed to, only to walk away when the uproar ensued. That deal set certain parameters in place and it will be hard to get the three rebels to come along unless the new offer is comparable.

That being said, there are those who don't feel that a leaderless senate is a bad thing; it might even be a "blessing in disguise." In this morning's NY Daily News, Jeremy Creelan argues: "And so, after decades of ironfisted leadership by the likes of Sen. Joe Bruno (R-Rennselaer), the Senate has devolved into a frightening chaos that should concern all of us. Or should it? The truth is, there's hope in the rubble. The state Senate has functioned feebly for decades precisely because the majority leader has controlled everything, leaving the talents and energy of the rest of the senators - and the voters who elected those senators - entirely out of the process."

So, Creelan tells us, all would be better if the senate was totally democratized. Perhaps it would but, forgotten in all of the hubbub over the failure of Smith to live up to the original leadership deal, is the fact that Kruger and the amigos had placed many of the reforms that Creelan supports at the heart of the deal they negotiated. Do you think that part of the reason for the deal's collapse could have been a result of this little discussed part of the package?

In any case, we believe that all of this will soon be coming to a head because leaderlessness isn't acceptable in the current crisis. But Malcolm flunked his leadership pretest; will he flunk the final as well?