Thursday, April 30, 2009

More Red Ink? Pass the Wine Bottle

Just when we thought that the state's finances were somewhat in order, we get the following bad news: "New York state faces massive budget gaps totaling almost $25 billion over the next three years despite a record high new state budget that increased taxes by some $8 billion, Gov. Paterson's budget experts revealed yesterday."

And the NY Times avers: " The state will face a perilous financial situation when federal stimulus money and temporary state tax increases on the wealthy expire two years from now, according to the financial plan released by the governor’s office on Tuesday." So, will this mean that we get some fiscal discipline from our state leaders?

Not if the spinning from the governor is considered. As the Post points out: "This year's budget represented a first step in the difficult process of putting New York back on sound fiscal footing," Paterson said. He and his budget experts contended the budget had increased state operating-funds spending by 0.7 percent, the smallest increase in 14 years. Independent budget experts, however, have noted that state operating funds represent a relatively small portion of the overall budget, which was up more than 30 times the inflation rate."

Bold leadership is going to be needed; especially if the governor is going to try to find some way out of his own mired down position. And the bad fiscal news is right around the corner-as the Times indicates: "Some fiscal pressures are already making themselves felt. Payments submitted with individual tax returns this month were 30 percent lower than those of last April, according to Laura L. Anglin, the governor’s budget director. Payments submitted with requests for an extension were down 50 percent. While some drop-off has already been built into the current budget, more bad news could come on June 15, when individuals must make quarterly tax payments and corporate tax bills come due."

Which should mean that the legislature will have to return-probably in September-in order to find some way to re-balance an out of whack state budget. Which says to us that it will be necessary to seriously revisit the wine in supermarkets question. That $140 million will be looking irresistible pretty soon now.

Schools Out!

As more and more unfiltered information comes out, the notion that mayoral control of the schools-at least in its current incarnation-has some kind of papal infallibility, is less easy to maintain. The latest comes from this morning's NY Times; where a report on high school drop out rates raises some interesting concerns: "Almost six years after a lawsuit forced the city to pledge to keep better track of students who leave public schools without graduating, the number leaving high schools has continued to climb, according to a report to be released Thursday by the public advocate’s office."

What's interesting to us here, is that the DOE dosn't trash and bash the critique: "David Cantor, a spokesman for the City Education Department, said that while the increases were noteworthy, they reflected the fact that the student population often moves in and out of the city. He said the city’s graduation rate, which is affected by the number of students who drop out but not those discharged, has improved steadily over the last six years. For the class of 2008, the projected discharge rate is 19.2 percent, Mr. Cantor said."

Perhaps he's right, but there's no real documentation of the official position, now is there? And let's not forget that the vaunted graduation rates are boosted by the roll reduction: "One of the most alarming trends, according to the report, is the number of ninth-grade students who are discharged. “This finding is of serious concern, as the goal of the public school system is to provide all students with the support needed to persist and successfully graduate from high school,” the report states, adding, “Schools may be responding to accountability incentives to discharge students earlier in their high school careers.” Jennifer Bell-Ellwanger, a senior adviser to the chancellor who oversees research, said department officials had noticed the increase in ninth-grade discharges and were trying to determine its cause."

Curiouser and curiouser, but all of this underscores how important it is to have independent evaluation of the DOE's claims. And let's give credit where it is due; this is one area is where Advocate Gotbaum has really done a public service. And her comments on the report are spot on: "I don’t think anything has gotten any better,” Ms. Gotbaum said Wednesday. “The numbers explaining where these students go is certainly at best questionable and at least a bit wrong. We really don’t understand what all these numbers mean.”

When these figures are combined with the fact that, as Andrew Wolf highlights, the city graduates can't do college work, then the constant ballyhoo over the Bloomberg/Klein regime is seen as sheer hype-as this finding also supports: "According to data provided by the Education Department, roughly 74 percent of the more than 18,000 students discharged from the class of 2007 went to a school outside New York City. But according to the report, there is no evidence in census data to suggest that so many teenagers have left New York in recent years."

So by all means, let's continue to debate the accomplishments of mayoral control-and despite of Malcolm Smith's backtracking, the critical senate report leaked the other day seems more germane than ever. The system needs to be watched; both carefully and independently. How that is done is the devil in the details.

Water Torture Memo

Now that Martha Stark-and her nepotistic payroll-have departed from city government, how about the complete overhaul (should we say dismantling?) of the DEP; where there hasn't been a commissioner named to replace the benighted Emily Lloyd. Here's an agency that also underscores the disconnect between the editorial lionization of Mike Bloomberg's managerial competence, and the harsher reality of oversight failures and political hackdom.

Once again, the DEP is about to sock New Yorkers with a rate hike. As the NY Post reports: "The 14 percent water rate hike on tap this year could be followed by another wallet-crunching 12 percent increase in 2010, officials reported yesterday. That would represent the fourth double-digit boost since 2007 and would propel the annual water bill for typical one-family homeowners past the $1,000 mark for the first time."

What's going on here? Has the agency itself sprung a leak? Here are the comments of Councilman Vacca: "One could say water rates are really out of control," fumed City Councilman Jimmy Vacca (D-Bronx) at a tense City Hall hearing." So what's causing this water logging?

The NY Daily News weighs in on the problem: "A small but angry group of Bronxites charged Tuesday that they're being soaked by the city Water Board. Bronx residents who managed to take time off from work for the afternoon public hearing voiced their opposition to a proposed 14% hike in water rates. "It's ridiculous," said Evelyn Rodriguez, 57. "Don't we pay enough for everything else? Everything goes up, and now they're raising our water. If the measure is approved, this will be the third consecutive year of double-digit rate hikes."

Just another example of why Mike Bloomberg is Mr. Indispensable; after all, no one else could soak the citizens with the same degree of elan-and huff and puff so well that folks are bamboozled over his alleged skillful stewardship of the city. Exhibit #1? The DEP, of course: "Vacca rushed to the Bronx from a hearing at City Hall where City Council members questioned the agency about the rate hikes. "I pointed out savings that the city could make that would mitigate the entire increase," said Vacca. "I pointed out things that they have no answer to." Vacca argued that the DEP has $94 million in a "holding fund" that could be used to offset the rate hikes. He also noted that 12% of the DEP's payroll goes to overtime payments."

Not only that, Jimmy. We still don't have any confidence that these incompetents can accurately gauge anyone's water bill-and the agency is blithely going ahead with planned water shutoffs. To which one commenter at the City Room blog had this to say: "So the city’s record keeping system was atrocious, and now people are being deprived of a basic human need because of it? And at a time when people are losing jobs by the thousands, those who can’t pay a bill are being referred to as “deadbeats”? This is disgusting."

Here's another wise observer's remarks: "When we lived in a single family house in Queens we got a statement of our status on city bills. There was an overdue water bill, so I called to say we’d never gotten it and ask how to pay. The idiot on the other end said “that’s what they all say” and hung up on me. When I called back another person read the address on the bill, which had their office’s zip code instead of ours. She agreed I was a dead beat because, of course, the post office would have figured it out and delivered it to us. My husband had to go in person to straighten it out."

All of which is against the backdrop of the billion dollar amen choir singing, "Four more Years!" Accountability is evanescent when all of the accountants are either on the mayor's dole; or else work over at the DEP.

Wednesday, April 29, 2009

Braking Mayoral Control

The state senate has issued a report on school governance-and despite the efforts of the NY Post to mock its message-the document clearly identifies the inherent defects of the current mayoral regime: "The draft set of recommendations even calls for resurrecting an "independent" Board of Education that would evaluate the schools chancellor and have more "explicit authority" over budget and policy issues than under the mayoral-dominated system. The report stresses the need to create a "countervailing body as a check on the chancellor."

Which sounds a lot like the critique that we have been outlining over the past year; and it is precisely the message that uber-school expert Diane Ravitch laid out earlier this month in the NY Times: "Not every school problem can be solved by changes in governance. But to establish accountability, transparency and the legitimacy that comes with public participation, the Legislature should act promptly to restore public oversight of public education. As we all learned in civics class, checks and balances are vital to democracy."

A view that was reinforced in Monday's NY Daily News by Andrew Wolf: "Mayoral control of the schools can be a good, bad or indifferent enterprise. It could be a fraud like Enron. But the schools belong not to one official, but to the public. The Legislature must reform the law and put the public back into the public schools, so that any control at the top is subject to the oversight of the people. That's just good business."

All of which leads the Bloomberg/Klein team to regurgitate the stale and tiresome straw man arguments. As the Post points out: "Mayor Bloomberg's office slammed the report as a return to a failed past. "This report, which we have been told is a draft, explicitly advocates a return to an unaccountable central policy-making board. That model failed our kids for decades, and we would not support returning to it," said Bloomberg spokeswoman Dawn Walker."

Which begs the question of just how much of an educational breakthrough the current arrangement really is-tendentious rhetoric aside. Senator Martin Dilan, the lead on the report, gets the last word: ""In striving to achieve a system with more accountability, the law that established mayoral control of school governance has created a system in which the mayor and chancellor have unilateral decision-making authority and are answerable to no one," state Sen. Martin Malavé Dilan, co-chair of the Senate Democratic School Governance Task Force, wrote in his draft report to Smith."

Stark Reality

Well, well, now. The ultimate repository of probity and competence-otherwise known as the Bloomberg administration-has been exposed as, at best, an overstated text book case for good government. With the announced resignation of the city's finance commissioner-the Tammany wannabe Martha Stark-the Bloombergistas have some explaining to do: "Bloomberg had asked the city Conflict of Interest Board and Department of Investigation to look into reports that Stark has a personal relationship with Dara Ottley-Brown, a former assistant finance commissioner who now works at the Board of Standards & Appeals. Ottley-Brown left Finance in November 2006. She divorced her husband the following summer, and he was hired just over two months later by the Finance Department as a $78,000-a-year graphic artist. Stark, who unsuccessfully sought to replace former state Comptroller Alan Hevesi in 2007, has been on the hot seat for weeks, and not just related to this relationship."

So now we are to be afraid of the return of the political hacks, because? And Bloomberg, it should be pointed out, took a very long time to distance himself from this ethically challenged appointee: "Bloomberg initially defended Stark in the wake of reports that she had earned more than $134,000 in 2006 and 2007 for serving as the director of Tarragon Corp., a national real estate company. Stark said she had obtained official approval to sit on Tarragon's board, but resigned after the mayor questioned whether the administration had been properly informed."

So, please do tell us, where was the vaunted managerial expertise of the current administration? And remember that when the issue of her lucrative moonlighting was first exposed, Bloomberg had this to say: "The mayor’s remarks were in contrast to those he made a month ago when Ms. Stark, who is in charge of collecting $22 billion in tax revenues and of assessing $800 billion in taxable property, was found to have earned $90,000 in 2007 for her work as a member of the board of directors of an outside firm. She resigned from the board of that firm and the mayor said, “I have enormous confidence” in her."

That is, until more stuff hit the fan, and even the ever loyal Bloomberg had to realize that there was no more defense for this self server. But it took the Post's expose of her canoodling to get this ethical challenge jump started: "City Finance Commissioner Martha Stark has been dating a former assistant commissioner in her department -- which also hired her lover's ex-husband and three of Stark's family members, The Post has learned."

And, as the Post reports this morning, Stark's improper management style was well known within the finance department: "Current and former Finance employees were elated to hear Stark is leaving. "She should've resigned many years ago because there's been a lot of stuff that she was doing that nobody's caught. She got a lot of people that she knew into positions [even though] they didn't know anything about the jobs," said a former employee."

So it's now the NY Post that is doing the due diligence for the myopic mayor? A further indication, it seems to us, that the term limits extension-once again affirmed by the courts-may be legal; but it sure ain't in the best interests of the people of this fair city.

Tuesday, April 28, 2009

A Bridge Too Far

The latest news from the MTA is not good; and as the deficits keep mounting, it becomes clearer by the day that the tolling of the bridges would be a mere palliative. In fact, the entire bailout exercise is simply, "A Bridge Too Far;" because it mirrors that classic film's failed objective in taking control over Nazi controlled bridges as part of an Allied planned counter offensive in WWII:

"The film tells the story of Operation Market-Garden, and its ultimate failure, the Allied attempt to break through German lines and seize several bridges, with the main objective the bridge over the Lower Rhine (Neder Rijn) River, in the occupied Netherlands during World War II. The name for the film comes from a comment made by British Lieutenant-General Frederick A.M. Browning, deputy commander of the First Allied Airborne Army, who told Field Marshal Bernard Montgomery, the operation's architect, before the operation, "I think we may be going a bridge too far."[2]

But we digress. The relevant point here is that the MTA is in such bad shape that the toll proposal is that bridge too far-an unworkable, and unrealistic objective, in spite of the fact that the goal of saving mass transit remains a worthy one indeed. City Room's post on this is illustrative: "Plummeting revenues from ridership, tolls and taxes mean that even after it raises fares by up to 30 percent and slashes service, the Metropolitan Transportation Authority faces a $621 million deficit this year, officials reported on Monday, as they presented a revised budget forecast. According to the new forecast, next year’s deficit will be more than $1 billion."

And this from the NY Post, on the authority's bungling of a post 9/11 security contract: "MTA bumbling has imperiled a massive post-Sept. 11 security project that's months behind schedule and can't be completed, a blockbuster federal lawsuit charges. Lockheed Martin Corp., one of the nation's leading defense contractors, is asking a federal judge to release it from a deal inked in 2005 to install high-tech surveillance equipment to protect subway riders from potential terror attacks."

But all this only underscores the point that we've made already. Devising any MTA bailout plan separate and apart from the state's overall budget is irresponsible. Mass transit is a vital service; and it should be subsumed in the budget negotiations so that new taxes and fees can be earmarked for the expressed purpose of insuring the most efficient and reliable-as well as cost effective-is provided for commuters. Legislators should be forced to choose between an over bloated state government-and even the sacred cow of education-and transit needs.

Instead, we have this fiction of a public authority, whose funding is considered in a parallel political universe. Enough already! Just as an independent BOE was dismantled because it avoided real political oversight, so should the MTA be dismantled-and real political accountability brought back into the panoply of policy choices.

All of the clamor and controversy over tolls, is diversionary; eliding as it does the core issue of political cowardice that lies behind the entire public authority mythos. Let's tear down those walls and rebuild with strong leadership and genuine accountability. At the end of the day the governor should be the person in charge; and all of these efforts to "save" the MTA are only, "A Bridge Too Far."

Monday, April 27, 2009

Audit Please!

The intrepid Andrew Wolf, writing in the NY Daily News, persuasively lays pout the case for not renewing the current form of mayoral control of the schools: "If we can draw an analogy between a certain company and our recent experience with the schools, we might consider the case of Enron. Under mayoral control, the spending of your tax dollars has soared to $21 billion from $13 billion a year. For an increase of this size, we should expect "profits" in terms of better student performance."

What about those increasing test scores? As Wolf says, we better ask who's crafting the exams: "Test scores, we are told, are up. Which scores? On state tests, scores are up. But our state is becoming infamous for "dumbing down" its tests. Like many other states, New York is trying to demonstrate "annual yearly progress" under No Child Left Behind by making its tests easier. With the city administering, grading and analyzing standardized tests, there is nobody to monitor fraud and bogus or inflated claims. That's even less oversight than Enron got!"

Of course, when we examine the results of the more reliable national tests, scores remain flat-in spite of the huge hike in spending: "On the federal government's gold-standard test, the National Assessment of Educational Progress, or NAEP, results in the city have been flat since the mayor's programs were implemented. Ironically, greater gains were consistently posted in the final years of the much-maligned Board of Education. Similarly, scores on the SAT have actually declined slightly under the mayor's stewardship."

Graduation rates are also unreliable; and when we take a look at how some of these ersatz graduates actually perform once they get to college, there's clear indications that the system is issuing mail order diplomas: "But the truth ultimately comes out. CUNY reports that more than three-fourths of city high school graduates attending community colleges require remediation. A high school graduate who is not prepared for a community college should not have been awarded a diploma."

The solution? As Wolf underscores: putting the public back into the public schools by insuring that there is proper oversight of the enterprise: "The Legislature must reform the law and put the public back into the public schools, so that any control at the top is subject to the oversight of the people. That's just good business." It would also help if some of the local media would also get back in the business of doing proper oversight.

In this morning's NY Post, the paper highlights just how much influence the UFT has on a group that is challenging mayoral control while claiming grass roots status: "Next week, a coalition of advocacy groups will bus an army of parents into Albany for a "lobby day" against mayoral control of the city's schools -- a prime example of how Randi Weingarten's teachers' union shapes public perception and policy behind the scenes. The May 5 event, part of the Campaign for Better Schools, is meant to show lawmakers that there's massive grass-roots opposition to Mayor Bloomberg's stewardship of the school system."

As it turns out, the union has ponied up hundreds of thousands of dollars for the advocacy group; and we applaud the Post for the investigative digging. But what about Learn NY, a group that supports mayoral control but that also has close financial ties to the mayor? With all of this faux advocacy going on, it's time that the entire school experiment be submitted to an independent evaluator. Marx's admonition is crucial here: "Who will educate the educator?"

Rev. Albatross

Well, it looks as if Governor Davis Paterson may be showing some life after all. As the NY Times reported yesterday: "Faced with an increasingly popular rival in Attorney General Andrew M. Cuomo and a growing loss of confidence among top Democrats, Gov. David A. Paterson is making a pointed pitch to New York’s political establishment: I’m not dead yet."

Paterson reminds us of the apocryphal man who fell out of the 12th story window. When he passed the third floor, someone looked at and asked: "How are you doing? " To which he replied: "So far so good!" But of course, if you're in free fall, there's no one better to catch you before you crash land than that old Good Samaritan, the Reverend Al Sharpton.

After all, if there is anyone who can revive the political fortunes of the governor, it's this political miracle worker. As the NY Daily News tells us: "The Rev. Al Sharpton challenged his longtime foe, Republican Rudy Giuliani, to run for governor Saturday, predicting struggling Gov. Paterson will prevail in the next election."Come on and run, Rudy. We want you to run," Sharpton exhorted at his Harlem headquarters, where politicians were rallying for Paterson. "Run, Rudy, run!" the crowd chanted back.

All of which just makes us smile-who else but the reverend could promote a political resurrection this close to Easter? But are we the only ones who see this as the governor's death rattle? As the Times points out: "Underscoring the pressure Mr. Paterson faces, some close friends and allies have privately been discussing — apparently without Mr. Paterson’s knowledge — where the governor might land if he did decide not to run. One idea that has come up is a position at Columbia University, where Mr. Paterson earned his undergraduate degree and where he has been an adjunct instructor, according to some of those involved in the discussion."

The fear, of course, is that Paterson at the top of the Democratic ticket in 2010 will sink the entire enterprise: "But at a moment when Mr. Paterson’s low approval ratings and successive fumbles have many top Democrats concerned that he will drag down the entire party ticket in 2010, the governor appears determined to fight on."

On the other hand Big Al only looks as if he's full of helium-and will promote the Paterson lift off as well as a lead balloon: "Sharpton shot down suggestions that state Attorney General Andrew Cuomo will challenge Paterson in a Democratic primary - a fight a Sienna poll out last week showed Cuomo will win 64% to 11%. "That race is not going to happen. This is not about David and Andrew. This is about David and Rudy Giuliani," Sharpton said. Giuliani, a Republican, would beat Paterson 56% to 29%, the poll found."

But no one, aside from the self serving reverend, thinks that Paterson will even reach the point where he will be able to even face off against the former mayor. There may still be a ways to go, but this kind of miracle probably should be reserved for Lourdes.

Mr.Indispensability

As Adam Lisberg reported yesterday, the city needs to find some more revenue-and find it quick in order to balance the municipal budget before June 30th: "Mayor Bloomberg and the City Council have to plug a billion-dollar hole in the budget by the end of June - but they're running out of taxes to raise. Recall that the city raised property taxes 7.5% at the start of the year and axed the $400 property tax rebate, which didn't go over well with Council members who rely on homeowners for votes. They're unlikely to do it again."

So, let's get this straight. After just about eight years in office, and after having raised taxes to levels never before seen in the city's history, Mike Bloomberg finds that his budget once again is out of whack; and needs another cash infusion. This is what happens when you hire a political ingenue, one whose philosophy is steeped in the belief that the government is always a benevolent force. Which is why, for the past seven years, Mike Bloomberg has been adding workers to the public payroll-increasing the size of government while, at the same time, raising taxes and fees for middle class New Yorkers.

