Liberals Giving Mayor Advice: Soak the Rich

In the days since Mayor Michael Bloomberg unveiled his plan to cut services to help plug a $4.7 billion hole in the city budget, only the bravest of City Council members has dared to utter the phrase “higher taxes.” Instead, the euphemism of choice around the East Wing of City Hall is “enhanced revenues,” a loaded phrase that is whispered in secretive conversations behind the building’s pillars or in its dusty basement corridors. Until now, this cautious approach has reflected the reluctance of the Council and other groups to challenge a central tenet of Mr. Bloomberg’s Mayoralty: that spending cuts, not tax hikes, are the only way out of the city’s fiscal dilemma.

That reluctance is fading fast. On Feb. 27, a coalition of union officials, civic leaders and at least a dozen Council members is scheduled to assemble in City Hall Park to launch a campaign aimed at winning support for a variety of ideas for potential tax increases. The rally could mark the official end of Mr. Bloomberg’s political honeymoon, setting the stage for a likely confrontation with the Mayor that could dominate the conversation at City Hall in the coming months.

Among the union leaders expected to assail Mr. Bloomberg’s no-higher-

taxes approach is Randi Weingarten, president of the United Federation of Teachers. “The Mayor has too quickly limited all of our options by ruling out tax increases,” Ms. Weingarten said in an interview with The Observer . In a reference to Mr. Bloomberg’s assertion that his mid-February budget proposal was a “no sacred cows” budget, Ms. Weingarten added: “Everything needs to be on the table. If there are really no sacred cows, then new taxes shouldn’t be any more sacred than anything else.”

The gambit suggests that Democrats think there’s an opening for a populist challenge to City Hall at a time when the billionaire Mayor is slashing services to the poor during the work week and then disappearing for parts unknown on the weekend. His affection for mid-winter golf in the tropics already has earned him the tabloid moniker “Bermuda Bloomy.”

One idea to be floated at the Feb. 27 press conference has a decided “soak-the-rich” flavor: a suggested 1 percent tax hike on income exceeding $150,000 a year.

“The group of people who have been spared by Mayor Bloomberg’s budget are affluent New Yorkers,” said West Side City Council member Christine Quinn, who will be joined by Council members Bill DiBlasio, Gale Brewer and James Sanders, among others.

“If we’re going to ask unions and poor people and school kids to get us out of this $4 billion hole, then we have a responsibility to ask New Yorkers of means to share the pain as well,” Ms. Quinn continued. “They are the ones who would feel it the least.”

Proponents of such a scheme argue that it could generate millions for the city annually. To the argument that such taxes would throw a wet blanket on the economy-a view shared by Mr. Bloomberg-they reply that high-end taxes tend to come out of the savings, not the investments, of the wealthy. They add that the tax would barely register for rich New Yorkers, who have enjoyed an unprecedented explosion of wealth in the city over the last decade and are already being enriched by President Bush’s tax cuts.

Most of the suggested proposals don’t target rich New Yorkers. Another idea to be offered is a partial revival of an obscure levy known as the “stock transfer tax,” which collected a nickel on all stock transactions in New York City until it was phased out in the 1970′s. A third idea is for a small income-tax surcharge that would go directly to the schools, much as former Mayor David Dinkins’ popular “Safe Streets, Safe City” program raised taxes to pay for new police officers. (The group will also suggest reinstatement of the commuter tax and a hike in property taxes, both of which have been aired in the past.)

A spokesman for the Mayor declined to comment.

Rather than present a set of concrete demands, the campaign’s backers say, the goal is to include ideas for tax increases in the debate over the budget, which has until now been confined to an exercise in weighing one cut against another. Indeed, if organizers have their way, these ideas will help set the tone at the Council’s budget hearings starting in March. The campaign is being organized by the Working Families Party, a small but powerful organization whose young, aggressive leaders are displacing Liberal Party boss Ray Harding and his friends as the leading practitioners of third-party politics in New York.

There’s no question that the campaign’s organizers face a tough fight as they try to cajole the Council into confronting Mr. Bloomberg. Higher taxes are always a tough sell, particularly in dire economic times, and the idea that higher taxes hobble the economy has won broad public support. Locally, New Yorkers have spent eight years being bludgeoned by anti-tax arguments from former Mayor Rudolph Giuliani and his allies on the editorial board of the New York Post and at the free-market Manhattan Institute, all of whom have chanted in unison about the mass exodus of jobs that would result from even the most modest tax increase. This argument has been so persuasive that of the five major candidates for Mayor last year, only Fernando Ferrer advocated broad tax increases, immediately earning himself a pummeling at the hands of Mr. Giuliani, who noted that his ideas were “dumb, stupid, idiotic and moronic.”