E. J. McMahon captures this irresponsible nobless-and he did so over six years ago: "One welcome change in Mayor Michael Bloomberg's preliminary budget is a more accurate count of New York City's enormous municipal workforce. It turns out there are even more city employees than anyone previously thought -- ironically underscoring just how little Mayor Bloomberg is initially proposing in the way of agency workforce reductions, despite all the talk of budgetary "pain." Rather than identifying the size of the workforce as part of the problem, the new mayor benignly characterized it as evidence that New York is simply "more compassionate" than other cities. This kind of compassion doesn't come cheap."

We wonder if Bloomberg will be highlighting this "compassionate side" in his next batch of relentless campaign self promotion? No, we don't believe we'll be seeing this-nor are we sanguine that a supine editorial chorus will be pointing this side of the mayor out when the next round of taxes is proposed. As the News points out: "That property tax increase is just now rippling through other costs, like your electric bill. Half of Con Ed's new 6.4% rate increase is because of the company's rising tax bill. Property taxes and rising utility costs will also help push up rents on New York's 1 million rent-stabilized apartments - so no one is exempt from that pain."

For eight years Mike Bloomberg has squandered any opportunity to rein in the cost of government-hoping to use huge tax increases, Wall Street cash, and his own great wealth to weather the economic storms; and, largely, he has been able to do so because of a relatively quiescent local media, and an equally tame and inept Democratic party. An environment that will likely see him ascend to a third term.

But what Steve Malanga said about him in 2003 is still true today-only more so: "A year later, it’s now clear what the city has gotten with Bloomberg: a political neophyte, presiding haplessly over a government that is rapidly spinning out of control. In a dismaying rerun of Mayor John Lindsay’s 1960s mayoralty, Bloomberg is behaving as if New York were once again the ungovernable city. The mayor has emerged as a guardian of the local status quo, the defender of big government and the municipal workforce. Proclaiming that forces beyond his control are compelling him, he has instituted the largest tax increase in the city’s history, apologized for even the smallest cuts in government services, declared that everything New York City’s massive government does is vitally necessary, and confidently announced that tax increases won’t drive out citizens or businesses."

After performing like the resurrection of John V. Lindsay, he now wants to be re-elected because of his sterling stewardship of the city's economy and government. There could be no greater disconnect than the assertion that the city needs Mike Bloomberg's leadership to help guide us out of the worst recession in 70 years. As my mother-in-law would say: "Like a loch im kopf."

Friday, April 24, 2009

Wholesale Protests

The franchised beer wholesalers went on the war path yesterday to protest the expanded bottle bill. As the Journal News reports, the beer guys are targeting the inception date of June 1st, as well as the NY only bar code: "Several food and beverage businesses in the Lower Hudson Valley pressed their case yesterday against the state's newly amended bottle deposit bill, charging it would cost jobs and raise prices for consumers. Dozens of employees from three regional beer distributorships picketed the offices of state Sens. Andrea Stewart-Cousins in Yonkers and Suzi Oppenheimer in Port Chester. Some carried signs that read, "My job is worth more than 5 cents."

The protesters ridiculed the June 1st date-and one, Heinekin USA, made it clear that imported products couldn't simply turn ships around and change inventory at the drop of a hat: "Meanwhile, three other companies said at a news conference hosted by the Business Council of Westchester in Harrison that the June 1 deadline for implementing the new rules was unworkable. "If we had a magic wand, maybe," said T. Daniel Tearno, senior vice president for Heineken USA Inc. of White Plains. Overseas manufacturers such as Heineken need time to retool their production processes, he said, and many warehouses are stocked with products that cannot be relabeled before the summer."

And then there was the issue of prices rising: "Tearno said the law could raise the price of a case of beer by $1.35 to $2 or more. Mitch Klein, a vice president at Krasdale Foods in West Harrison, said the markup on a case of bottled water resulting from new deposits and fees could top $3." Not all the clamor on prices and costs, however, was righteous.

Here's the franchised beer position: "But D. Bertoline & Sons in Peekskill, the distributor of Budweiser beer products in Westchester and Putnam, uses unredeemed deposits to pay the costs of shipping recycled products to Connecticut, Vice President of Administration John Bertoline said. That lost revenue, plus higher handling fees and a higher beer excise tax imposed by the law, will lead to price increases that get passed along to consumers, he said. That would depress sales, which in turn could reduce employment, he added."

Well, let's get one thing very clear. We were right there when the bottle bill first passed and went into effect in 1981; and the beer wholesalers wasted no time in raising the price of beer by at least $3.00 a case-all for the increased costs associated with implementing the collection and redemption of the empty containers. So now what?

Well, now these very same wholesalers-insulated from real competition by territorial monopolies-want to once again meet the cost of redemption by jacking up the price of a case of beer by another $2! What about the millions of unredeemed deposits that these folks squirreled away over the past twenty seven years? If beer prices are raised, there should be an intervention and investigation by the AG's office into the anti-trust implications of the wholesalers' actions. Additional costs indeed!

That being said, it is simply ludicrous to force all of the deposit companies to use the separate "NY Only" UPC: "Legislative leaders and Gov. David Paterson acknowledged Wednesday that they would need to revisit the bar-code issue, saying they may need to add an amendment to the law over the start date. "We don't want to do anything to hurt the industry while we are trying to clean up the environment," Paterson said."

"If I Were a Rich Man..."

So Mike Bloomberg continues to spend money like a drunken stockbroker-on a pace, according to the NY Times, to once again break all election records for such excess: "Six months before the election, Michael R. Bloomberg has already outspent his leading rival in the mayor’s race by a seven-to-one ratio, despite a commanding lead in the polls. With a fresh wave of television and radio commercials, the mayor has poured $7.5 million into the campaign so far, according to new records obtained by The New York Times. In the process, he is shattering — once again — records for spending in a New York City election and running financial laps around his challengers."

In doing so, the mayor is only trying to be proactive; after all, in the current economic downturn there may be one or two New Yorkers who might feel that Mike Bloomberg lacks the background and personality to really empathize and care about their plight: "The mayor’s new advertising blitz features a tieless Mr. Bloomberg talking to middle-class New Yorkers about their economic anxieties, assuring them he has a plan to protect their jobs and keep the city affordable.The commercials suggest that, despite the mayor’s wealth and the power of incumbency, his campaign is uneasy about how the volatile economy could affect voters’ views of him."

This uneasiness has led to a dramatic case of overkill: "Mr. Bloomberg, a billionaire, has now spent more than the city’s campaign finance laws allow Mr. Thompson — or any other challenger accepting public financing — to use in the race from now until the September primaries." But Bloomberg's using his money for a good cause-the best special interest that money can buy: self aggrandizement.

It's just that some of us remember that Mike Bloomberg said he would never again spend this kind of money-he said that in 2001 when he spent around $80 million to "introduce" himself to the folks who had no idea about who he was. Since than he has lapped the field in 2005, spending similar amounts to get re-elected; and will now do the same to re-introduce himself to the dwindling cohort of voters who might not yet know who he is (or those voters who might mistake Bloomberg for someone who really doesn't care about them. Can you imagine?).

There's another really good rationale for the current mayoral excess. Bloomberg's latent personality traits-if exposed-would pose a threat to his re-election; and the lavish spending blitz effectively insulates him from a Mr Hyde type of exposure, Clyde Haberman captured this the other day, in analyzing the mayor's dyspeptic response to a disabled reporter: "It is this sullen side that New Yorkers have seen a lot lately. The mayor seems to have been in a chronic bad mood for half a year, more or less since he won his battle for a change in the law to give him a shot at a third term. This cannot be good for him. It can only reinforce a common (if not necessarily fair) knock on him: that he does not appreciate the hardships that ordinary New Yorkers endure. In politics, it is usually unwise to buttress negative stereotypes of oneself."

But there's a silver lining in all of this spending-and leave it to the mayor's campaign to ferret it out: "Mayor Bloomberg has never taken a dollar of special interest money, and this November voters will again have an opportunity to support a candidate who is unbought and beholden only to the people of New York,” said Jill Hazelbaker, a spokeswoman for the mayor’s campaign."

Bloomberg is unbought because he is one of those expensive chotskies that, if you have to ask the price, you can't afford to buy it. So, unrestrained by any ties to any New Yorkers-or their tawdry interests-he is held accountable only by the one thing that could possibly restrain his meglomaniacal tendencies: a genuine love and caring for the fate of the average New Yorker. Which lead us to opine-bring back the special interests.

Here Come the Supermarkets?

According to the Obsever's Real Estate blog, the Department of City Planning is about to certify its zoning proposal that is designed to make it easier to site supermarkets in the city-particularly in low income neighborhoods: "Let there be supermarkets. City Planning Director Amanda Burden said Wednesday night that a zoning plan to encourage new grocery stores is just a few weeks away, with her agency planning to certify its proposal and kick off a seven-month public approval process. “We are going to be certifying this month,” she said, speaking at NYU’s Wagner School for its Henry Hart Rice lecture."

How effective the plan will be remains to be seen-and we have posted some reservations a while back. As we said at the time: "Richard Lipsky...said the draft policies were a “good step,” but do not go far enough to counter the forces that are continually shuttering grocery stores citywide. “The more compelling policy issue is the disappearance of existing stores,” he said. He also urged the city to prioritize grocery store uses when selling off city-owned land, which was one of the Planning Department’s own recommendations last fall."

Keep in mind that incentivizing new store construction, without also subsidizing existing markets, can exacerbate the trend of supermarket disappearance but creating an even more unlevel playing field. But the fact that DCP recognizes the problem, and is looking for solutions is a positive step: "The rationale: market failure. The city considers grocery stores to be beneficial to neighborhoods, but, especially in low-income neighborhoods, the numbers haven’t been working for supermarkets, leading to store closures and a lack of food options for residents.
“Hundreds of supermarkets have closed all over the city,” she said. “They cannot compete with Rite Aid and Duane Reade, and this is not only terrible for economic development, but it’s terrible for the health of our city.”

So now the proposed zoning change will be sent to the city council where its pluses and minuses will be thoroughly analyzed and debated. As always, the devil will be in the details. But enough negativity; at least the folks at City Planning is putting their heads together and getting proactive.

Do As I Say: Compulsory Miseducation

The controversy over mayoral control of the NYC schools reveals that the top decision makers-Bloomberg and Klein in this case-have never had a child attend any public education institution. Yet both feel fully qualified and entitled to oversee school policies that they have never deigned to subject their nearest and dearest to. While we don't think this should automatically be a disqualifier, it does raise some issues about mindset and worldviews.

But as suspect as the Bloomberg/Klein/Sharpton regime might be, it pales in comparison to the mischief going on in Washington, DC-where the Congress, in complicity with our "Education President," has canceled a successful voucher program for poor children. As George Will writes: "The District's mayor and school superintendent support the program. But the president has vowed to kill programs that "don't work." He has looked high and low and -- lo and behold -- has found one. By uncanny coincidence, it is detested by the teachers unions that gave approximately four times $15 million to Democratic candidates and liberal causes last year."

And the new education secretary went even further: "Not content with seeing the program set to die after the 2009-10 school year, Education Secretary Arne Duncan (former head of Chicago's school system, which never enrolled an Obama child) gratuitously dashed even the limited hopes of another 200 children and their parents. Duncan, who has sensibly chosen to live with his wife and two children in Virginia rather than in the District, rescinded the scholarships already awarded to those children for the final year of the program, beginning in September. He was, you understand, thinking only of the children and their parents: He would spare them the turmoil of being forced by, well, Duncan and other Democrats to return to terrible public schools after a tantalizing one-year taste of something better. Call that compassionate liberalism."

So we have yet another example of the, "Do as I say, but not as I do," cohort of elected officials-since the president also has had his two daughters opt out of the copious benefits found in the D.C. schools. This is, in our view, beyond shameful-and Juan Williams agrees: "As I watch Washington politics I am not easily given to rage. Washington politics is a game and selfishness, out-sized egos and corruption are predictable. But over the last week I find myself in a fury.
The cause of my upset is watching the key civil rights issue of this generation — improving big city public school education — get tossed overboard by political gamesmanship. If there is one goal that deserves to be held above day-to-day partisanship and pettiness of ordinary politics it is the effort to end the scandalous poor level of academic achievement and abysmally high drop-out rates for America’s black and Hispanic students. The reckless dismantling of the D.C. voucher program does not speak well of the promise by Obama to be the “Education President.”

For this, we have the teacher's union to blame-since there is no effective organized interest that can represent the disenfranchised school kids: "With no living, breathing students profiting from the program to give it a face and stand and defend it the Congress has little political pressure to put new money into the program. The political pressure will be coming exclusively from the teacher’s unions who oppose the vouchers, just as they oppose No Child Left Behind and charter schools and every other effort at reforming public schools that continue to fail the nation’s most vulnerable young people, low income blacks and Hispanics."

So where is Al Sharpton on this outrage? AWOL, as usual, when there's no potential paycheck in the offing. But the deep sixing of the voucher plan is incredible when you consider the response it generated from D.C. parents: "This voucher programs is unique in that it takes no money away from the beleaguered District of Columbia Public Schools. Nationwide, the strongest argument from opponents of vouchers is that it drains hard-to-find dollars from public schools that educate the majority of children. But Congress approved the D.C. plan as an experiment and funded it separately from the D.C. school budget. It is the most generous voucher program in the nation, offering $7,500 per child to help with tuition to a parochial or private school. With that line of attack off the table, critics of vouchers pointed out that even $7,500 is not enough to pay for the full tuition to private schools where the price of a year’s education can easily go beyond $20,000. But nearly 8,000 students applied for the vouchers. And a quarter of them, 1,714 children, won the lottery and took the money as a ticket out of the D.C. public schools."

The best way to provide a better education for poor children, is to give them real choices-something that a pro-competitive voucher program certainly does: "The students, almost all of them black and Hispanic, patched together the voucher money with scholarships, other grants and parents willing to make sacrifices to pay their tuition. What happened, according to a Department of Education study, is that after three years the voucher students scored 3.7 months higher on reading than students who remained in the D.C. schools. In addition, students who came into the D.C. voucher program when it first started had a 19 month advantage in reading after three years in private schools."

So once again we find that the president is rhetoric is simply not walking the walk; and the Duncan Hines school mix is destined to be half-baked.

Thursday, April 23, 2009

Will Quinn Face a Challenge?

The Crain's Insider speculates this morning (subscription) on just how City Council Speaker Chris Quinn might get ousted come this November: "A Democratic operative says it might be possible for an enterprising City Council member to cobble together 25 colleagues and oust Christine Quinn from the speakership after the fall elections. Realistically, the chances are slim, one council member says, because “inertia is an incredibly strong force” and no one on the council seems inclined to plot a coup."

Of course, you would need 26 votes, but why quibble? The road to an ouster, as Crains points out, would have to go through Brooklyn: "But if someone does, says the operative, he or she would begin with a coalition of Bronx and Brooklyn members. Brooklyn has a fairly united delegation that generally takes direction from county Democratic leader Vito Lopez, who appears to have become increasingly unhappy with Quinn and is on good terms with fellow assemblyman Carl Heastie, the new Bronx Democratic leader."

But there is a long time between now and then-and who knows what the political landscape will look like at the time when a leadership decision will have to be made. In our view, however, the perpetuation of one man rule in the city needs to be changed; and the only way that will get done is if the city council becomes a real check on mayoral excess-something that won't happen under the current regime if it were to be perpetuated.

Haste Makes Waste

The Poughkeepsie Journal is reporting this morning (via Liz) that there is a good chance that the June 1st implementation date for the expanded bottle bill will be delayed-as we have been lobbying for: "State leaders indicated Wednesday they may need to delay the expansion of the state's bottle-deposit law over concerns from bottlers that companies won't be able to implement the program by the June 1 deadline. The protest from bottlers and breweries is centered on a new state law that would require all recyclable bottles to carry a New York-specific bar code. Bottlers say there is simply no way all the bottles in New York could be changed by the deadline."

Nor has anyone bothered to do even a cursory due diligence over the cost that the proposal will have for the state's small bottlers and distributors; which is why delay is a good thing, because it will allow for the creation of a more rational review process for a number of the proposed changes that were snuck into the expanded container deposit law.

The NY only UPC code at least has gotten the attention of state leaders: "Legislative leaders and Gov. David Paterson acknowledged Wednesday they will need to revisit the bar-code issue, saying they may need to add an amendment to the law to push out the start date. "We don't want to do anything to hurt the industry while we are trying to clean up the environment," Paterson said."

But no one has even bothered to examine just how many of the water companies-just added to the deposit stream-will collect their empty containers. Most don't have a route delivery system, but instead rely on food warehouses to deliver their products. Back hauling garbage on food delivery vehicles, aside from being impractical, is against the law.

So it appears that delay will be inevitable. What else gets changed during the dely process remains to be seen; but we will be marshaling our forces to inform the legislature how important it is to insure that the smallest players in the beverage production and distribution process be protected from the costlier provisions of the expanded law.

Mayoral Performance Anxiety

As the scene shifts in Albany away from the budget and the MTA debacle, the focus of attention will be on the issue not whether or not the mayor of the City of New York-someone whose children never got within miles of public education-should continue to have unfettered control of the governance of the city's schools. A new report highlighted in the NY Times raises questions about the wisdom of giving continued royal prerogatives to Mike Bloomberg in this important area: "The lagging performance of American schoolchildren, particularly among poor and minority students, has had a negative economic impact on the country that exceeds that of the current recession, according to a report released on Wednesday."

When we look at the city's results, the numbers do not tell a tale of stellar achievement: "In New York City, an analysis of 2007 federal test scores for fourth graders showed strikingly stratified achievement levels: While 6 percent of white students in city schools scored below a base achievement level on math, 31 percent of black students and 26 percent of Hispanic students did. In reading, 48 percent of black students and 49 percent of Hispanic students failed to reach that base level, but 19 percent of white students did."

Results that don't, in our view, act as a clarion call for allowing the mayor and Chancellor Klein-another whose children never got the benefit of a public education-continued carte blanche. Klein in particular, a person without a single educational credential should be replaced; whatever happens up in Albany on the governance issue. This foray of his into sociological analysis underscored our point: "The New York City schools chancellor, Joel I. Klein, who introduced the findings at the National Press Club in Washington, said the study vindicated the idea that the root cause of test-score disparities was not poverty or family circumstances, but subpar teachers and principals. He pointed to an analysis in the report showing low-income black fourth graders from the city outperformed students in all other major urban districts on reading (they came in second in math)."

At this rate, we're going to have to grant lifetime tenure to-not teachers-but to the mayor and the chancellor; folks whose work will perpetually be graded as incomplete, while they search for the remedies to their continual shortcomings in providing the kind of educational results that Bloomberg told New Yorkers they would get once he was given control of the schools. Oh yes, and he also said that if the results weren't praiseworthy, he didn't deserve to be re-elected (again and again?).

In this context Klein, as adept at three card monte as any New York street performer shifts attention away from meager test scores to graduation rates: "While state test scores have shown improvement since Mr. Klein took office, eighth-grade scores on federal math and reading tests, known as the National Assessment of Educational Progress, have not shown significant increases since 2002. In an interview after the speech here, Mr. Klein said he would be the first to acknowledge that the city was not where it needed to be in closing the gap, particularly in middle schools. But, he added, there have been signs of progress among younger students, and he believed the city’s four-year graduation rates — 69 percent for white students, 47 percent for black students and 43 percent for Hispanic students — could reach state averages within five or six years."

And in the long run. we're all dead; which is why we need to have this system properly checked and balanced. After all, if this concept was good enough for the founding fathers, shouldn't it be good enough for Mike Bloomberg? But the one structure that was put into the new governance system that was supposed to do just that, has been eviscerated by the man who doesn't really like to be second guessed.

As the Times also reports this morning: "In a nearly empty high school auditorium one evening last month, parents, teachers and cynics marched to the microphone, turned to the collection of volunteers derisively called the Panel for Educational Puppets, and began to scream...It is a ritual that unfolds monthly around the city at each meeting of the Panel for Educational Policy, the oversight group that replaced the independent Board of Education when the State Legislature handed New York’s mayor control of its sprawling school system in 2002. In designing the mayoral takeover, lawmakers viewed the panel as critical to maintaining a “balance of authority,” and promised it would have a “meaningful role” on citywide education policy and approve major contracts, according to the authorizing language that accompanied the bill."

Not! When the panel even threatened a modicum of independence, the city's resident autocrat moved into action: "The board has cast 98 votes over 79 meetings — the vast majority of them unanimous. It has never rejected an administration proposal. The most contentious discussion came in 2004, over the mayor’s plan to hold back third graders who scored poorly on standardized tests, and resulted in the ouster of three dissenting members in what is known in education lore as the Monday Night Massacre."

Now when you have miraculous results from an innovative governing initiative, it is quite appropriate to shush the critics who want to tinker with success. The NYC schools aren't-at least not under the private school devotees-an example of such a success. And the Bloomberg response to the one device that was supposed to provide balance is precisely why change is necessary: "“When people say, ‘How could you have devised a system that gave total authority and absolute autonomy to the mayor?’ My answer to them is, ‘Well, we didn’t,’ ” said former Assemblyman Steven Sanders, who was chairman of the Education Committee at the time the change was made and now is lobbying for major changes in mayoral control for the New York State School Boards Association. “It was supposed to provide a place where there would be real vetting of important issues, where there would be meaningful dialogue and debate and a vote that was not predetermined,” Mr. Sanders said. “It is certainly clear to anyone who looks at the system that that is not the case.”

But the Bloomberg/Klein/Sharpton regime at least knows how to appear to be good. Co-opt a whole bunch of folks with expensive jobs and lucrative consulting gigs, bamboozle a supine tabloid press, and go after critics by accusing them of retrograde political thinking. Meanwhile, Klein tells us-seven and a half years into his transformative reign-that he has found the path to educational enlightenment: "He said it would require a focus on finding ways to recruit high-quality teachers."

These folks need to be shown the door. Their efforts here have proved to be-in the words of the innkeepers wife in Les Miserables-"not much there." But that doesn't stop the tabloids from their strident calls for preserving a system that, if it were a private sector company, would be number one on the bailout list-with its executives being shown the door by an angry president.

Wednesday, April 22, 2009

100 Bottles of Beer on the Wall

The Observer's Jimmy Vielkind follows up on the growing storm over onerous aspects of the recently expanded bottle bill:

"As environmental advocates feted the state's top legislative leaders this morning at an Earth Day celebration in Washington Park, David Paterson said officials would look at the expanded bottle bill--a centerpiece of the green agenda that was enacted this year in the state budget--which some bottlers have said cannot be feasibly implemented in time. By June 1, bottlers are supposed to begin using New York specific-UPC codes on bottles of water, which will now include bottled water. Richard Lipsky, a lobbyist for business groups that oppose the bottle bill who continues to beat the drum against it on his blog, said that this is not feasible, because some small bottlers buy their labels a year in advance."

Indeed they do-among other impracticalities and expensive encumbrances to particularly smaller soda and water companies. The masochistic streak in us simply can't wait till the bill actually is implemented, because the resulting sticker shock, really a thinly disguised regressive tax, is gonna reverberate throughout the state at a time when the folks are already reeling from higher taxes and fees.

Apparently, as Vielkind points out, Governor Paterson has begun to recognize the seriousness of the problem: "There is a concern raised by the industry," Paterson said, after accepting an award for his work on the environment. "We don't want to do anything to hurt the industry while we are trying to clean up the environment, and we are talking to them and if they demonstrate to our satisfaction that they can't undergo this change in time, we'll certainly, one of the reasons that we're in government is that government continues to try to get it right, even more than we have before. We'll be amenable to that."

Better late than never, we suppose; and, as Speaker Silver tells the Observer, there are a number of methods that can be used to ameliorate the situation: "Assembly Speaker Sheldon Silver said it was a "technical issue" that would be addressed. Lawmakers could write and pass a chapter amendment--a bill which amends the earlier budget bill--moving the deadline back. It could also be included in a budget cleanup bill, which fixes typos and dollar amounts in the now-enacted omnibus spending plan."

How far reaching any changes will be is unpredictable. What is predictable, however, is that we will be found in disagreement with NYPIRG's Laura Haight: "If that happens, bottlers will push for relief for some businesses, Lipsky said. Bottle Bill advocates, including NYPIRG's Laura Haight, said any change should be small and limited."

And, as one commenter to the Observer blog points out, small brewers will also be negatively impacted-underscoring our point that the entire expansion effort is a dagger in the heart of all small beverage companies; at least if no changes are appropriately made: "As a drinker of microbrew beer I have been hearing from retailers who handle hard-to-find brews. They indicate that currently it looks as if small breweries will elect to drop NY rather than set up special labeling and product segregation. And what surprised me, one Albany retailer thought that brewers actually in NY might drop NY and sell to the national market. Particularly the canned beers, like Dale's and Snapperhead, which have to be printed as the can is produced rather than just labeled."

Still, lawmakers appear to be responsive to the legitimate worries of the industry. Now comes the hard part-where the devilish details are fought over. Stay tuned.

Unscrewing the Bottle Tops

As we had urged a few weeks ago, there appears to be a move to amend the recently passed expanded bottle bill. As the Times Union reports (via Liz): "State lawmakers are considering revising New York's expanded bottle deposit law before it takes effect to address problems outlined by retailers and bottlers."

And the problems that are front and center, are precisely those that we had outlined in our original post on the subject-and the ones we have been pressing in our own lobbying efforts on behalf of Good-O Beverage and a host of other small soda companies: "Of particular concern is a requirement that all containers sold in New York carry a state-specific UPC bar code. The provision was intended to prevent fraudulent returns, but many grocers, bottlers and breweries say it would wreak havoc on their production and distribution systems. They also say it could be impossible to meet the deadlines for that provision included in last month's legislation."

And, of course, there is an almost unanimous belief that the June 1st inception date simply cannot be met, as well as a concern about the reverse vending machine regulation: "The objections from retailers and bottlers have focused mainly on three aspects of the legislation: the New York-specific UPC code, which is used to scan prices; a series of near-immediate implementation dates, including June 1 for the UPC code; and a requirement that stores install more reverse-vending machines to collect returned containers."

Fortunatley, our lobbying efforts have not fallen on deaf ears: ""The Senate majority is reviewing concerns that have been brought to our attention, and we are looking at fixing some of these concerns," including the UPC bar code, said Travis Proulx, a spokesman for Senate Majority Leader Malcolm Smith. In a news conference Tuesday afternoon, Smith also acknowledged "the effective date may be an issue."

And the assembly apparently is not immune to making some changes: "Melissa Mansfield, a spokeswoman for Assembly Speaker Sheldon Silver, said "we are aware of the concerns and we are looking into it," but declined to elaborate on any potential action." It is clear, however, that a clean up bill is going to be forthcoming on this issue-which behooves all of those impacted to make sure that their voices are heard; or, as the saying goes, "Speak Now or Forever Hold Your Peace!"

Aside from the issues outlined above, we are looking to exempt smaller companies entirely from some of the onerous provisions in the expansion; and plan to underscore just how job killing and anti-small business they are. The response of the legislators has, so far, been encouraging.

MTA: More Taxes Ahead

The NY Post doesn't like the new senate Democrat MTA bailout plan: "In truth, there's good reason to doubt that Smith's plan could put the MTA on track to long-term fiscal health -- or that it will even pass his own chamber. Clearly, Smith doesn't have even the Senate on board -- which isn't surprising, given that his plan contains something in it for everyone to hate."

But the problem is that the MTA is an absolute mess-and has been so for years but the reality has been taped over by huge real estate fees. As Nicole Gelinas points out: "By now, everybody knows about the state-run MTA's problems. The bubble-era real-estate taxes that have supported the authority in recent years have burst. The MTA is stuck with piles of debt and unsustainable union labor costs that the politicians larded on for years, with no way to pay for it all."

A total cesspool of mismanagement and political patronage-one that the state's leaders manged to separate from the budget negotiations that were just recently concluded. But why? If the state was going to grab stimulus cash and increase taxes and fees, then why wasn't a good chunk of that money directed at mass transit? Instead, we got an increase in overall state spending and a separate negotiation over the transit bailout that will mean additional taxes and fees. Only in New York.

This isn't a question about the irresponsibility of one branch of government, it is the failure of all branches to address the level of spending and the size of state government-and the total irresponsibility of raising taxes in the midst of am economic recession without looking to scale down the Leviathan. In this context, the MTA bailout hue and cry is sheer subtext.

Paterson's Haily Mary

Anne Michaud posts a piece at Newsday on the Paterson formula for victory in 2010; taking off from the following Gershman analysis in New York Magazine: "'The governor, say the aides, will start by mobilizing support from prominent black leaders, including Al Sharpton. He intends to tailor his message more explicitly to minority voters, drawing more attention to his overhaul of the Rockefeller mandatory-drug-sentencing laws. Aides say Paterson also plans to make a more direct appeal for support against his adversaries. “How is it that all of these unions run wild and kick him? It’s a kick at all of us. People in the African-American community are asking why are they doing it. It’s a pride thing,” says a Paterson ally.'"

To which Michaud adds: "Until now, Paterson has played his position as New York's first African-American governor very low-key. Cynics who expected him to appoint Harlem cronies to top government jobs, when he took over in March 2008, have been disappointed. It has proved to be a wise, unifying strategy for Paterson -- and not unlike the race-neutral appeal of Barack Obama's campaign for president."

So, apparently, the governor feels that by racializing the contest-and his appeal-he can keep the hard charging Andrew Cuomo on the sidelines. This strategy depends, however, on his success in raising his dismal poll numbers; because if he doesn't do so, Al Sharpton's army is only going to exacerbate Paterson's dilemma: "If Paterson doesn't step aside to allow Cuomo to grab the Democratic nomination for 2010, it's not at all clear that the attorney general will force the issue and risk raising those bad old feelings."

Ya think? It's all about the numbers. Because if the polls show the governor going down to a putative Giuliani challenge, it will be Black elected officials who will be holding the retirement party for Paterson. In any event, he really has only until the end of the year to craft a miraculous comeback, After that, the call for Cuomo's ascension will be deafening.

Tuesday, April 21, 2009

Voluntary Commitment

It takes a great deal of chutzpah to launch-with great fanfare and an Uncle Sam replica of the old WW11 poster-a campaign to increase volunteerism during the country's biggest economic crisis since the Great Depression. But Mike Bloomberg certainly knows from chutzpah, and has done just that. As City Room reported yesterday: "From now on, it will be easier for New Yorkers to offer a helping hand. Heeding President Obama’s call for boosting Americans’ engagement in civic service, Mayor Michael R. Bloomberg announced a series of programs and partnerships on Monday to encourage volunteerism among city residents."

What's that old saying about imitation being the sincerest form of fakery? Whatever! The economic timing may not be the best, but the political coatailing is exquisite. As City Room points out: "The announcement came on the eve of Mr. Obama’s signing of the Serve America Act, which will expand AmeriCorps, the nation’s civilian service force, from 75,000 to 250,000 members per years over five years. The legislation essentially mobilizes what former President George W. Bush used to call “armies of compassion” to undertake some of the country’s most urgent social challenges, like shoring up communities hard hit by the recession."

But, as the NY Post underscores, the army of volunteers may be an unwanted diversion from the harsh reality of simply trying to make a living in NYC: "More than a quarter of New Yorkers are spending half their money on rent, Rep. Anthony Weiner said yesterday. He said data shows there are now more than 572,000 people in the city who have to shell out half their income on rental housing. That's up more than 82,000 in six years. "It is a startling proof point . . . that New York is more and more a difficult place to live," said Weiner.

What folks can be doing to make this a better place to live-as millions of enterprising people have done in the past to make America's free enterprise system the greatest economic engine in history-is to start businesses and employ New Yorkers; a point that is made with bite by many of the commenters to the City Room story: "Maybe Bloomberg can volunteer himself to find people what they need right now: JOBS."

And the way to do this is not by employing hundreds, and spending millions on re-election self promotion; or a "five borough economic plan" that elides the fact that NYC is one of the most expensive place to start a business-even more so since Mike Bloomberg came in on his tax raising broom eight years ago. What we need is a mayor who understands that lowering the costs of government is the first step towards economic recovery; and who knows that creating an army of volunteers in the current economic climate is at best cosmetic, but at worst a Machiavellian diversion from the current mayor's failure to have prepared the city for this crisis,

Monday, April 20, 2009

Exodus!

Coming on the heels of the excellent post editorial yesterday, the City Room decided to pose the question: How Likely Are You to Leave New York? Some of the responses are eye opening, and underscore some of the latent anger that's out there over the high cost of living-much of it imposed by government-in New York. As one commenter said: "If I did not have a grade-school aged kid (I am divorced) living with her mother in NYC, I would have left this City and State long ago!! New York State & City have become a cesspool of special interests, greed, corruption and self-serving, elected politicians."

And another respondent has this to say: "I am more inclined to leave New York of late. It seems the city and state governments are not inclined to do anything that will encourage economic growth and job creation. All they want to do is raise taxes and prices (subway) to pay for ridiculous spending programs that should be cut in these lean times."

All of which may mean that the government here-at all levels-may have reached golden goose killing time; and the idea of fair share is pretty much a self serving mantra from folks dependent on a public pay check: "We are moving to Connecticut where property taxes are lower. We think Gov. Paterson and the legislature in Albany have lost their minds. “Good riddance” indeed. With the departure of people like us, taxes for the rest of you go up. Blame it on the political class."

Are these the millionaires fleeing? Of course they're not. But the WFP and company cleverly framed the argument for political consumption. In the long run. however, they may have been too clever by half-what with more than half the jobs in the city coming from the not-for-profit and government sectors. The nagging question ahead: Who's gonna pay the freight. A fair question, if not a fair share issue.

Mayor Gasbag

You have to give Mike Bloomberg credit for consistency-and you do know that consistency is the hobgoblin of mediocre minds, don't you? This time it's the mayor's support for increasing the gas tax: "Say what you will about Mayor Bloomberg's energy policy, but at least it's consistent. Having advocated higher taxes on fuel over the summer, Bloomberg yesterday came out in support of a return to the scary days of $4-a-gallon gasoline -- regardless of its potential impact on the fragile economy."

This is from someone with one of the biggest carbon footprints in the city-you know, that regular guy who rides the subways gauging the popular will. As the NY Post reported last year: "America's greenest mayor generates enough greenhouse gas to choke the Lincoln Tunnel.
Mayor Bloomberg - who has advocated everything from ditching incandescent light bulbs to taxing Midtown commuters to clean the air - produces 364 tons of smog-inducing carbon dioxide a year, according to a Post analysis of the billionaire's trans-Atlantic real estate portfolio and travel style."

How big is the Bloomberg footprint? "That's a carbon footprint larger than what's produced by 18 average Americans, 53 Europeans or 404 Guatemalans. It's equivalent to keeping 69 cars a year on the road or lighting the Empire State Building for 4 ½ days."

But Regular Guy Mike wants the higher tax in order to promote the mass transit he fails to use on his way to privately jetting down to Bermuda; just like he wants the average shlub to pay tolls and congestion taxes to promote the elitist schemes that he himself doesn't want to apply to himself. As the Post pointed out: "Bloomberg's carbon footprint could actually be much larger. The Post did not have enough information to estimate pollution generated by Bloomberg's four personal cars, the propeller-driven airplane he owns, or the company helicopter he's said to use."

So pardon our skepticism; and it's beyond silly to think that Mike Bloomberg has a sincere bone in his regular guy body. So when will the average New Yorker realize that this poseur isn't looking out for their best interests?

Escape Artists

While all of the editorial savants are egging on the Senate Democrats to pass the Ravitch toll plan, it is instructive to take a look at the tax context of the suggestion-and the fact that New York State is already reeling from the impact of high taxes. The impact of this high tax climate is just being felt; and, as Jonathan Williams pointed out in the NY Post yesterday, it could very well lead to an exodus of the kinds of folks that the state relies on to foot its bills.

As Williams tells us: "There's an old saying that high taxes don't redistribute income, they redistribute people. Unfortunately for the hard-working taxpayers of New York, this wisdom seems to be lost on Gov. Paterson and a majority of legislators in Albany. For 2009, the Empire State earns the dubious distinction of having the worst economic outlook of any state in the nation -- 50th out of 50."

All of this, however, has been lost on legislative leaders, who have ignored the high tax burden and imposed even more taxes and fees on the state's citizens-and have used the federal stimulus money to promote higher levels of government spending while doing so. And these new taxes were imposed after New York earned its bottom rung rating; 'This is according to the American Legislative Exchange Council (ALEC), a non-partisan membership association of state legislators. And New York's dismal ranking was measured even before any of the proposed job-killing tax increases were on the table."

So how bad is the state's economic climate? "Poor labor policies, high state debt, excessive government bureaucracy, and sky-high property taxes have combined to devastate New York's economic outlook. In fact, only six states in America impose higher property tax burdens than New York. Also of particular concern are punitive state and local tax rates on personal and business income. When you add New York City's income taxes to the state's onerous levies, individuals living in Gotham paid the highest income tax rates in America last year. If you include federal taxes, companies in the Big Apple paid the highest combined corporate tax rates in the industrialized world!"

This is the underlying reality to the clarion call in support the Ravitch plan-a scheme that would add tolls, a further boost in payroll taxes, and higher fares; and its supporters are busy excoriating senate Democrats who are resisting the further burdening of their already beleaguered constituents. Wouldn't it have made greater sense for Ravitch and Governor Paterson to subsume the MTA rescue within the recently concluded budget negotiations, so that the added tax burdens could have been devoted to transit needs?

Instead, we get a budget that's been brought to New York by the taxers at the Working Families Party; and a toll/tax plan on top of this, one that, once again finds the WFP out on the streets agitating for yet another hike-this time for really hard working families of motorists. You really can't get more irresponsible than this scenario.

Taxing Our Patience

What could be less surprising? The WFP, now joined by the UFT, is looking to continue its tax raisinf binge by pressuring recalcitrant lawmakers to enact an MYA bailout plan that includes tolls. Of course, the UFT is one of the prime movers behind the WFP in the first place, so its public emergence isn't really earth shattering. Here's the NY Post's take: "The city's powerful teachers union threw its weight into the MTA bailout mess yesterday, with its boss vowing to lobby "everyone we have to" in order to spare straphangers devastating fare hikes and service cuts."

But the teacher's union is, of course, one of the prime movers behind the kind of bloated budgeting that makes tolls a "necessity" in the first place. If there was more rationality-and sanity-in how we spend the public's money; and that includes education, than there wouldn't be the dire neeed to hit commuters as hard as the Ravitch plan does. But Weingarten remains oblivious to her own culpability: "Weingarten said she called Ravitch and Working Families Party chief Dan Cantor yesterday and said the UFT will "form a coalition" that will put pressure on legislators to pass the MTA plan. "Nobody likes or wants to create tolls on the bridges," Weingarten said. "At the same time, we need to have a solution, even if it includes tolls on bridges, to keep the fare near the level it is right now. "We can't have subway and bus fares spike the way they will if the Ravitch plan isn't adopted or something like it."

Which leavea the Post in somewhat an awkward position-after it spent the last few weeks tar babbying the UFT. Here's the paper's Saturday editorial on the UFT and the MTA: "The United Federation of Teachers honcho -- only hours after this page urged her to throw labor's considerable weight behind an effort to save the MTA -- agreed to do just that." But the Post is kinda cross pressured here, and adds the following-sotto voce, if you will: "So we're glad labor groups heeded our call yesterday and stepped in to fill the void (though doubtless a big bill will be presented in due time)."

Yah think? Which is precisely why the intrepid Carl Kruger has been suffering all of the slings and arrows on this issue: "But a small number of Democratic senators opposed tolls, while others opposed the payroll tax, making it difficult for amended versions to gain traction. Ravitch offered an amended plan, which would exempt some drivers from bridge tolls and impose new fees on cab rides and a boost in Manhattan garage taxes."

Still, the Post should be more circumspect here. Empowering the UFT and the WFP on tolls, is like teasing a large cat at the zoo-eventually it will strike out at you in ways you may live to regret. So, while Paterson continues to get feisty on tolls-and the Republicans eagerly wait to pounce; the UFT/WFP folks may live to regret their over reach into the tax payers/motorists wallets.

Mayoral Control Freaks

Once again, Mike Bloomberg is placing himself between the city-and the abyss that awaits if he's not at the helm to right the ship. The issue? Mayoral control of the schools-and the NY Post has the story: "Mayor Bloomberg predicted there would be "disaster in the classroom" if state lawmakers don't extend his authority to run city schools -- and blasted critics yesterday for wanting to return to an education system that served special interests rather than kids."

This might be what passes as truth on Planet Bloomberg, but Mike needs to take a chill pill-and come back to earth. No one is suggesting an awful recrudescence of Livingston Street. As Manhattan BP Stringer told the Post: "Manhattan Borough President Scott Stringer said Bloomberg should "take a deep breath" and support proposals like his own that would extend mayoral control with tweaks to engage parents. "To educate children, you need one person in charge -- and that's the mayor," Stringer said. "The struggle now is how you re-engage parents in the education of the children. This is to complement mayoral control."