The fight could also be made tougher by the enormous leverage Mr. Bloomberg enjoys over individual members of the Council, which needs to mobilize a majority of its 51 members to mount a serious challenge over the budget. Although Mr. Bloomberg has shown little taste for wielding raw political influence in the manner of his predecessor, the Mayor does have the power to make or break the pet projects of members or funnel funds into their districts. As one Council insider ruefully put it, the success of their coalition “depends in part on how many members Bloomberg can buy off.”

Backers of the campaign are hoping that the sense of community and shared sacrifice that animated the city after Sept. 11 will add context to their calls for targeted tax increases.

“The public has for years been sold a bill of goods that says government service, like that provided by police, firemen and emergency workers, has no role in their lives,” Ms. Weingarten said. “But there’s an interesting realignment taking place in New York City after 9/11. Taxes well-deployed and well-spent are not the bugaboo they were years ago.”

“Surely six-digit-income New Yorkers would heed a call from their Mayor to make a tiny sacrifice during a period of municipal emergency,” added Mr. Sanders, the chairman of the Council’s Economic Development Committee. “His administration is filled with dollar-a-year employees-wealthy individuals who are happily sacrificing all of their income to help the City. The Mayor doesn’t give our wealthy neighbors enough credit.”

Most of the new ideas being floated would require the State Legislature to pass a so-called home-rule message to allow the city to raise its taxes, which it has historically been willing to do. But this is an election year, with the Governor and the entire Legislature up for re-election. It’s possible the Republican-controlled State Senate could make an issue of tax hikes in the city; but then again, with a Republican Mayor in New York, it might be prudent to avoid calling further attention to such measures.

Gaining Momentum

Although the push for new taxes is in its infant stages, it has already gathered some momentum. It includes a sizable bloc of Council members, as well as civic leaders like David Jones, head of the Community Service Society of New York. And it includes unions like the U.F.T.; District Council 37, the city’s largest public-employee union; Local 32B-32J of the service employees’ union; and the Communication Workers of America, all of whom vow to turn out troops at the coming budget hearings. Dennis Rivera, the head of Local 1199 of the hospital workers’ union, has lent operatives and technical support to the coalition, funding a poll on taxes and the budget, but he has yet to publicly endorse the coalition’s goals.

“We will do whatever we have to do-flyers, mailings, phone banks,” said Bob Master, the political director of the Communications Workers of America, which has 40,000 members in the city.

Adding to the campaign’s growing clout is the involvement of the Working Families Party. The party’s operatives have contacts in all the major unions, and they can lend their organizational power to individual Council members. They are using the tax-increase issue to pull Democrats to the left, much as the state Conservative Party has successfully yanked Republicans to the right over the past two decades.

Making some sort of showdown over taxes with Mr. Bloomberg more likely, sources have told The Observer that City Council Speaker Gifford Miller is quietly supportive of efforts by his members to stake out an aggressive position on taxes, although he has yet to endorse their aims. Ms. Quinn’s presence in the coalition is considered a clear sign of Mr. Miller’s sympathies, because Ms. Quinn is known to be close to the Council’s leadership. Mr. Miller was privately briefed on the Feb. 27 press conference, sources said, and signed off on the idea. This allows Mr. Miller to develop a left flank and position himself in the center, between his left-leaning members and Mr. Bloomberg. But it also dovetails with Mr. Miller’s views, according to a source familiar with his thinking, who added that the Speaker disagrees with Mr. Bloomberg’s frequent assertion that higher taxes would drive people out of the city.

“There is clearly a difference of opinion over the notion that certain folks would flee the city if they had to pay more in taxes,” the source said.

Chris Policano, a spokesman for the Speaker, refused to discuss his thinking on the issue, saying only that “during a $4.7 billion budget gap, the Speakerbelievesthat everything should be on the table.”

Of course, Mr. Miller has yet to prove that he can control the rank and file of his membership. The tax fight could provide Mr. Miller with his first chance to raise the Council’s profile-and, by extension, his own-and prove that he can lead a fractious and diverse legislative body.

“Gifford and the Council have the chance to set the template for their whole administration with this first battle,” said Dan Cantor, the chairman of the Working Families Party. “The Council may not be quite equal to the Mayor in power, but it can be a heck of a lot more than the doormat that Rudy liked to stomp on.”