But the mayor, not renowned for his flights of fancy, simply can't help himself when it comes any challenge to his own prerogatives: ""You'd have chaos if you don't renew this law -- which expires the end of June -- because I don't how you'd put the genie back in the bottle. I don't know how you'd recreate the bureaucracy," Bloomberg said on his radio show, referring to the old Board of Education. "And all of the money that we've taken out of the bureaucracy and put in the classroom would go right away out of the classroom and back into the bureaucracy," he said."

All this from a guy who's in charge of the 78% solution-that's the amount of increased budgetary expenditures we've seen in every year since Bloomberg took charge of education; on top of a top-down management structure that shuts out parents from meaningful input. So let's jettison the Bloomberg straw men-and while we're at it, how about tuning out all of the faux common man commercials which are just as sincere as his school pronouncements. A real debate needs to take place; the Bloomberg monologue is tendentious in the extreme.

Friday, April 17, 2009

Last Rites?

The governor made a big splash yesterday with his introduction of his gay rites bill; but as the NY post points out, it's not likely that the measure will pass any time soon: "Comparing his crusade to legalize gay marriage to the country's epic civil-rights struggles, Gov. Paterson yesterday hitched his falling star to a controversial, and likely doomed, bill to allow same-sex unions in New York."

What the gambit does do, however, is to put the Democratic majority in the state senate in a worse position than it already is-coming off a budget deal that raised both taxes and spending: "Religious leaders will fight hard to defeat the bill. Archbishop Timothy Dolan spoke against gay marriage Wednesday -- the very day he was installed as head of the powerful New York Archdiocese.The bill also faces an uphill state Senate battle. Several members of Paterson's party have come out swinging against it, including Ruben Diaz of The Bronx."

But Diaz isn't alone-and now, with Senator Onorato coming out against the bill, at least five Democrats are publicly opposed. Still, the advocates somehow believe that the governor's involvement will be a difference maker. As the NY Times reports: "Gay-rights advocates expressed confidence on Thursday that Governor Paterson’s personal involvement could make a difference, despite his dismal approval ratings and struggle to advance other aspects of his agenda. They said lawmakers sometimes feel less confined by partisan loyalty on civil rights issues like same-sex marriage."

This amounts to a good deal of wishful thinking; and the senate majority is unlikely to bend to the governor's will if it means the loss of their own power-something that support of gay marriage just might accomplish, especially in some of the swing districts where Democrats remain vulnerable.

Remarkably, the Times failed to even mention these political considerations in their piece-another example of the paper's failure to cover issues where their ideological heart is on their sleeve. Instead we get: "Mr. Van Capelle and other advocates pointed out that in 2002, 13 Republicans joined 21 Democrats to pass a law that specifically banned discrimination based on sexual orientation. The outcome of that vote was in doubt until the last minute — an uncommon occurrence in Albany, where the leaders of the Senate and the Assembly rarely allow bills to reach the floor without being sure they will pass. Some supporters of same-sex marriage, most notably Mr. Paterson, are pushing for a similar approach now. By forcing a vote without knowing its result, the logic goes, dubious senators might feel pressured to support the bill for fear of appearing hostile to gay rights."

We'll see. In our view, and we're by no means instinctively hostile to the effort of the advocates, the move is premature, and will only further weaken Paterson, without advancing the advocates cause on the same sex marriage issue.

Party Pooper

Say what you want about Chris Quinn, but you can't say that the woman lacks loyalty-at least not loyalty to the man who has helped her make all of the tough decisions over the past four years; and that would be her mentor, the intrepid Mike Bloomberg. So loyal is Quinn to her tutor, that she can't say that she will support the Democratic nominee for mayor come this November: "Council Speaker Christine Quinn told voters Thursday night she couldn't promise to endorse the Democratic nominee for mayor, leaving open the possibility the city's most powerful Democratic official could endorse Mayor Bloomberg. "After the democratic process, when we know who the two individuals are who are running, whatever lines they're running on, I'm going to pick the individual who I believe is best for the city and best for the mayoralty," Quinn said at the Chelsea Reform Democratic Club's candidate forum."

What's instructive about the Quinn statement, is that it is a clear exposition of what most folks have felt since she took over as the Democratic speaker of the city council: "Councilman Tony Avella, a longshot Democratic candidate for mayor, said he's not surprised by the comments. "She's been rolling over for Mike Bloomberg on almost every sort of issue that he's brought to the forefront in the City Council," Avella said. "She does what she's told by Mike Bloomberg - I think it's unfortunate that she's turned her back on the Democratic party."

So, it's hardly surprising that the man who she has slavishly followed-even to the extent of totally flipping, and overturning the term limits concept that she had touted as sacrosanct, is someone for whom she is holding out for come the fall's election. After all, if all of the Republican Party leaders can swallow their pride and accept the Bloomberg money, why can't the Deputy Mayor for Legislation remain consistent in her support of her once and future boss.

The one thing that would complicate this eventuality, however, is Quinn's desire to remain in her current post. Snubbing the African American candidate of her own party for Daddy Bloombucks might just be enough to inspire the supine members of the council into insurrection. Our belief then, is that despite her current Mary Wells quality obeisance to her guy, Quinn will eventually support the Democrat-in what will be one of the most historically tepid displays of such allegiance in the city's history.

Thursday, April 16, 2009

A Bridge to Nowhere

You've got to admire David Paterson's timing. On the day that New York welcomes a new archbishop, the governor announces his support for same-sex marriage; an anathema to the church. Not to be outdone, he goes on to attempt to resuscitate bridge tolls on tax day! And, in our view, neither proposal will either do Paterson any political good-in spite of Errol Louis' clarion call-nor will they successfully implemented into law.

According to Louis: "If Paterson is successful, the Empire State will become by far the most populous state to sanction gay marriage, joining Connecticut, Iowa, Massachusetts and Vermont. That would catapult Paterson into the national spotlight as a civil rights champion and shore up his sagging poll numbers in advance of next year's elections."This, I think, will be the defining moment in the governor's career," said Sen. Thomas Duane, the openly gay Manhattan pol who has gamely introduced a marriage equality bill year after year since 2001, only to see it die without so much as a vote in the state Senate. "I believe that we can win this year," he told me. "I don't want to lose, and I don't think the gov can afford to lose right now."

The thought of Paterson being catapulted anywhere is intriguing, to be sure, but we can't see how this act-one of desperation for the failing governor-will be politically expedient; and with four senate Democrats already saying, no way, the chances of the measure's passage in that body are dim indeed. And Louis also underscores another point; support for the concept is very slim in the city's black community-another political pitfall for the flailing governor.

The same fate awaits tolling the East River and Harlem River bridges. As the NY Post reports: "Bridge tolls are back from the dead. Gov. Paterson is again behind a plan that would toll 13 now-free East and Harlem river bridges at the current cost of a transit ride for all drivers -- about $2 -- except those crossing the spans for medical purposes or certain business-related reasons, officials said."

How has this revival been reviewed? "Sounds to me like the plans of a lunatic," said Sen. Carl Kruger (D-Brooklyn), who helped kill the first toll proposal. Kruger accused Paterson of "some type of memory failure" for including tolls in the proposal. Kruger dismissed certain elements of the plan, like the medical exemption, as "ridiculous." Do I now have to bring a note from the doctor and bring it to Richard Ravitch?" Kruger said. "It's a flight of mental instability and it sounds like the death rattle of a dying idea."

And, even with the tolls, the transit fares will be hike 8% under this new rescue plan incarnation. Doesn't seem to be tenable, now does it? As the NY Times reports: "Seeking to win over State Senate opponents of a plan to create new bridge tolls on the East and Harlem Rivers, supporters of a financial rescue for the Metropolitan Transportation Authority offered a compromise on Wednesday that would give toll rebates to drivers traveling to medical appointments and to businesses that frequently use the river crossings. But some opponents of the tolls — which would be set to match the subway fare, currently $2 — quickly rejected the compromise, which was put forth by the state commission that proposed the original rescue plan. “I am opposed to any toll,” Ruben Diaz Sr., a senator from the Bronx, said on Wednesday. “They’re going to do a rebate? After two years they’re going to say no rebate. It’s a gimmick.”

And to keep in tune with our theme here, why does the governor who wants to find an MTA rescue compromise, push forward on a gay rights bill that will alienate one of the senators that he's trying to woo? "I think that the governor should be involved doing this now and stop pushing gay marriage,” Mr. Diaz said. The governor is expected to offer legislation on Thursday to legalize gay marriage, something that Mr. Diaz, a Pentecostal minister, fiercely opposes."

So it appears to us, that the governor's attempt to demonstrate bold leadership on two controversial issues will afford him little in the way of new support-and will only, in the end, underscore the weakness of his leadership. It's a little late for him on the leadership front, and both these proposals smack of being political Hail Mary's.

Update

We missed the NY Post editorial on this same theme: "Instead, while professing renewed support for an MTA bailout, Paterson kicks down the door and lobs in a hand grenade -- gay marriage, the one issue even more divisive than tolling the East River and Harlem River bridges."

And the Post also makes the same point we had made about annoying Senator Ruben Diaz: "But he must realize that a key player in any debate is Sen. Ruben Diaz (D-Bronx) -- who last winter threatened to withhold support for Smith as majority leader unless he got assurance that gay-marriage legislation would not be brought up in the current session. Diaz is one of several senators wavering on an MTA bailout. Those tolls weigh heavy on his district -- and now he's got another reason not to play ball."

Who's giving Paterson advice nowadays? Newt Gingrich?

A&P Disrespects It Workers

The once proud A&P supermarket company-now the owners of Pathmark Stores as well-is rapidly headed right into the toilet; and it's hard to see hoe it will survive under the current mismanagement. The latest is the company's violation of state law on worker compensation. This is from a press release from our friends over at UFCW Local 1500:

"The United Food and Commercial Workers Union Local 1500, New York State’s largest Local Union representing grocery workers, is responding quickly and aggressively to A&P Supermarkets attempt to avoid compliance with New York State labor laws. A&P Supermarkets is refusing to comply with the New York State W.A.R.N. act which requires employers to pay workers wages for 90 days after announcing the closing of a facility. A&P recently announced the closing of the Pathmark Supermarket in West Hempstead, Long Island. A&P is the parent corporation of Pathmark Supermarkets."

A&P stiffing workers? Heaven forfend! Why aren't we shocked? Well, maybe its because we worked on behalf of these deadbeats to kill a Wal-Mart Supercenter right next to a Pathmark Store in Monsey, New York-and they wouldn't pay the last three months that they owed us; leaving some local suppliers that we used in the lurch.

At some point, however, this kind of reprobate behavior has to come back to haunt this failing enterprise-and, hopefully, Local 1500 will be the harbinger of its demise: "We are extremely concerned about our members who work in that store and will do everything within our power to minimize the effect this store closing has on our members and their families,” United Food and Commercial Workers Union Local 1500 President Bruce W. Both stated. “Additionally, I am outraged, though not surprised, that A&P would take such a callous position in regards to how they are treating our members and their families."

It's time that this once proud enterprise gave up the ghost. It is being run into the ground by lawyers and accountants; and the sooner real supermarket mavens are brought in, and the current pretenders evicted, the better for all-especially the hard working supermarket workers.

My Yuengeling, My Yuengeling

As we have said all along, the expanded bottle bill will lead to the destruction of smaller beverage companies in New York State-and the process may have already begun. As Beer Business Daily reports: "Yuengling Will Pull Out of New York if UPC Law is Passed." What this means for this popular niche brew, is that it can no longer justify selling its beer in New York with the added expense that the new bottle law mandates.

As Yuengling's manager told BBD: "Pat Pikunas wrote to BBD in an email that if these laws become effective (without being amended, which there is some talk of), then Yuengling is fully prepared to withdraw their products from the state of New York. You heard that right. Writes Pat: "I can tell you that Yuengling will be one brewery that will not comply with this provision in the legislation. In fact, we have discussed internally and come to the decision that we will pull our products for sale completely in the state, if we are forced legally to comply with NY specific UPC requirements. We realize that the potential implications of this decision are far reaching and large, but feel it would be necessary given the issues it creates. "

What's more foreboding even, is that there will be scores of small beer brands, water distributors, and soda bottlers who want to do business in NYS, but will find that the extra costs are not worth the effort-something that the folks at Good-O Beverage have already told Senator Espada who represents the neighborhood were the Hispanic brands are bottled.

As Martin Salo, Good-O's vice president, told the senator:

"Good-O Beverage Co is trying to digest the devastating impact that the passage of the Expanded Bottle Bill represents. Given the nature of these impacts, a number of options are under consideration. They are:

"1) Layoffs and the scaling back of our NY operations;


2) Withdrawal: Selling product entirely in the state of New Jersey because of the burdens imposed by this bill. This would necessitate closing our Boone Avenue facility (where we have been for 50 years) and move to New Jersey to concentrate on our "Out of Town" business sales in other states where our products are also sold and where severe regulatory burdens are absent;

3) A total sale and shut down of our brands, business and operations in NY and elsewhere."

The Alliance has begun to reach out to all small beverage companies that find themselves in Good-O's dire position. Every company that we've talked to tell us that the June 1st deadline is totally absurd-no one can retrofit their containers and labels to comply with that inception date. In addition, all of the folks we talked to said that the extra expense would make it difficult for them to sell affordable beverages; and that at the end of the day, the larger beverage companies would have an added advantage.

It should also be pointed out, that all of the water companies need time to devise a collection and redemption system for their empty containers. Unlike beer and soda, these firms deliver their products through food distribution warehouses, making back hauling impossible. Third parties will have to be retained, and a system put into place-something that can't be done in the available time frame.

Something's got to give here; and the clueless folks who engineered this fiasco-like out friend Laura Haight of NYPIRG-really were without any idea about how impractical the expansion format really is. We expect that there will be changes forthcoming. If not, there will be total chaos.

Wednesday, April 15, 2009

Five Borough Fraud

The city's Economic Development Corporation has announced that it's going to subsidize the expansion of Manhattan Beer-a company that's raking in the big bucks thanks to a monopolistic distribution system that insulates the company from any meaningful competition. Another indication, in our view, that the whole IDA edifice needs overhaul.

Here's the press release-thanks to the Observer's Eliot Brown: "“Helping our vital industrial companies to remain and expand in the City is one of IDA’s primary goals and creating jobs today is a foundation of the Five Borough Economic Opportunity Plan,” said IDA Chairman Seth W. Pinsky. “The benefits approved today will help to ensure that this growing New York City-based company continues to contribute to our important industrial sector by investing in an additional location and improved equipment and creating new, quality jobs for New York City residents. I am pleased that, despite obvious advantages offered by neighboring municipalities, Manhattan Beer chooses to stay in the City and that IDA can help to make that choice viable.”

Earth to Pinsky. Manhattan Beer wasn't going anywhere-and the use of these tax subsidies, when small businesses are hurting, is simply a total waste of our tax dollars. If this is the epitome of the Bloomberg five borough economic development plan we need to continue to hand out more food stamps.

Bottled Up Logic

According to Crain's Insider (subscription), there is some speculation that the expansion of the bottle bill to bottled water will be good for smart consumer choice: "Some see the new bottle bill less as a recycling measure than as a needed curb on bottled water. Bottlers say the law, which adds nickel deposits, will increase the price of bottled water by up to 70%. “Maybe more people will make the right consumer choice and not buy bottled water,” says Rob Moore of Environmental Advocates. “For people who decide to get ripped off, it will encourage them to recycle.”

This limited world view misconstrues the fact that the introduction of bottled water has led to many folks switching from sweetened soda to the healthier alternative. The concept that consumers choosing to buy bottled water are being, "ripped off," devolves from an elitist perspective that is hostile to free markets-and derisive of the idea that the folks know what's good for them. But, hey, that's the mindset behind all of the container deposit thinking.

Garbage In, Garbage Not Out

As the NY Post reported yesterday, the cost of disposing NYC's garbage is escalating: "Garbage costs are piling up. Moving trash from a Brooklyn transfer station to other states via rail instead of traditional garbage trucks costs $134 per ton -- up from $85 per ton last year, according to the city's Independent Budget Office."

So what should the city do? Why recycle more, of course: "So the city should consider more recycling, says IBO Chief of Staff Doug Turetsky. "While it has cost more to collect and dispose of a ton of recyclables than a ton of trash, the difference is narrowing as the cost of exporting garbage to landfills and incinerators outside the city rises," Turetsky said."

To which we say, Duh! But what has Mike's Marauders actually done in this regard. We recall fondly that when the city passed its SWMP the mayor called the waste disposal blueprint, "groundbreaking." Here's what we said four years ago when all of this breathless rhetoric was being used: "As part of the Mayor’s Solid Waste Management Program he is required to address how to increase the level of recycling. In the DOS report the administration’s proposals are called “groundbreaking” (bottom of page two) but in reality they are anything but. Aside from the usual refuge of the clueless: “better education,” there is absolutely nothing said on how to enhance recycling activity. In fact, the only way these proposals could be called groundbreaking is if the mayor is digging with a plastic spoon."

The one breakthrough of this administration is the so-called fair share initiative, the one where, although no real garbage reduction has been accomplished, everyone gets to experience the pain on a more or less equal basis. So instead of pain reduction-through real recycling diversion-we get the Gansevoort Recycling Center on Manhattan's West Side. As the mayor's court historian put it last year: "The plan represented Bloomberg's answer to the looming trash crisis he inherited after then-Mayor Rudy Giuliani closed the massive Fresh Kills Landfill on Staten Island. "This is a legacy project for the mayor," Deputy Mayor for Operations Edward Skyler told The Post. "We're fundamentally handling the way the city handles its garbage, to deal with it an environmentally friendly way and not pit communities against each other."

Not a word on waste reduction-or how many more tons these geniuses have diverted; so, four years later, we get the IBO's sage advice: the city should recycle some more. And not one word on organic waste, and for good reason, since there is no diversion plan for this expensive-to -dispose waste.

Which brings us to the private sector, and the DEP's sandbagging of the pilot program to permit food waste disposers at the city's supermarkets and restaurants. As we said earlier this year: "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."

So, with disposal costs escalating for both the public and the private sectors, the one methodology available that could divert thousands of tons a day-and save millions for both sectors-is abjured by stone stupid bureaucrats at the city's most dysfunctional agency. Yet this is the agency whose wisdom we're going to swallow whole?

And in the process, an innovative technology that could reduce operating costs for thousands of local businesses is thrown in the ash heap; while the mayor babbles on about his five borough economic development plan. How absolutely pathetic!

Sweet and Sour Politics

Ryan Sager has an interesting exposé on the Machiavellian nature of the efforts of Tom Frieden, the NYC Health Commissioner, to control what we eat: "Want a lesson in political cynicism, dressed up as concern for public health? Then grab the latest issue of the New England Journal of Medicine, and read city Health Commissar -- sorry, Commissioner -- Thomas Frieden's piece on how to line up support for a soda tax. His advice: Lure legislators with dollar signs -- but convince the public it's all about health."

Not that we weren't aware of this ploy from the very beginning of its introduction by Governor Paterson; after all, what kind of health measure is placed in a budget so it can generate revenues by not being an effective deterrent to behavior? By Frieden's candor is welcome-since it reveals the extent to which public health autocrats will go to control how we live: "The soda tax didn't make it into state law in the latest budget, but it's still a top priority for those like Frieden (the architect of the city's trans-fat ban) who think it's the government's role to tell all Americans what they can and can't put into their bodies."

And the good doctor believes that the tax can be revived because the folks are pretty clueless about what the tax actually means to do: "Poll results show that support of a tax on sugared beverages ranges from 37 to 72 percent," write Frieden and his co-author, a Yale professor of food policy. And when the public is clueless, you can easily manipulate it: "A poll of New York residents found that 52 percent supported a 'soda tax,' but the number rose to 72 percent when respondents were told that the revenue would be used for obesity prevention."

Which, says the manipulative meddler, is terrific in spite of the fact that this-in his view-is all a ruse because public education campaigns, you know the efforts to actually convince folks to alter some bad habits, are not normally successful: "A penny-per-ounce excise tax could reduce consumption of sugared beverages by more than 10 percent," Frieden claims. "It is difficult to imagine producing behavior change of this magnitude through education alone, even if government devoted massive resources to the task." We wonder what kind of reduction in usage would follow the threat of jail time?

And of course, Frieden knows that the money generated by a soda tax wouldn't be used for anything but budget fattening: "But if legislators are tempted by new revenue, it won't be because they want to spend it on new programs subsidizing veggies for kids (as Frieden proposes in the article). They'd use it, as happens with all funds supposedly "dedicated" to any one purpose, to plugging the state's multibillion-dollar budget gap."

So this is what passes as public health scholarship nowadays-pretty pathetic if you ask us. But, at the same time, no one is more qualified to pen this kind of sly sleight-of-hand duping of the public than the ultimate anti-business meddler-and it's the same rationale that Frieden used to promote menu labeling; and we can't wait to see the epidemiological study that emerges from this fiasco. Will it be done in time to grace the pages of a Bloomberg for Mayor brochure?-the only publication where it would pass peer review.

All we can say is that this kind of health intervention is likely to be the wave of the future-and particularly as more and more of our health benefits are controlled by the government. Remember the old maxim: He who pays the piper calls the tune.

Tuesday, April 14, 2009

Political Hermaphrodite

Thanks to Liz, we now know that Mike Bloomberg's political identity is, well, amorphous, to say the least. How else to explain his willingness to woo the Working Families line for the fall mayoral election? "Now that Mayor Bloomberg has locked down the Republican and Independence Party ballot lines in his reelection bid, he can turn his attention to a more elusive target: the labor-backed Working Families Party. Even as Bloomberg campaign aides worked to shore up GOP support, they have been quietly meeting with leaders of the WFP and key union officials whose votes will be crucial to landing the party's endorsement."

We know that politics makes strange bedfellows, but we never thought that the bed would be big enough for Mike Bloomberg and the "tax everything that moves," WFP: "One labor leader said Bloomberg's campaign has been "diligently working" the WFP's executive committee and "relentless" in its pursuit of union support. They've dispatched multiple emissaries to woo labor leaders."

All of which underscores, not that Mike Bloomberg is someone with independent political judgment, but that he is a political hermaphrodite who will align himself with anyone and anything that promotes his own self interests-which kinda describes the WFP if it decides to go with the man who seems to stand on the opposite side of the political divide from the "Millionaire Tax" Party. As the NY Times tells us this morning:

"Declaring that “we love the rich people,” Mr. Bloomberg has opposed capping executive pay, increasing the capital gains tax or raising income taxes on the wealthy. He has gushed about Treasury Secretary Timothy F. Geithner, saying he “walks on water,” and praised Henry M. Paulson Jr.’s Goldman Sachs rĂ©sumĂ©. Mr. Bloomberg, a billionaire many times over, has also vouched for vilified Wall Street titans like Richard S. Fuld Jr., the former chief executive of Lehman Brothers.“There’s Lehman Brothers, who I feel very sorry for,” he said during a news conference. “Dick Fuld, I’ve known for 40 years, who’s a competent guy, and people are criticizing him. They didn’t criticize him when things were going well for an awful lot of years.”

But the mayor thinks that all this means is that he makes no decisions based on purely political considerations-as if his own self perpetuation was an apolitical gift to New Yorkers: ""And I don't think anybody can put in the back of their minds the fact that we live in a real world where there is politics involved. And you might praise things or go to places. But any serious decision we've ever made has been without it. And I think you can just go back and take a look at a number of positions that I've taken which have not been politically popular, particularly when your newspaper is demanding I fire somebody or demanding I change my view."

Of course, with the newspaper marching in class step with their billionaire brother, we tend to believe Mike's view here; but that doesn't mean, however, that the Bloombergistas are making all the decisions strictly on "the merits." What it means often is that the mayor-belonging to a cohort of Wall Street brigands-simply decides stuff on the basis of his own narrow world view; one that is circumscribed by class and wealth. In this context, a healthy political perspective would be an improvement.

Mi Familia No Es Su Familia

The Working Families Party has got to get the prize for New York's most inaccurate political taxonomy-advocating on behalf of bigger government at the expense of some of the hardest working families in the state, the party needs to be renamed to better reflect its aims and objectives. But, even more importantly, New York's Democrats may soon be feeling the sting of voters because of their too cozy relationship with the party that is being seen as responsible for the recently concluded high tax, high spend state budget.

This is the theme of Jacob Gershman's analysis in the NY Post yesterday-and it could be seen as the handwriting on the wall: "WRACKED by a wicked hangover after a binge of wild budgeting, Democrats in Albany have opened their eyes to the behemoth lying in their bed and refusing to leave. It's the Working Families Party -- the left-wing coalition of organized labor and ACORN activists -- which seduced Democrats with its potent field operations and helped bring them to power in the Senate for the first time in generations."

This closeness could be particularly harmful for the slim majority Dems hold in the state senate: "Now, the WFP is demanding a long-term relationship -- to the alarm of Democrats, whose more moderate constituents back home are threatening to split. Democrats worry that the force behind their takeover of the Senate last year is sowing the seeds of their downfall."

There are perhaps four of five districts where Democrats could be vulnerable to the charge that they are the handmaidens of a group that holds the tax payers in contempt: "Privately, they fear that the backlash against the WFP-orchestrated state budget -- with its 9 percent spending hike and $8 billion in new taxes and fees -- has jeopardized their hold on at least three upstate seats, giving Republicans a dangerous opening."

The WFP, for its part, deserves credit for feeling the pride of authorship: "The WFP is warning Senate Democrats not to second-guess their choices. There's no turning back, says party chief Dan Cantor. "I think the Democrats should be worried. They should be praising the budget. You can't run away from your own decision," Cantor says. "If they run from it and let the Republicans misrepresent what just happened, then it gets tougher for them."

Misrepresent? Now what could Danny mean? Not that it was a good idea to grab the stimulus cash, not to keep tax increases down, but to increase spending and sock it to the already over taxed citizenry? That is, however, just what the Party means, and it believes that it is a winning political strategy: "And to Democrats nervous about the outpouring of rage from constituents, Cantor preaches a message of patience: "The society is drenched in anti-tax dogma, so it's understandable that making the case for a more just sharing of the burden is going to take some time."

This guy clearly hasn't seen how New York compares to other states-even to the one that used to be labeled Taxsachusetts. And just maybe the tax revolution that has launched the Tea Party phenomenon will be slower to tack hold in the liberal environs of New York, but even here a strong backlash from a public that is tired of being a big government piñata is not out of the realm of possibility-and certainly not in some of the state's swing districts. We'll see what 2010 brings; bu the part needs to be very careful here.

Monday, April 13, 2009

Tip of the Iceberg

Dave Seifman at the NY Post has underscored what we believe is endemic to the royal rein of Mike the First-the use of his vast fortune to suborn the democratic process. In the case that Seifman highlights the results will mean higher water bills for New Yorkers-count on it: "ONE of the newest members of the city's Water Board is going to have a hard time rejecting the administration's request for a 14 percent hike in water and sewer rates next month, because Mayor Bloomberg is appearing at a fund-raiser for the nonprofit she heads just two weeks later."

Who's the conflicted gal? None other than our old friend Marcia Bystryn, the head honcho over at the League of Conservation Voters: "The vote on what would be the third double-digit increase in water fees in as many years is scheduled for May 15. Just 13 days later, Bloomberg is supposed to attend the annual fund-raising bash of the New York League of Conservation Voters at Chelsea Piers. The executive director of the league is Marcia Bystryn, who was named to the seven-member Water Board on Dec. 17."

Where's the conflict here? Just follow the moolah-with the stated sum probably only scratching the surface of the mayor's money machinations: "But the mayor's attendance at her event isn't the only reason Bystryn might want to think twice about going against the administration. The largest individual contributor to her group's political action committee, Climate Action, is none other than Thomas Secunda, co-founder of Bloomberg LP. Records show he wrote a $20,000 check to the PAC on Nov. 12. The previous year he forked over $10,000."

So we now see just a glimpse of how Kermit the Mayor's green machine operates; and the rationale for the outpouring of environmental euphoria over Bloomberg's congestion tax becomes manifest. More evidence that the mayor's retinue is a product, not of love and affection, but of that old cash nexus.

Pinnochio Bloomberg

As the NY Times reported on Saturday, the mayor is threatened with an elongated nose if he keeps claiming that he's going to "create or save' 400,000 jobs over the next six years: "The optimistic note, which implies a net gain of 100,000 jobs by 2015, seems to contradict most projections of employment in the city, including those from the mayor’s own office. In January, the city’s Office of Management and Budget forecast that there would be fewer jobs in the city at the end of 2013 — nearly five years off — than there are now."

Really? We are shocked and dismayed that the mayor is, once again, playing fast and loose with the truth as he uses figures to flim flam New Yorkers about what he has done, and what he claims he will do, to make all of our lives better. From school test scores to economic forecasting, whenever Bloomberg speaks, it's best that you hold tight to your wallet-since the only real positive economic impact he has had comes, every four years like clockwork, from his periodic electoral spending sprees.

So as far as forecasting is concerned, even the TV weather folks do a better job-and that's a low bar indeed. The Independent Budget Office has a, well, independent, and more accurate forecast: "The city’s Independent Budget Office expects the job losses to continue until the middle of next year. After that, employment growth in the city will lag behind the national recovery, said George Sweeting, deputy director of the budget office. “The city went into this late, and we think it’s going to come out late,” Mr. Sweeting said. He added that according to his office’s forecast, “by the end of 2013, we’re still not back to where we were at the end of the first quarter of 2008.”

And just how does the mayor expect to carry out this economic legerdemain? With the same "five borough plan" that he touted during the last election cycle? And the last uptick in employment came after 9/11, with a resurgent Wall Street-a phenomenon unlikely to repeat itself any time son. And Bloomberg the Commoner doesn't want anyone to associate him too closely to the reviled financiers.

Apparently, according to the $100 million fable, this child of Wall Street was abandoned by his parents at an early age, and no longer wants to acknowledge this tainted paternity. Better to don shirt sleeves and pretend an affinity for the city's common folks-a pretense akin to Bernie Madoff claiming financial probity.

But nothing that has any close proximity to veracity is ever in the Bloomberg repertoire-and the same holds true for this latest nose lengthener: "Even if Mr. Bloomberg is re-elected, he would be out of office before his promise could be tested. And, as N. Gregory Mankiw, a Harvard economist, pointed out, he could always fall back on the phrase “create or save” 400,000 jobs. “Absent a parallel universe in which there was another New York City,” Mr. Mankiw said, there would be no way to measure how many jobs had actually been saved by Mr. Bloomberg’s actions."

The perfect scenario for a serial prevaricator, isn't it? And when you have $100 million to spend on the prevarication, what chance does the truth really have?

Schools for Scoundrels

We have been commenting for a long time about the overly hyped nature of the mayor's stewardship of our city's schools. Never has their been more hoopla-smoke and mirrors-over the supposedly stellar turn around performance of the schools under the Bloomberg regime, Sadly, the reality contrasts so strongly with the performance reality, that it reaches a level of consumer fraud; and the incisive evaluation of this performance by Diane Ravitch in the NY Times last week underscores exactly what we're talking about.

Ravitch tackles the twin Bloomberg/Klein myths-test score and graduation rates are up dramatically; myths that our new education secretary swallowed whole: "ARNE DUNCAN, the secretary of education, has urged the nation’s mayors to take control of their public schools so that they can impose radical reforms. He points to New York City as a prime example of a school system that made sharp improvements under mayoral control. Actually, the record on mayoral control of schools is unimpressive. Eleven big-city school districts take part in the federal test called the National Assessment of Educational Progress. Two of the lowest-performing cities — Chicago and Cleveland — have mayoral control. The two highest-performing cities — Austin, Tex., and Charlotte, N.C. — do not."

So what about the test scores? As Ravitch points out (and as we have tried to highlight for a while): "On the federal National Assessment of Educational Progress — widely acknowledged as the gold standard of the testing industry — New York City showed almost no academic improvement between 2003, when the mayor’s reforms were introduced, and 2007. There were no significant gains for New York City’s students — black, Hispanic, white, Asian or lower-income — in fourth-grade reading, eighth-grade reading or eighth-grade mathematics. In fourth-grade math, pupils showed significant gains (although the validity of this is suspect because an unusually large proportion — 25 percent — of students were given extra time and help). The federal test reported no narrowing of the achievement gap between white students and minority students."

Yet Mr Duncan, just like the toadies who own the city's tabloids, waxes eloquent, demanding that the mayor keep control-or else allow the poor kiddies to sentenced to education hell: "Mr. Bloomberg’s allies say that the results of the current system are so spectacular that the law should be renewed without change. Secretary Duncan agrees: “I’m looking at the data here in front of me,” he said while in New York. “Graduation rates are up. Test scores are up ... By every measure, that’s real progress.” It sounds good, but in fact no independent source has verified such claims."

Of course, like all C students, the mayor and his sycophants would like to be able to mark their own exams: "The city’s Department of Education belittles the federal test scores and focuses on the assessments given by New York State. And, indeed, the state scores have soared in recent years, not only in the city but also across New York state However, the statewide scores on the N.A.E.P. are as flat as New York City’s. Our state tests are, unfortunately, exemplars of grade inflation." Ask the teachers about the nature of these tests.

But more kids are graduating, right? Here's another are where, if this was the marketing of a product for sale to the public, the Better Business Bureau would be called on to intervene in order to expose consumer fraud: "The graduation rate is another area in which progress has been overstated. The city says the rate climbed to 62 percent from 53 percent between 2003 and 2007; the state’s Department of Education, which uses a different formula, says the city’s rose to 52 percent, from 44 percent. Either way, the city’s graduation rate is no better than that of Mississippi, which spends about a third of what New York City spends per pupil."

And keep in mind that this performance level is being achieved with a budget that is 78% higher than when Bloomberg first came into office in 2002. It should also be pointed out, that the graduation rates-as dubious as they appear to be-are actually tinkered with: "Moreover, the city’s graduation rates have been pumped up with a variety of dubious means, like “credit recovery,” in which students who fail a course can get full credit if they agree to take a three-day makeup program or turn in an independent project. In addition, the city counts as graduates the students who dropped out and obtained a graduate-equivalency degree."

But rates are just that; indicators of those who are given diplomas, but not great indicators of whose being actually educated: "Even those who manage to graduate from our high schools are often not ready for college. Three-quarters of the graduates fail their placement examinations at the City University of New York’s community colleges and require remediation in basic skills. These are students who presumably passed five Regents examinations to graduate yet cannot read or write or do mathematics up to the standards of a two-year community college. This reflects as poorly on the Regents examinations as it does on the city’s promotional policies."

So what needs to be done? Ravitch rejects the straw man arguments of the mayor's claque-folks who see any diminution of Bloomberg's dictatorial control as a swift passage back to "the bad old days." What she sees most needed is a system of checks and balances" "This is not to say that Albany should eliminate mayoral control — nobody wants to return to the status quo of the ’90s. However, as legislators refine the law, they should establish clear checks and balances. The mayor should be authorized to appoint an independent Board of Education, whose members would serve for a set term. Candidates for the board should be evaluated by a blue-ribbon panel so that no mayor can stack it with friends. That board should appoint the chancellor, and his or her first responsibility must be to the children and their schools, not to the mayor."

Transparency and independent review-two desiderata that we have said are key-are Ravitch's watchwords: "Not every school problem can be solved by changes in governance. But to establish accountability, transparency and the legitimacy that comes with public participation, the Legislature should act promptly to restore public oversight of public education. As we all learned in civics class, checks and balances are vital to democracy."

The Ravitch critique-and Andy Wolf's as well-should inform the Albany debate; and the loud and boisterous sycophancy of the local papers should be eschewed in favor of a systematic reform that check mayoral excess while giving the public the kind of accurate information it can use to properly evaluate just how well the schools are functioning. Anything less, simply perpetuates the current schools for scoundrels milieu that the flim flammers would like us not to see.

Coming Soon: The NYPIRG Tax

No one deserves more credit-or blame-than NYPIRG, the inappropriately named New York Public Interest Research Group, for the expansion of the state's bottle law; the group's website promotes it, and the omnipresent Laura Haight, NYPIRG's lobbyist was the prime mover for the legislation. So, once the bill does to into effect-it adds water, a "NY Only" label, an additional penny and one half for handling, and a clause that lets the state take almost all of the unredeemed deposits-and the cost of water rises by over 50%, along with a minimum $2/case rise in the cost of beer and soda, the resulting increase must be labeled, the "NYPIRG tax."

For it was NYPIRG that, while it promoted the expansion, was able to drown out the chorus of voices telling the governor and the legislature that the newly expanded measure would sock it directly to the state's beverage consumers. But it won't be beverage consumers alone who will bear the brunt of this ill conceived policy. The unintended consequences of the law will be that scores of small beverage manufacturers and distributors will be faced with the kind of additional costs that will put many-if not the majority-on the verge of extinction.

Which is precisely what happened in 1982 when the bottle law was first passed. At the time , there were many smaller niche soda brands that were being sold at reduced cost to price conscious consumers. C&C, Shasta, and White Rock were all over the place-along with smaller beer brands such as Schmidt's and Pabst. To find these brands now you need to be an urban explorer.

As city stores were forced to find the space for mandatory redemption, they began to eliminate smaller brands-since the larger soda companies could provide them with a full range of flavors, thus obviating the need for additional space constraining bags and boxes for those smaller brands' empties. The same process will soon repeat itself since the regulatory costs of expansion will hurt the smaller brands disproportionately.

Asking a small woman and minority owned company like Top Pop to have a separate New York label and UPC code-and to do so by the totally impractical June 1st inception date-will add so much expense that it will be unable to continue to provide affordable drinks to low income consumers; a death sentence for the company. Similarly, Good-O Beverage, the largest Hispanic operated soda company in the area, uses the unredeemed deposits to be able to distribute full goods and collect empty containers in a cost effective manner. As with many of these smaller soda companies, the unredeemed deposits are a lifeline to marginal profitability.

As a result, if the law is not appropriately amended to address these issues, there will be an exodus of small and minority owned soda companies from the area-in effect enhancing the market share of all of the big players. As for all of these big players, there's unanimity: the costs will be great and they will be bone by consumers.

And since the majority of beer and soda consumers tend to be lower income folks, what we will see is a massive regressive tax; and we're not even taking into consideration the increase in the state's beer tax that was included in the recently negotiated budget. As last week's Times Union article pointed out: "The idea behind the separate UPC code, say those familiar with the legislation, was to prevent people from collecting deposit refunds in New York for bottles they bought in neighboring states, such as Pennsylvania or New Jersey, that did not charge a deposit. Brewers also will need to establish separate labeling and distribution for beer to be sold in New York. "We're going to have to change our labeling, and that's going to be a costly factor in the equation," said David Katleski, president of the New York State Brewers Association, who operates Empire Brewing Co. in Syracuse."

And the costs will escalate all across the board; and we're predicting that the $4 case of water will soon become a relic-an artifact of a bygone era; with $7 or $8 case prices becoming the norm. So when small brewers, soda bottlers and distributors close-and when the price of your favorite beverage goes through the roof-you can give a big shout out to Laura Haight of NYPIRG, the queen of the anti-business zealots, and the champion of regressive taxes for all poor New Yorkers.

Saturday, April 11, 2009

Unshared Sacrifice

The mantra of the tax and spenders is, of course, "shared sacrifice," a slogan bereft of its real meaning after it has been squeezed through an ideological blender by the Working Families Party. As the Wall Street Journal highlights: "In New York, Assembly Speaker (and de facto Governor) Sheldon Silver and other Democrats will impose a two percentage point "millionaire tax" on New Yorkers who earn more than $200,000 a year ($300,000 for couples). This will lift the top state tax rate to 8.97% and the New York City rate to 12.62%. Since capital gains and dividends are taxed as ordinary income, New York will impose the nation's highest taxes on investment income -- at a time when Wall Street is in jeopardy of losing its status as the world's financial capital."

But this income tax heist isn't the end of the legislative high jacking: "Oh, and it isn't just high earners who get smacked. The new budget raises another $2 billion or so on top of the $4 billion in income taxes with some 100 new taxes, fees, fines, surcharges and penalties to be paid by all New York residents. There are new charges for cell phone usage, fishing permits, health insurance (the "sick tax"), electric bills, and on bottled water, cigars, beer and wine. A New York Post analysis found that a typical family of four with an income below $100,000 would pay more than $800 a year in higher taxes and fees."

So New Yorkers at all levels of the wage scale will be hit-even while the federal stimulus money is used to increase government spending in an economic meltdown. But, as taxes hit all up and down the income ladder, we at least have achieved a sharing of the pain, right? Well, not quite; as it turns out, the cheerleaders for higher taxes and for the sharing of sacrifice have been themselves granted immunity: "This is advertised as a plan of "shared sacrifice," but the group that is most responsible for New York's budget woes, the all-powerful public employee unions, somehow walk out of this with a 3% pay increase. The state is receiving an estimated $10 billion in federal stimulus money, and Democrats are spending every cent while raising the state budget by 9%. Then they insist with a straight face that taxes are the only way to close the budget deficit."

All of which is a road to ruin for the state's once great economy-with the over reliance on Wall Street an artifact of history: "And so Albany is about to make a gigantic gamble on New York's economic future. The gamble is that the state with the highest cost of doing business can raise taxes on everyone who lives, works, breathes, eats or drinks in the state and not pay a heavy price for it. If they're wrong, New York will enhance its reputation as the Empire in Decline State."

Only when the state gets a real leader, someone who can represent New York's forgotten men and woman-the tax payers and small business owners-will be able to emerge from the fiscal morass that pawnshop politicians have gotten us into. 2010 can't come soon enough.

Thursday, April 09, 2009

Anne on the Money

In a Viewsday post, Anne Michaud made the following crucial point: "Here's a question for those of you keeping score at home. Why is New York's $132 billion state budget so much larger than those of other big states? California has nearly twice the population, with 36 million residents (New York is home to 19 million). But the Golden State's budget this year is $110 billion. Texas, which has a population of 23 million, is getting by on $91 billion annually."

Why indeed. Which makes ersatz all of the WFP palaver over the notion of "fair share." The issue is that New York State is an overly large and bureaucratic enterprise that needs to be cut down to a more manageable size before Leviathan gobbles up all of our tax dollars and sends business packing out of state. With Wall Street down, and maybe out, the old cash cows are gone-and with them, we need to jettison the sacred cows of wasteful spending and ruinous taxation.

This, obviously, is a task that is way beyond the capabilities of our current accidental governor. As the NY Post observes this morning: "Gov. Dave, on the other hand, has things exactly backward: Albany agreed on a new budget last week without making any economies whatsoever...Now, in his year-plus in office, Paterson has folded like a Japanese fan so often that it's hard to know where this will end."

And, as Michaud points out, this wastefulness can be partially attributed to New York's penchant for having what seems to be a government entity on every street: "What is it about New York that sends the numbers soaring? Is it because we have so many small governments -- sewer, water and fire districts, towns and villages -- layered on top of one another? Surely, it must cost more to maintain that infrastructure. Are we getting better services for our money here?"

So let's can all of the fair share BS, and focus on the real problem-a big wasteful government that burdens all tax payers with an unfair looting of their hard earned dough. Now rectifying that situation would be real social justice!

Sweet Science?

The city's Busybody-in-Chief is back at it. Our Health Commissioner Tom Frieden is once gain out to do damage to the city's small businesses at a time when they can least afford any of his no nothing bureaucratic meddling. This time, it's not salt that he's after, it's sugar-leading us to wonder if the good doctor will soon be monitoring everything that we decide to put into our own mouths. As the NY Times reports: "A month after Gov. David A. Paterson dropped his proposal for a soda tax, New York City’s health commissioner has written an article advocating “hefty” taxes on sodas and sports drinks containing sugar. Such a tax, the article said, could be the biggest boon to public health since tobacco taxes."

This is the same guy who, with absolutely no scientific evidence to back it up, claimed that lowering the salt intake of New Yorkers would, "...lower health care costs and prevent 150,000 premature deaths every year.” This guy quack more than the AFLAC duck-making absurd claims with no back-up. But why should he have to? After all, he's given carte blanche by Mother Bloomberg to conduct experiments on unwilling New Yorkers without their consent.

The reality here is that if there was a Nutrition Czar who could, through edict and fiat, determine everything you could legally consume, you might be able to lower health costs and prevent a certain number of premature deaths. The collateral damage to our basic liberty would, however, be far greater-and Frieden's so-called health initiatives are an integral part of a political project that wants to reduce us all to unthinking subjects. And if the federal government takes over health care in this country, this is what we will have in store: the Dr. Friedens of the world telling us how we need to behave if we want to access the "benefits" that the government offers.

And, as he does always, Frieden eschews the "too difficult" task of education and public scolding: "It is difficult to imagine producing behavior change of this magnitude through education alone, even if government devoted massive resources to the task,” said the article, published in the journal’s April 30 issue and released online Wednesday. “Only heftier taxes will significantly reduce consumption.”

Message to Frieden: if "heftier taxes" lead to lay offs and resultant job loss it will be a decidedly unhealthy outcome for New York. And this would be on top of the loss of our basic freedom to decide what we'd like to eat and how we want to live-something that Frieden feels is insignificant in the pursuit of his Brave New World vision of healthy living.

IDA: Badly in Need of Reform

NYC hands out huge IDA benefits, generally to large companies that would probably be able to move forward without the city's help. The latest such example is Manhattan Beer's IDA application for a warehouse it wants to build in the Bronx. Suffice it to say, that we will be holding no fundraisers for Simon Bergson and his extremely successful distribution business:

"The Company services over 24,000 accounts in fifteen counties in New York State and employ more than 1,400 people during the peak summer months. Manhattan Beer operates out of approximately 1.2 million square feet of warehousing space, with locations strategically located throughout its distribution area. The Company has increased its volume growth by 88% over the past 10 years and is continuing its expansion. Manhattan Beer is seeking a new distribution center to target its ever expanding clientele in Manhattan and the Bronx."

No charity case here. Basically Manhattan Beer holds a monopoly over the distribution of hot beers such as Coors and Corona and, due to the concentration in both production and distribution of malt beverages, it is able to operate with significant profit margins-while, at the same time, its customers, the bodegas and neighborhood supermarkets, are suffering without any hope for relief from the public sector.

So how much are we the public in for? Here's the damage: "Costs to City: New York City taxes to be exempted:

Mortgage Recording Tax: $ 316,388

Sales Tax Exemption 109,000

Building Tax Exemption (NPV, 25 years) 8,125,352

Land Tax Abatement (NPV, 25 years): 831,425

Maximum Total: $ 9,382,165"

But don't go expecting that the price of a six pack of your Corona will be reduced-or even that it will stay at current price levels. That's because these IDA bennies come with virtually no give backs to the tax payers that are forced to pony up; and there's little apparent due diligence investigating whether, absent the public money, a company like Manhattan Beer would refuse to build. To us, this is corporate welfare in its most egregious form.

Which brings us to the situation over at the Kingsbridge Armory, where Related Companies are in line for a sweet IDA boost: "Yet another developer in New York City is asking for millions of dollars in tax exemptions. On March 5, the Related Companies will ask the New York City Industrial Development Agency (IDA) for a huge tax break to redevelop the Kingsbridge Armory. The company is actively refusing to negotiate with the Bronx community and guarantee basic outcomes, such as good, living wage jobs for local residents, vital community space and quality retail shopping opportunities."

Now Related has been the most favored of all NYC developers-having been handed over the development rights to the old Bronx Terminal Market for seemingly less money than Peter Stuyvesant gave the Indians for the island of Manhattan. And when it couldn't live up to its bid on the Bradhurst Development project, the Bloombergistas salted the deal with an additional $5 million subsidy.

But most egregiously, these awards are given with no strings attached; and, as the Norwood News points out, Related got the IDA monies with no requirement that it provide living wages to the employees that will be working at the Armory retailers. As the leaders of KARA, the community coalition fighting for a meaningful CBA from Related, told the Norwood readers: "At the hearing on March 5, members of the IDA will discuss Related Companies’ application for more than $13 million in tax exemptions for the Armory project. We believe that these tax exemptions should be considered only if the Related Companies sits down with our coalition to negotiate community benefits for the Bronx. Our elected officials should also support our call for a Community Benefits Agreement in exchange for any tax breaks."

And this sentiment was echoed by Stuart Appelbaum, the president of the Retail, Wholesale, Department Store Union in his testimony before the IDA board: "Let me be more clear – the coalition that I stand with today wants this development to happen, but it must happen in a way that not only profits the developer, but serves the needs of the Bronx community. Unless we have guarantees that this development will be an economic opportunity for workers and residents in the Bronx, we cannot justify millions of dollars in tax exemptions for the project."

But the pleas of Appelbaum and the community fell on deaf ears-and the IDA benefits were awarded in carte blanche fashion: "When it was time to vote, all but two board members, Comptroller Thompson and Manhattan Borough President Stringer, voted in favor of giving Related $17.8 million in tax breaks."

So, enough is enough. Clearly, we have an IDA process that's badly in need of reform. Which is why a coalition of groups has come together to reform the IDA process. As one of the group's leaders says: "Just as importantly, these programs must require businesses that benefit from IDA tax breaks to pay fair wages to their employees. New York’s families should not be forced to tap already depleted Medicaid or welfare programs, at the expense of taxpayers, when they are working for companies that benefit from these tax breaks."

A bill to do just that has passed a senate committee and deserves to be swiftly passed so that the corporate giveaways can be reformed in favor of rank and file workers that are too often exploited by retailers who are occupying land that has been developed through generous tax subsidies. Here's what the bill's original sponsors have said: "“Companies should not be getting tax breaks to create jobs that pay so little that the people who get the jobs are eligible for public programs like Medicaid or food stamps,” said Senate Labor Committee Chair George D. Maziarz (R-Newfane), sponsor of the legislation in the Senate. “When we give tax breaks, or other subsidies, we should make sure our communities are benefiting from them.”

And when we award a tax subsidy, the awarding agency usually details what it claims are the collateral benefits-jobs, tax revenues, etc.-that the project will generate. There is, however, no requirement for the subsidizers to gauge the project's collateral damages. And in the Armory's case, if Related decides to put a food use into its mall, there will be a considerable negative impact on the contiguous neighborhood supermarket-a store that has been in the community for over fifty years! Does it make any sense, let alone is it equitable, for the city to subsidize uses that will put existing tax paying businesses at risk? The entire process is badly in need of an overhaul.

Now that the Democrats have taken control of the senate, the IDA reforms are thankfully closer to fruition. All we can say is, that it's about time for a change.

Wednesday, April 08, 2009

Money Talks

There are two items in today's Politicker that should generate, at least among the cognoscenti, the smell of money; and all of this, of course, goes right back to the ultimate monetary source: Mike Bloomberg's wallet. The first item involves the re-election of Councilman James Sanders: "Michael Bloomberg held a fund-raiser last night for Democratic City Councilman James Sanders of Queens, according to campaign sources. The event, I was told, took place at Bloomberg's townhouse. Sanders is a natural choice for Bloomberg to back. The councilman voted to support the term-limits extension and was the only Council member to abstain on an amendment that would have required the measure to go through a public referendum. The amendment failed to get a majority."

Now in England another word for money is "quid." So it is understandable that in the case of James Sanders, the quid in this case is part of a quid pro quo-with the cash nexus integral to the development of reciprocal obligations. How is this any less unseemly than if the fundraiser was hosted by a local business interest? Once again, Bloomberg bucks determines what the public interest is.

The same holds true for this next item: "Brooklyn Hispanic Chamber President for Bloomberg." What's remarkable here, is that there is no one less supportive of small Hispanic retailers than Mike Bloomberg-the man who once famously described the loss of $250 million to the bodega tax as, "a minor economic issue." And what exactly has Bloomberg done to address the crisis of the bodegueros?

So Rick Miranda is supporting the mayor, because? Maybe it's the commercial real estate tax that he levied in 2002? Or, perhaps, the way in which his policies have spurred an exodus of Hispanic owned supermarkets from the city? It couldn't have anything to do with Bloomy bucks, now could it?

Bloomberg's House of Commons

Now we've seen it all, Mike Bloomberg being sold to New Yorkers as the common man-just the start of what promises to be the most expensive campaign in city history: "Eight months before the election, Mayor Michael R. Bloomberg is unleashing the first wave of what could be biggest and most expensive political advertising campaign in the city’s history...Like his previous campaign ads, the mayor’s commercials are polished spots, with the skyline as a backdrop. They feature Mr. Bloomberg, his trademark jacket and tie swapped for a casual button-down shirt, talking to ordinary New Yorkers about their financial woes."

And here's the NY Post's take: "Portrayed by his rivals as an out-of-touch billionaire, Mayor Bloomberg is hitting the airwaves today with a campaign ad that shows him in casual clothes interacting with everyday New Yorkers. "The economy is in trouble," the mayor declares in the 60-second ad. "I hear it. I hear it when I take the subway. I hear it when I walk the streets and neighborhoods. But we can do something about this. We are going to come out of this."

Yo Mike, let's grab a beer! This has got to be the biggest case of consumer fraud since Crazy Eddie polluted the airwaves over two decades ago-a classic example of misdirection funded by a curiously insecure man who feels that, even after eight years in office, he needs to spend millions to educate the folks about his virtues. As the Times points out: "The use of the commercials, set to run over the next two weeks, highlights the mayor’s staggering financial edge in the race and his willingness to draw on his personal fortune to spend whatever it takes to win a third term. The $3 million cost of the ads exceeds the combined spending by all of his Democratic rivals since the start of the current election cycle, in 2006. And it represents nearly half of what the city’s campaign finance laws allow each of his challengers to spend on the race between now and their party’s primary in September."

Putative rival Anthony Weiner hits the mark about all of this extravagant rodomontade: "After eight years in office, they obviously feel this is necessary,” Representative Anthony D. Weiner said. “The question should be, why? I imagine they feel that a lot of New Yorkers are not very content about the direction the city is going. The middle class and those struggling to make it obviously need to be sold very, very heavily on the idea that Mike Bloomberg has been a good mayor.”

Or, perhaps they feel that the populist wave of anger against all of Mike Bloomberg's former Wall Street friends, will be directed at the city's richest man. In any case, be prepared for all manner of hyperbolic excess as the campaign unfolds. After it's all over, will New Yorkers be convinced that Mike Bloomberg is simply just like the rest of us? And will they firmly believe that the city's term limits law needed to be transcended so that Bloomberg could save us in our time of crisis?

Anything's possible when you have $100 million to spend on re-education. We just can't wait for the soon to be displayed tattoo, the final symbol of the transformation of the out of touch Bloomberg into Mr. Neighborhood.

Comrade Carl

The Village Voice's Tom Robbins pens a satiric piece on the activities of the "revolutionary" Senator Carl Kruger, and his role in thwarting the MTA. Instead of reading as if irony was its underlying theme, however, the article actually appears to laud Brooklyn's own populist icon; calling him, "Vanguard of the Senate Revolution:"

"Carl Kruger, state senator from Brooklyn's most southern reaches, barreled up the thruway to Albany last week in his black 2008 Cadillac sedan. He was in a hurry to get there because, thanks to the Democrats finally winning control of the State Senate this year—Hurray! Power to the People!—he has a great deal to say these days about bills and budgets. This influence stems from his new position as chairman of the mighty Senate Finance Committee. In fact, now that this blessed new day has dawned, and the Senate is no longer a Republican graveyard of progressive hopes and dreams, Kruger is the people, and the people have finally got the power."

Robbins goes on to describe Kruger's role in the attack on the MTA monolith: "The Chairman is 59 years old, built like a fireplug, and the possessor of a Brooklyn mouth that roars. Here he was late last week, thundering on the telephone about this latest attack on the people: the push to charge tolls on drivers crossing the East River..."This is not just a battle over the so-called Ravitch rescue plan for the MTA," says Kruger, biting off his words like Hugo Chávez firing up the masses. "This is a feeding frenzy by the Manhattan elite at the expense of the outer boroughs!"

Well, we can't quite see the Chavez comparison, but what Robbins is missing in his attempt at a satiric belittlement, is the fact that there are a lot of folks-particularly in the 27th senatorial district-who think that the tolling of the bridges is a redux of the Bloomberg congestion tax; and, yes, it is a brainchild of the Manhattan liberal elites to boot. Let's not forget that the congestion tax was wildly unpopular, and that most folks see the MTA, and not the recalcitrant senators like Kruger, as the real enemy.

And in his mocking of the senate Dems-and Kruger's-ascension to power, Robbins appears to elide subtly from satire to unavoidable praise: "Thanks to the people's victory at the polls last fall, this is not empty talk. Kruger now commands the vast arsenal of legislative weapons enjoyed by the Senate majority—weaponry that was once aimed at the people's interests by Republican reactionaries, but which is now rightly aimed at their true enemies."I am prepared to use the full subpoena power of the finance committee," said the Chairman. His target? Nothing less than the MTA itself. "The goal is to have them open their books, pull up the venetian blinds, and shed some sunlight on that dark and musty entity that they call the MTA," he said."


Are we missing something here? Is our friend Tom really mocking the idea that the MTA is an enemy of the people? And Robbins goes on to underscore what is, at least for a great many outer borough folks, a legitimate source of their anger-at both tolling the bridges and the MTA: "Part of his anger at the agency, the Chairman acknowledges, is personal: The district he represents has long been shortchanged by the mass transit system. True, as the blatantly pro-MTA Daily News pointed out last week, there are 20 subway stations in the neighborhoods Kruger represents, serving some 109,000 riders daily. But, as the Chairman understands, the personal is political. What the newspapers don't tell you is this sad fact: "When they built the subways, we were not only ignored, we were treated like we didn't exist," he says. "We have an antiquated bus network that drops us off at the Flatbush Junction. That's it."

Anyone living in South Brooklyn neighborhoods like Mill Basin, Gerritson Beach and Georgetown, will spend around two hours getting into the city if they opt for mass transit-a bit longer than it takes us to drive up to Albany! So for the Krugerites, this mockery is their reality; and the MTA lies at the center of the controversy: "Because of this second-class-citizen status, local residents like the Chairman must rely on vehicles like his mighty Cadillac to get around. Not to say he doesn't sometimes use a Metrocard..."Do I have a Metrocard? Yes, I do," he told us last Thursday, moments before the Post pranksters caught up with him. "Sometimes it goes empty. My most use is not so much the subway because the subway takes me nowhere."

Which is precisely what many Brooklynites feel. So Robbins needs to sharpen his satiric subtlety; because when satire strays to close to reality it loses its bite-and the attack on Kommandant Kruger slips easily into something else: a paean to someone who has stood up to Speaker Silver and the rest of the liberal establishment when no one else would or could.

Tuesday, April 07, 2009

Dr. Frieden, Bloomberg's Super Nanny, Isn't Worth His Salt

There's a fascinating article in the NY Times by John Tierney on the New York City experiment with reducing salt in our diets; and the piece underscores the unscientific, and frankly frightening, methods employed by the good doctor in his pursuit of a liberal fascist Valhalla. The headline says a lot: "Public Policy That Makes Test Subjects of Us All."

Having gotten away with his arbitrary calorie counting assault on fast foods-and the businesses that purvey them, Frieden, Mike Bloomberg's Nanny in Chief, now is looking for more guinea pigs to socially experiment on:

"Suppose you wanted to test the effects of halving the amount of salt in people’s diets. If you were an academic researcher, you’d have to persuade your institutional review board that you had considered the risks and obtained informed consent from the participants...But if you are the mayor of New York, no such constraints apply. You can simply announce, as Michael Bloomberg did, that the city is starting a “nationwide initiative” to pressure the food industry and restaurant chains to cut salt intake by half over the next decade. Why bother with consent forms when you can automatically enroll everyone in the experiment?"

It was exactly so with his fast food assault. Armed with no scientific data from peer reviewed efficacy studies-but bolstered by the propagandistic pretensions of a bunch of unscientific busy bodies from Center for Science in the Public Interest-Frieden proclaimed that posting calorie counts on menus would save countless lives. Well, he's back: "And why bother with a control group when you already know the experiment’s outcome? The city’s health commissioner, Thomas R. Frieden, has enumerated the results. If the food industry follows the city’s wishes, the health department’s Web site announces, “that action will lower health care costs and prevent 150,000 premature deaths every year.”

Was there ever a bigger medical fake, phony and fraud than this quack? But Frieden's intervention in our lives is sanctioned by the great medical maven himself-Dr. Mike Bloomberg, a man whose scientific and medical knowledge has been nurtured through osmosis; and by ostentatious donations to the John Hopkins Bloomberg School of Public Health. And the danger lies in the fact that these two fakers have the power to coercively tell people how to behave. All for their own good, of course.

But what does the extant work on salt suggest? According to Tierney, you might be a bit surprised: "You might, for instance, take note of a recent clinical trial in which heart patients put on a restricted-sodium diet fared worse than those on a normal diet. In light of new research suggesting that eating salt improves mood and combats depression, you might be alert for psychological effects of the new diet. You might worry that people would react to less-salty food by eating more of it, a trend you could monitor by comparing them with a control group."

The fact here is that no one has any idea how people will react to less salt in their diet-just as Friedberg had no clue what the impact of calorie posting would be, aside from knowing that it would be fun to force small businesses to spend thousands of dollars in jumping through bureaucratic hoops: "No one knows how people would react to less-salty food, much less what would happen to their health."

So what's the problem here? The problem lies with the way that the Friedberg's of the world want to impose their life style choices and social views on others-damn the scientific evidence when you're one of the chosen true believers. And it's a slippery slope from this kind of imposition, to others that are far less benign; even while appearing to be imposed out of genuine love and concern for the well being of the masses.

This is precisely what Tocqueville called "soft despotism," a paternalistic lassitude that saps the liberty of a people: "In Democracy in America, Tocqueville suggested that democracy was capable of breeding its own form of despotism, albeit one without the edges of Jacobin or Bonapartist dictatorship with which Europeans were all too familiar. The book spoke of “an immense protective power” which took all responsibility for everyone's happiness-just so long as this power remained “sole agent and judge of it.” This power, Tocqueville wrote, would “resemble parental authority” but would try to keep people “in perpetual childhood” by relieving people “from all the trouble of thinking and all the cares of living.”

Sound familiar? Folks like Friedberg have little faith in the intellect of the folks; or in their ability to act in their own best interests. Nanny emerges and enervates the free spirits of a people: "After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd."

So, who care about the facts-kind of like Al Gore, isn't it?-when we have a more important task at hand; remaking the populace into our own image of health. And let's put aside the fact that reducing salt isn't good for everyone. The goal is control-and the resultant passivity that allows elites like Friedberg to monitor and regulate how people should live.

As Tierney points out: "In the past year, researchers led by Salvatore Paterna of the University of Palermo have reported one of the most rigorous experiments so far: a randomized clinical trial of heart patients who were put on different diets. Those on a low-sodium diet were more likely to be rehospitalized and to die, results that prompted the researchers to ask, “Is sodium an old enemy or a new friend?” Those results, while hardly a reason for you to start eating more salt, are a reminder that salt affects a great deal more than blood pressure. Lowering it can cause problems with blood flow to the kidneys and insulin resistance, which can increase the risk of strokes and heart attacks."

The Friedberg regime is truly frightening-with a B. F. Skinner kind of behavioral model that sees all citizens as subjects to be experimented on. The most foreboding aspect of all this is, well to put it kindly, these folks are full of crapola-making policy based on pseudo science-much as the antifat campaign was a few years ago: "That antifat campaign, like the antisalt campaign, was endorsed by prominent groups and federal agencies before the campaigners’ theory was tested in rigorous trials. It too seemed quite logical — in theory. But in practice the results were dismal, as demonstrated eventually by clinical trials and by the expanding waistlines of Americans. People followed the advice in the “food pyramid” to reduce the percentage of fat in the diet, but they got more obese, perhaps because they ate so many other ingredients in foods with “low fat” labels."

But if form holds, and Mike Bloomberg is able to purchase the NY electorate once again, we willl really find out that the third time is no charm. And the man behind the curtain is little in stature, but he has big plans for how you should live your life.

Push Comes to Shove

As the NY Times is reporting today, the Bloomberg campaign is beginning to discover its inner Sid Vicious: "He is comfortably ahead in the polls. He has the vast powers of incumbency at his disposal. He has the backing of the city’s most powerful business interests. But that does not seem to be enough for Mayor Michael R. Bloomberg. As his campaign sought to overpower any candidate considering challenging him, Mr. Bloomberg commissioned a telephone poll last month that spread derogatory information about Representative Anthony D. Weiner, one of the mayor’s possible rivals in the race."

What emerges from this, is the stark reality that the mayor's unprecedented wealth is corrosive of any real democratic process: "Susan Lerner, the executive director of Common Cause, said the episode underscored the dangers of a candidate with unlimited resources. “It just goes to show, if you have too much money in your campaign, you don’t use it productively,” she said. “He’s hired so many consultants who are looking for something to do.”

While the Times continues to do stand out reporting on all things Bloomberg, we are intrigued to see how the editorialists over on Eighth Avenue will treat this corrupting phenomenon-now that the paper did its own self aggrandizing about face on term limits. Can we get more "special interests" than the mayor's own amour propre?

And check out the follicly challenged Wolfson's response to the gilded phone attack: "Asked if the Bloomberg campaign had commissioned the telephone messages, Howard Wolfson, a Bloomberg spokesman, declined to respond directly. But Mr. Wolfson denied that the campaign had engaged in any push-polling. “Unfortunately for Congressman Weiner, the fact that he takes money from lobbyists and special interests, misses votes and has not passed any significant legislation isn’t a push poll — it’s his record,” Mr. Wolfson said."

Of course, overturning the will of the voters, suborning the bumbling city legislature, and buying elections with unheard of cash outlays is, what, good government in the Wolfson weltanschauung? Imagine if Weiner had $100 million to catalogue the Bloomberg Albany fiascos and his stadium bumbling? Not to mention his term limits flipping.

The possibility still exists, however, that this kind of plutocratic heavy handedness will backfire in an age of austerity and resentment. But, as they say, it ain't the way to bet.

Last Store Standing

In the recently concluded budget fight over wine in grocery stores, the successful opposition portrayed their fight as a defense of Mom and Pop stores on Main Street. Whatever the merits of this argument might be for the box store world of upstate New York-and, quite frankly, we don't see any-it really falls flat in the city of New York; as more and more small stores on the city's main streets succumb to economic hard times: "Bye-bye, mom and pop. Small businesses in the Bronx are disappearing, according to a report released by Rep. Anthony Weiner. It shows that 9.1%, or 105, of the 1,156 stores along seven main shopping strips in the borough have closed or are in the process of closing."

And it ain't the big boxes that are at fault in the city's small store plight: "Michael Palomba, 51, owner of Palomba Academy of Music & Dance, said he has watched his area of E. Gun Hill Road deteriorate as the Internet and chain stores grow, the economy plummets and the city makes the environment less welcoming to businesses...Palomba said the city “chokes” local businesses with regular sanitation citations, tax rate increases and fines from the Fire and Health departments."

This dire situation has led to the introduction of the Small Business Protection bill at the city council. But does anyone think that the Quinnberg administration will let this bill sail through so that the city's bodegas can get some relief? Bloomberg is no fan of the little guy; and as for Chris Quinn, how does Invasion of the Body Snatchers sound as a description of her new political persona as the mayor's handmaiden?

Will leave the last word to a Bronx bodeguero: "Waley Alzubide, 23, who owns a bodega at 900 E. Gun Hill Road, is weathering a time when goods are more expensive, people have less money to spend and stores are closing around him. He said much more will be needed to rebuild his belief in the American dream. “It doesn’t look like the America that people who come from different countries come here for,” he said. “If you have a family and you are making $600 a week, you can’t make it.”

Paterson's Limbo

Governor David Paterson continues to practice his election poll limbo; along with that old refrain from the limbo-watching crowd: "how low can you go." As the NY Post reports this morning: "A staggering 63 percent of voters say Gov. Paterson does not deserve to be elected to a full term next year, and 53 percent want him to declare now that he won't run, according to a poll released yesterday."

Paterson, for his part, remained eerily upbeat, blaming his low polling on the economic hard times, and not his own performance: "Paterson blamed his poor showing on his efforts to grapple with the massive state budget deficit. "Right now, we have a historically high budget deficit, so it would follow that whoever is supervising it would have historically low poll numbers," he said yesterday."

This is known as whistling passed the graveyard. How many sitting governor's would lose to a challenger from their own party by over 40% of those polled? But that's what Paterson faces if he were to find himself in a showdown with Attorney General Andrew Cuomo. So, as Liz pointed out yesterday: "Top New York Democrats have privately set a deadline of early November for Gov. Paterson to turn his poll numbers around or they'll urge him not to run next year.
"The idea is to let him get through the budget and get through the summer," said a prominent Democratic donor who sees the fall elections as the cutoff for Paterson's improvement."

How likely is that? Not so much if you consider the governor's raw leadership skills. In his case, it would take an extremely eloquent and charismatic fellow to somehow emerge from this kind of morass; and does anyone think that David Paterson is that fellow? The reality is that Paterson's poll numbers are well deserved-with a dismal year's performance that culminated in his ceding governing authority to the state's most liberal leader, the assembly speaker Sheldon Silver. The end result, was a budget that did a 180 from the fiscal austerity rhetoric that had originally helped Paterson to attain some decent poll numbers last summer.

Which is precisely as the Daily News' Bill Hammond sees this dismal scene: "Stick a fork in Gov. Paterson. He's as good as done.The budget battle was his last, best chance to regain the shattered faith of New Yorkers, and he blew it. He promised a budget that would rein in out-of-control spending in the face of a terrible economy. He promised to avoid job-killing tax hikes. He delivered exactly the opposite - a bloated plan that allows spending to soar and wallops overburdened taxpayers with $8 billion in new levies."

And the governor's spin class has only succeeded in making us all dizzy: "The biggest fib of all is Paterson's claim to have controlled spending and conquered future budget gaps. In fact, deficits are guaranteed to explode in 2012, when the federal stimulus money runs out and the temporary income tax hike expires. Add it up, and they're not just trying to tell us the glass is half full. They're telling us up is down and black is white."

If Democratic leaders don't find a way to get Paterson to exit gracefully, they may well be facing a bloodbath in 2010: "State Republicans have their fannies in fewer legislative and congressional seats than since the mists of political time. They control no statewide offices. Even their inventory of local government chairs looks as spare as the shelves of a Third World department store. Republicans can't even take advantage of opportunities to recapture offices that, based on enrollment, they never should have lost. As bleak a scenario as this is for a party that only recently held the governor's mansion, the state Senate and other centers of power, the Republicans may have the Democrats right where they want them. And that's taxing, spending, flailing and feuding."

And it is the state senate where the putative comeback will take place, that is unless Paterson is able to see the handwriting on the wall: "The Democrats' actions on the state budget — on top of other perceived disasters — could fuel a quick Republican rebound next year. The most likely place for GOP gains is the state Senate. The Democrats' control is so tenuous that the illness of one of their members delayed the budget for at least a day because they didn't have an extra vote to pass it. And the boiling anger in swing suburban and upstate communities over they way they feel the New York City-based Democratic leadership treated them could help the party reclaim its majority. The Democrats, who held the line on the state spending not driven by federal stimulus funds, may have a case that the budget is not as unfair as Republicans and regional activists claim."

So, if the party is going to avoid this debacle in the making, someone needs to gracefully give Paterson the Ted Mack hook; and the fawning wagon-circling by fellow Harlemites doesn't bode well for gracefulness: "Embattled Gov. David Paterson got some support earlier today from three fellow Harlem Democrats, who rallied around him and (at least in the case of Rep. Charlie Rangel), accused the media of giving him a bad rap. Said Rangel, who noted he's had his own "differences with the press," to Paterson: "...If you were in a boat and you got out of the boat and walked the waters, the newspaper would report ‘Governor Paterson can’t swim.’ And so, I want you to know that we don’t control the ink that the reporters have, but throughout this great state, and throughout the congressional delegation, we’re looking forward to your continued leadership and to the community, thank you so much for being you."

If good sense doesn't prevail here, Paterson will be joining the hapless Hall of Fame-joining David Dinkins in more ways the one if his refusal to leave the stage ushers in a new era of Guiliani. But we don't expect the governor's poll numbers to experience a Lourdes curing moment; nor do we think that the Rangel-style cheer leading will last while poll numbers remain frozen in record depths. Come September, as we have already suggested, David Paterson will be playing Groucho's Captain Spaulding; telling us all: "Hello, I must be going."

Monday, April 06, 2009

In Loco Parentis

This is a tale of two stories-one from parents frustrated over the lack of access and responsiveness from the Bloomberg/Klein school apparatus; and the other from, who else?-the aparatchiks themselves who tout all of their efforts to engage said parents. Here's the NY Daily News on the parents' frustration: "Parents and advocates say they are shut out of information allowing them to keep tabs on how the mayor's management of the school system is working.
Many report extensive delays and barriers getting access to public information just as a showdown looms over control of the city's schools. Mayor Bloomberg is the first to have direct control over the school system, but the law giving him that power is up for renewal this year."

The NY Post presents the official version: "The biggest complaint about mayoral control of the schools is that parents have been shut out of key decision-making and their participation in educational affairs has been generally discouraged. But Mayor Bloomberg and Schools Chancellor Joel Klein insist that nothing could be further from the truth..."

Here's how they see their stewardship on this issue: "Since taking over the schools in 2003, the Bloomberg administration has:

* Hired a parent coordinator to be a point of contact in every school. And there's at least one parent advocate in every district.

* Created the Office of Family Engagement and Advocacy, headed by "chief mom" Martine Guerrier, to focus more attention on addressing grievances raised by parents from the school level to the chancellor's office.

* Required that parental involvement be part of principals' job evaluations.

* Made sure parents get more information about the quality of their schools through A-to-F progress reports...." And so on, and so on"

What to make of the great divide? It just might be that, in spite of all of the bureaucratic "remedies" for parent disaffection, the basic ruling principle of top down management animates the governing system in spite of all of the apparent efforts to involve parents. As Dick Dadey told the News: "There is widespread frustration over public access to this information," said Dick Dadey, director of the Citizens Union. "From parents, teachers - it's a common complaint." Frustration is mounting even after Bloomberg recently told the Sunnyside, Queens, Chamber of Commerce that public information should be easily obtained. "This is your government," he said. "I've never understood governments that don't put out all the information, good and bad. The public owns the information." Tell that to lower Manhattan parents' council President Lisa Donlan, who says she can't get the most basic school data."

So it appears that all of the vaunted efforts at parental involvement are more cosmetic than tangible-there to appear good rather than to be good. As the Post points out: "Despite the efforts, Klein is the first to admit that complaining about the lack of parental and community involvement has been a sore point. "There are things we could have done better on engaging the community, and we will work to improve those," Klein said. Still, some parents complain that they have to navigate a bureaucracy to solve problems. "It is too easy to become an authoritarian when you're given some power and nobody is there to stop you from taking all of the power," said Robert Coloras, president of District 26's parents' CEC in Queens."

This leaves it to the legislature to sort out what's real and what's Memorex; a place where the mayor hasn't had much success-and deservedly so, in our view. It's one venue where Bloomberg's money hasn't gotten any bang. Let's hope this doesn't change.

Budgeting Back

According to the NY Times, the state's budget that was passed on Friday may have to be held together with chewing gum and tape-and it's almost inevitable that, because of revenue shortfalls, it will have to be revisited: "But the document may only be a first draft. The governor, a Democrat, has warned that it is likely to be reopened this year amid declining state tax revenues and Wall Street’s troubles. There are questions whether the Legislature has seriously addressed the state’s problems; lawmakers are relying on federal stimulus payments over the next two years and on a three-year state tax increase on the highest earners to balance the budget."

Given this need for another cash infusion-and with taxes and fees already sky high-it is a good bet that wine in grocery stores will be given a second look; and that second look should be crafted around a compromise that allows NY's liquor stores to expand their limited retail offerings. This is a scenario that forward thinking liquor store owners have already begun to embrace.

One such owner, writing in last month's NY Times, outlined his willingness to embrace a change in the law if it were to include his business as well: "But these proposals will bring increased competition, and it’s only fair that there should be commensurate opportunities to expand our small businesses. If supermarkets can have multiple locations, why are we prohibited (pardon the pun) from operating more than one store? Or from keeping the same hours? If grocery stores can sell a CĂ´tes du RhĂ´ne, then why shouldn’t we be able to sell baguettes and cheese? How about artisan beer? Or just reusable shopping bags? (A Rochester store was recently fined a whopping $10,000 for doing this.) What goes for the grocery stores should go for us too."

And the compromise that will be most viable will also need to include some ability to address the question of underage sales. This is something that Assemblyman Ortiz has addresses in a draft piece of legislation that will allow for training for store owners and mandatory carding of all purchasers of alcoholic beverages-something that Florida mandates with much success. Now we believe that this issue was a huge piece of propaganda from the Last Truth on Main Street crowd, but the Ortiz proposal should quiet the disinformation on that front.

Another issue that will need to be addresses is the fees for the smaller, NYC-based, independent supermarkets. Under the current draft from the governor's office, a mid-sized city supermarket-of, let's say 10,000 square feet-that grosses around $100,000/week, would have to pay a wine fee of approximately $25,000! This is too much for a retailer that will lack the space to really devote a lot of room to a wide selection of wines. And, if the fees are made more reasonable, there will be 600 or more Main Street stores in the city that will be able to add a profit center to slow the disappearance of supermarkets from New York.

With the short fall already mounting-and tax payers in high dudgeon-isn't it a good idea to look for revenues-an estimated $160million from wine license fees-that don't include additional taxes? And as long as the small liquor stores get an ability to grow at the same time, this should be an idea that the legislature can embrace.

Update

An article from the Rochester Democrat and Chronicle highlights our general point on the likelihood that the wine issue will indeed return to the Albany stage in the very near term: "I'm positive it will come up again," said New York State Liquor Store Association President Stefan Kalogridis, owner of Covin Wine Merchants in Albany."

And on the side of goodness, the folks over at Wegmans agree: "Paterson's proposed budget had estimated that allowing wine sales in grocery stores would add $105 million to state coffers. Gates-based grocery chain Wegmans Food Markets Inc. spearheaded a campaign to get public support, bankrolling a series of television ads as well as having a petition drive in its New York stores."We will continue our efforts," said Jo Natale, director of media relations for Wegmans. "We owe it to our customers, 70 percent of whom want this. We owe it to our employees because it would create new growth opportunities. And we owe it to the New York wine industry because they, too, would benefit."

But the liquor stores still resist compromise, claiming-get this-that their stores are too small to expand: "State law currently allows wine sales only in liquor stores, which in turn are prohibited from selling merchandise much beyond that. "Our business model was set up to sell liquor and wine — 95 percent of our stores aren't able to bring in foods and other items," Kalogridis said. "We don't have the room."

So the liquor stores are so small that they can't expand the scope of their operation, but the owners feel that this is the kind of consumer depriving environment that they need to defend at all costs? Good sense needs to prevail here. "We have no room to expand," is not a rallying cry for the 21st century-not when the state is in dire need of the license fee money from new wine sellers.

Taxing Habit

As we have been arguing for over a decade, rising cigarette taxes are killing small stores, while creating a thriving black market for Indian retailers. At some point, there will be a law of diminishing returns-something that the NY Post pointed out yesterday: "As smokers dwindle so will the money, says Thomas Briant, executive director of the National Association of Tobacco Outlets. "It's really a declining revenue source," Briant says. "Increases in cigarette and tobacco taxes are reaching a point of diminishing returns, often not generating the amount projected."

And of course, the transfer of sales to illegal Indian sources, deprives NY State of over $1 billion tax dollars: "Altria spokesman David Sutton also argues that tobacco taxes are "a very questionable revenue stream" for government programs. "It's quite likely the $35 billion [earmarked for children's health insurance programs from tobacco tax revenue] will not be realized. When you increase the tax level, consumers change their behavior," perhaps seeking to avoid paying more rather than quitting. "In New York, instead of going to the bodega, folks go to the Native American reservation, who don't pay the tax, or go online, or to another state, or buy counterfeit or contraband product."

With the state's budget still out of whack-and an adjustment expected to be needed as early as June-this is money left on the table that can no longer be ignored; especially when it's likely that some unappetizing service cuts will have to be made. Here's hoping that the assembly and the senate get together and force Governor Paterson to come up with a workable methodology to -end the Indian tax rip-off.

Friday, April 03, 2009

Fat City

Governor Paterson, borrowing a page out of Mike Bloomberg's playbook, is launching a war on obesity: "Gov. David Paterson just announced he is proposing two bills designed to combat obesity, including one that would ban trans fats...The other bill will enact the Health Schools Act, which would establish nutritional guidelines on cafeteria food, and require schools to develop wellness policies to make students more active."

Well good luck with that! Or, as Liz tells us, Paterson feels that he might approach the mayor's approval rating if he apes Bloomberg's nanny state agenda: "Even though there have been grumbles about Bloomberg's "nanny state" approach to governing (no fat, no salt, no smoking etc.), his poll numbers have continued to remain high (although they've slipped of late). Paterson, on the other hand, recently saw his approval rating hit an historic low. So even an anti-fat crusade is worth a shot, as he doesn't have much to lose."

To us, however, this is simply a poor attempt to change the subject away from the governor's performance rating-poll numbers that make the mayor's look like fat city. And the development of school wellness policies are, well, a bit too nebulous to stimulate any new resurgence of the governor's diminished popularity.

But the approach here isn't half bad, since the effort is intelligently designed to enlist community involvement. As the governor's press statement says: "The Healthy Schools Act also requires schools districts to develop school wellness policies to ensure community involvement in considering ways to create healthier schools and increase opportunities for physical activity throughout the school day. Such policies are already mandatory for participants in federal meal programs but compliance is not universal."

The devil, however, is in the details, and nothing we've seen from Paterson gives us any optimism that this kind of a program will be gotten off the ground in enough time to help prevent his ouster. It will be up to his predecessor-if he or she wants-to take this idea and implement it.

Waterboarding Legalized!

Just when you thought real change had been ushered in for the Age of Obama-with Gitmo closing and water boarding placed on the endangered species list-along comes the news that NYC homeowners will be soaked once again by another double digit increase in their water bills. As the NY Times reports: "New York City residents should brace for another double-digit increase in their water rates, even though they are conserving more water than ever before.That is the mixed message that residents are likely to hear on Friday, when the New York City Water Board is expected to raise water and sewer rates by 14 percent, while water consumption is projected, thanks to the recession, to hit its lowest point since the 1960s."

All we can think about this is that water boarding has been legalized-with New York City residents being the hapless victims once again: "Over all, the city is on pace to collect roughly $80 million less in water bill revenues than in previous years. And that decline is one reason, city officials said, that the water board is expected to consider a rate increase similar to the 14.5 percent increase in 2008, which was the largest since 1992. For the average single-family homeowner, a 14 percent increase would mean a new annual bill of roughly $910, compared with the current bill of about $800."

But wait! Remember when the rate was last increased, and the administration promised a full report on the entire rate making process? As the Times points out: "Water rates have become an increasingly contentious issue in recent years. Last year, the city’s Independent Budget Office calculated that water rates had risen a cumulative 77 percent since 2001. City Comptroller William C. Thompson Jr., who is considered a probable opponent for Mayor Michael R. Bloomberg in the November election, held a news conference this week criticizing the city for failing to produce a study on water rates that was promised after the 14.5 percent increase. He is expected to testify at the water board meeting on Friday."

So we have an agency that arbitrarily-without any real rhyme or reason-raises rates; while its governing structure-can anyone say MTA?-remains totally opaque: "The Department of Environmental Protection has been questioned, as well, about its operations. Because the agency is financed chiefly by water bills, it has been largely cushioned from the steep budget cuts ordered by Mr. Bloomberg to help the city close a multibillion-dollar deficit. The Daily News reported recently that the agency had approved $300,000 in raises to 41 employees since January."

Remember also, that the DEP is an agency that has for years been unable to collect its bills; owing to the fact that it simply is so inefficient that it can't justify them in any independent review process. So what good is modernization and overhaul, if the modernizers are also the aggrandizers? "But city officials say that the Bloomberg administration is pushing ahead with modernization and infrastructure programs that will ultimately save the city — and consumers — much more money. As one example, the city recently unveiled the latest technology to upgrade its record-keeping system to help the city collect tens of millions of dollars in overdue water bills."

So the one thing that we can depend on when the DEP reaches for greater efficiencies, is a more facile and lucrative bill collection process; one that will perhaps continue to charge more as consumers use less water. And only in DEP Newspeak is a greater ability to collect money from customers seen as a saving for consumers.

So this Keystone Kops agency is yet another example of the failure of the Bloombergistas to reinvent government in a way that will create cost savings through greater efficiencies. The good news? He'll probably have another four years to continue to demonstrate his own lack of governing suppleness.

Governor Spaulding

Yesterday we commented on Governor Paterson's snarky observation about Rush Limbaugh's Escape From New York; and Clyde Haberman follows up on this in the morning's NY Times, with a discussion of the governor's speech at the Association for a Better New York:

"So if we correctly understood past warnings from the governor and the mayor, we should soon witness a mass exodus of the wealthy to other states, right? Well, maybe not quite, Mr. Paterson told reporters after his speech. He had spoken with rich people. “A lot of them said they’re going to stay,” he said, and “ride out this storm.” One prominent person intends to seek shelter from the storm somewhere else. That would be the radio personality Rush Limbaugh. Mr. Limbaugh announced that he was giving up on New York because of “these stupid, punitive, massive tax increases.” He will sell his penthouse on Fifth Avenue, he said, and will no longer use the city as a backup whenever hurricanes force him to flee his broadcast studio in Florida.

Now Haberman finds the Limbaugh exit quite funny-alluding to the loosening of the state's drug laws, something that the pill popping Limbaugh should find attractive enough to postpone his leave: "It’s a shame, really. Here’s a fellow who has had a serious pill-popping problem. Now he’s waving New York goodbye just when it is easing its drug laws. The timing could not be more unfortunate."

But, as Haberman observes, the overall tone of the Paterson speech was one of defensiveness; and his Limbaugh remarks fall flat in contrast to the governor's own lame performance: "His breakfast talk was solemn, striking for its defensiveness. But then, he has a lot to be defensive about. He has managed to dry up most of the enormous reservoir of good will that he had a year ago when he was suddenly thrust into office as a result of Eliot Spitzer’s hankering for prostitutes. A Siena College poll puts the governor’s job-approval rating at 19 percent. Any politician with a pulse should be able to do better than that."

Paterson's free fall-starting with his Caroline Kennedy debacle-escalated with his inept governing performance around the state's budget deficit. Talking tough early on, with much earnest rhetoric about the need for fiscal discipline, Paterson soon reverted to playing Charlie McCarthy to Shelly Silver's Edgar Bergen; and the result is a massive spending spree-along with huge tax hikes-in the midst of a unique economic downturn.

But Paterson would have us believe otherwise: "On Thursday he lashed out at his critics, saying they did not know what they were talking about in regard to his $131.8 billion budget deal with the Legislature. News organizations and unnamed interest groups were “either inaccurate or wrong,” he said, in describing the new budget as nearly 9 percent fatter than the last one. If you strip away billions in federal stimulus money, as well as obligatory increases in certain expenses like health care, you would see that the Legislature actually shaved spending a bit, he said."

So many lying eyes! But let's turn from farce to tragedy, and see what the NY Post's Adam Brodsky has to say about the nature of Paterson's rhetorical austerity; in a column aptly named, "Albany Lies:"

"For the first time, the Legislature has exercised significant spending restraint, and if it continues, the end of the financial crisis is near.
Gov. Paterson uttered this multipronged falsehood this week. But if a record $11 billion spending hike is "restraint," don't even ask what "reckless" would look like."

The reality is that the state took the federal stimulus cash, money that was provided in order to enable the states to avoid large tax increases, and taxed the hell out of everyone anyway: "The 2009-10 fiscal plan is among the most irresponsible in memory. That it comes during a severe recession and with the state economy in enormous flux only compounds the damage...The stimulus money, for example, will soon run out. The tax hikes are to sunset in three years (good luck with that). The economy might not recover as quickly as lawmakers hope."

What all this irresponsible profligacy will do to the private sector-you know, the place where jobs are actually created-is hard to gauge; but it certainly's not gonna be pretty: "A new study for the Empire Center for New York State Policy predicts the loss of 15,500 private-sector jobs as a result of the $4 billion income-tax bump alone."

So Paterson's blithe dismissal of Limbaugh's exodus might be simply a case of his own failure to read the handwriting on the wall. And soon, we expect that the governor will be tap dancing to the tune of Captain Spaulding: "Hello, I must be going."

Thursday, April 02, 2009

Bell Tolls for Limbaugh?

Well, it appears that Governor Paterson is heralding the fact that Rush Limbaugh has announced that, because of the recently announced tax increases, he's getting out of New York: "Rush Limbaugh is fed up with taxes in New York and with Gov. David A. Paterson in particular. The radio talk-show host denounced the so-called millionaires’ tax in the new state budget and then announced on the air this week that he would be packing up and leaving town...Mr. Paterson said he was hardly sorry to see him go. “If I knew that would be the result,” he said after a speech Thursday morning in Midtown, “I would’ve thought about the taxes earlier.”

Which raises the obvious question; Is the state better off with Limbaugh leaving and Paterson staying? And in answering this question, isn't it better to see Limbaugh as symbolic of a class? One commenter to the City Room blog captures this: "I don’t care about Rush leaving, but I do think that many will leave when you think that most of these guys will be paying about 60% of their income to Fed, NYC and NYS. What is the benefit of staying? Not much, particularly when media and financial companies are leaving as well. So who gets stuck with the bill at the end of the day for reckless state spending? We do. They’ll hide the additional taxes in the utility bills, phone bills, sales taxes, real estate taxes… but rest assured we will pay. It’s no wonder NY loses its most productive people at a higher rate than any other state (other than CA)."

So while Paterson and the WFP chuckle over the bell tolling for Limbaugh's New York sojourn, it would behoove these folks to remember the message of the John Donne poem:

"Perchance he for whom this bell tolls may be so ill, as that he knows not it tolls for him; and perchance I may think myself so much better than I am, as that they who are about me, and see my state, may have caused it to toll for me, and I know not that."

Revise That Law!

As Crains Insider reports this morning (subscription), the state's claiming of 80% of the undredeemed deposits from the bottle bill will put a serious hurt on some of New York's small bottlers: "Initially, the unclaimed nickels were seen as an unexpected bonus for the industry, but over time, many businesses have come to depend on them. One industry representative says for some small beverage companies, “their entire profit margin is built on unredeemed deposits.”

And the spotlight is on our client, Good-O Beverage of the Bronx: "Some businesses, such as Good-O Beverage on Boone Avenue in the Bronx, have received a sympathetic response from their local senators (in Good-O’s case, Sen. Pedro Espada Jr.). But their plight was not compelling enough to move senators to undermine their majority leader, Malcolm Smith, who cut the bottle bill deal in closed-door talks with the governor and the Assembly speaker."

But it's not only Good-O; there's also Brooklyn Bottling on Linden Boulevard makers of D & G Jamaican Soft Drinks and Tropical Fantasy soda and juices; as well as GuS Soda, sold at more upscale venues And let's not forget Top Pop owned and operated by Marlen Lugones and Inca Kola owned by the Jardines family. All of these minority and women-owned enterprises would be severely damaged if the state takes away the unredeemed deposits.

But that's not the only defect in the law: "Many are upset that they will have to add a UPC symbol to bottles. The codes are designed to prevent consumers from redeeming deposit-free bottles purchased in other states. Bill opponents warn that consumers will circumvent the measure by returning such bottles to busy clerks rather than redemption machines that are programmed to reject them."

The biggest problem with the separate UPC code is that it will require the added expense of separate bottling lines and additional warehouse space-further challenging struggling small bottlers-not to mention the further additional costs to the consumer it will entail. All of which could have been avoided by an open legislative process: “If this was done in sunlight, we could have negotiated,” a bottle bill opponent says. Instead, small beverage companies will seek legislation exempting them from elements of the bill they find onerous."

Hopefully, legislators will see that there is room for an adjustment to a law that, quite frankly, very few of them had the opportunity to review before it was subsumed within the larger budget agreement. Changes here are only the right thing to do.

Wednesday, April 01, 2009

Smoking Guns

Did you happen to hear the news? The Indian Aggrandizement Act is now law-and with cigarettes in the city rising to $10 a pack, the new Indian war cry is, "Ca Ching!" As City Room reported yesterday: "Cigarettes in New York City will top $9 a pack — and in some cases more than $10 — starting Wednesday, as a federal tax more than doubles to $1.01 per pack. With taxes having increased last year as well, the price of each pack now carries $5.26 in government fees in New York City, making this one of the most expensive places in the country to smoke." What this means, in spite of the smoke get in your eyes myopia of Michael Daly, is that the bootlegging Indian tax avoiders will be raking it in-already more than 50% of all cigarette sales in NY State are being done through these untaxed reservation outlets.

So where's the crackdown;? And how come the state has yet to enact the law that would put a stop to this lawlessness-a tax avoidance causing the loss of over $1 billion tax dollars? As City Room points out: "While a 2007 study from the city found that higher taxes also prompt people to buy from Indian reservations, duty-free shops and other low-tax venues, this federal tax — which is to finance the states’ Children’s Insurance Program — touches all states. In addition, budget shortfalls are pushing more than 20 states to look to tobacco for revenue, even those that have avoided cigarette taxes for years or decades."

As the IBO reported two years ago: "In February of this year, Mayor Michael R. Bloomberg again proposed raising the city’s cigarette tax. “While the mayor’s proposal to again increase the local cigarette tax assumes that higher prices will further discourage New Yorkers from smoking, it may also encourage more city smokers to seek under-taxed cigarettes,” the report concludes." Even Daly can see this: "Of course, many tobacco junkies will try to buy bootleg cigarettes, primarily over the Internet. The laws against that should be toughened and enforced at city, state and federal levels. Bootleggers and second-offense buyers should get time in jail, the realm of the $100 pack."

Huh? We wish that columnists would do some basic research. It's not primarily the Internet where these buttleggers are prospering; it's Indian retailers combined with the state's faintheartedness that's costing the tax payers. As NYACS underscored in its report this year: "With an average excise tax rate of $25.42 per carton for the current fiscal year, these volumes would imply additional cigarettes tax receipts of $970million to $1 billion after adjusting for lost of business due to higher retail prices stemming from newly imposed excise taxes on Native-American stores."

All of this is going to go up; and even the health advocates recognize that higher taxes equal higher tax avoidance-with the greatest burden being placed on low income smokers. So, if you're going to allow smoking at all, then the legal outlets need protection; bodegas in the city have lost $250 million a year and counting-and the bankruptcies of small stores are at record highs. Congressman Weiner gets it: "Rep. Anthony Weiner (D-Brooklyn, Queens) warned that the higher taxes could mean "Christmas is coming early for Internet cigarette sites ... As we work to stop New Yorkers from smoking, we also need a renewed crackdown on smuggled cigarettes."

Sp who will take the lead here? With the state treasury hemorrhaging money, we need a champion to attack this blatant disregard for state law. Indians receive over $100 million in education aid for their children-money they willingly accept. But when it comes time to paying their cigarette taxes they balk; claiming a sovereignty that courts have denied. So, as far as social services are concerned, Indians claim citizenship rights; but when it comes time to paying taxes, they invoke sovereign immunity. Who's gonna fight this hypocrisy and call their bluff?


Bell Tolls

According to the NY Daily News, it appears as if tolling the East and Harlem: "Gov. Paterson officially rang the death knell Tuesday for a plan to toll the city's free East and Harlem river bridges.The Daily News reported last week that officials hammering out an MTA bailout had moved away from the controversial scheme and were focusing on other vehicle-related charges like registration fees or surcharges."

So, let's get this straight. There will be some kind of deal to keep the fares down? Probably, it just won't include the bridges. As the News points out: "Sen. Kevin Parker, a Brooklyn Democrat, welcomed news that the tolls were off the table. "It's a victory for the people of Brooklyn and Queens and the Bronx and Staten Island because they are not being unduly penalized to solve a Manhattan problem," he said."

Now if we recall, the News has made skewering Carl Kruger and his colleagues into a serial-with ten editorials lambasting the opponents of tolls. And if this MTA gap can be bridged (pun intended) without tolls, then it's a win-win for all involved; something that we doubt the News will ever admit. If so, it will be the only time that the Senate Dems will have successfully flexed their new muscles-since the budget doesn't have much of a majority stamp on it, does it?

Kudos the Kruger, Parker, the amigos, and the rest of the Dems who stood up to the governor, the speaker, and the entire establishment. See guys, it actually can be done.

Rev. Bagman

When all of the controversy over the term limits trashing was going full bore, we experienced a Sherlock Holmes moment. It came about when it was apparent that the city's number one pot stirring and racial ambulance chaser was suddenly silent as a church mouse in the face of the Mike Bloomberg power play. It was a "dog that didn't bark moment." Here's one description of the famous story that underscores what we're saying: " 'The dog that didn't bark' is an expression from a Sherlock Holmes mystery. It was an important clue that led to identifying the criminal. It seems that the killer entered and left the estate grounds one night but without the guard dog barking an alarm at the intruder's presence as expected. From this non—event Holmes reasoned that the dog must have known the killer and that clue led to solving the case."

How apropos of the silent Sharpton-the dog that didn't bark when the billionaire stole democracy right out from under us. At the time, we observed that Slim Shady Sharpton was quiet simply because he was being paid hush money; and now, thanks to Juan Gonzales, we get a small glimpse of what could be an even bigger payola scandal.

In this morning's NY Daily News, Gonzales details how Sharpton received $500,000 from a group controlled by former schools chancellor Harold Levy: "The Rev. Al Sharpton and Schools Chancellor Joel Klein stunned the education world last June when they joined forces to reform the nation's public schools.They called their ambitious venture the Education Equality Project, and they vowed in a Washington press conference to lead a campaign to close the decades-old achievement gap between white and black students. What Klein and Sharpton never revealed is that the National Action Network, Sharpton's organization, immediately received a $500,000 donation for its involvement in the new effort."

There you have it-partners in crime: "The huge infusion of cash - equal to more than a year's payroll for Sharpton's entire organization - was quietly provided by Plainfield Asset Management, a Connecticut-based hedge fund, where former Chancellor Harold Levy is a managing director. The money came at a critical moment for the National Action Network. Sharpton was then settling a long-running IRS investigation of his organization. As part of that settlement, he agreed in July to pay $1 million in back taxes and penalties both he personally and his organization owed the government."

"Hush, Hush Sweet Al!" With an African-American candidate waiting in the wings-a co-favorite for being elected mayor once the rem limited Bloomberg left the stage-Sharpton became the dog that didn't bark, Here's Al's response: "Sharpton said his alliance with Klein should not be read as blanket support for Bloomberg's education policies. "I am committed to cutting the achievement gap, but not necessarily to more mayoral control [of city schools]," he said. "I support more charter schools for local church and community groups, but I'm not for privatizing schools and corporate payoffs in education."

So instead of his expected noise making and rabble rousing when democracy is suborned, we are treated to Sharpton the policy wonk-arguing with an air of phony erudition about the merits of charter schools versus vouchers. Subornation, thy name is Sharpton. And the methods used here should be instructive for every reporter looking into the Bloomberg method of utilizing his great fortune to undermine democratic dissent: "The $500,000 from the Connecticut firm did not go directly to National Action Network. Levy funneled the cash to another nonprofit, Education Reform Now, which allowed his company to claim the donation as a charitable tax deduction. The money was then transferred in several payments to Sharpton's group, which does not have tax-deductible status because it is a lobbying organization."

From Tinkers to Evers to Chance-around the horn-and, as with Learn NY-accompanied by an unbelievable disclaimer: "Levy says his firm came up with the idea to make the contribution, and neither Klein nor Bloomberg asked him to aid Sharpton." In all likelihood, this payoff to the slippery Sharpton was not an isolated incident; and is characteristic of how Mike Bloomberg's royal extension has been accomplished without much of a popular outcry from the usual suspects-farmers who were obviously being paid not to farm.

Rewined

As we mentioned yesterday, the battle to allow grocery stores to sell wine is far from over. As Newsday reported: "With a proposal to allow wine sales in grocery and other stores officially shelved, backers and at least one state legislator say they stand ready to revive it through a compromise bill before the summer."

Doesn't mean that this is gonna be any kind of cake walk-not with the liquor store spigot gushing hundreds of thousands of dollars into the wining and dinner up at the state capitol; and with their phony Main Street facade blatantly lying to legislators and the public. Scott Osbourne from Fox Run Vineyards captures this in a letter he has sent to all legislators: "Unfortunately, I am afraid that the voices of our industry were ultimately drowned out by a big liquor campaign that never allowed the conversation to move to the critically important next step: Developing some sort of big picture compromise that could insure that liquor stores, grape growers, wine makers, and grocers alike could all survive and thrive in New York State."

But with a state budget that remains in free fall, a compromise could still be reached. As the NY Daily News opined: "The final disgrace is that Paterson, Silver and Smith acknowledge that tax collections are continuing to drop. The state will not be able to pay the bills the governor and lawmakers are committing to. In that sense the budget is worse than irresponsible, it's also a fraud."

Which means that, come June, we will be looking for love in all the wrong places-as shortfalls continue to challenge the revenuers. At that point, with as dry a well as you can imagine-should we find more folks to "sacrifice?"-that $160 million in wine fees are going to look mighty darn good. As Newsday pointed out: "Jennifer Carlson, a consultant to grocery chains that pushed for Paterson's proposal, said given budget shortfalls, "We think legislators are going to be coming back to find more money," which the original proposal addressed by raising $160 million in new licensing fees."

With the Albany Easter Egg Hunt pushed into summer, the speaker will be harder pressed to justify keeping his thumb on the scale-in broad daylight this kind of special pleading is more challenging. But it's up to the editorial boards and the good government groups to step up as well; especially for a proposal that will help local supermarkets and be a huge boon to the state's wine growers and consumers.