Pataki, Assembly Wrestle Over Taxes

When Governor George Pataki really means something, his cheeks twitch. His mouth, a thin line that naturally droops at the corners, is pulled toward his ears, and a flush of red appears at the upper end of his cheekbones, just under his eyes. When Mr. Pataki speaks about “job-killing taxes,” the cheek twitch is unmistakable. He does not like broad-based income taxes. Never has.

He won’t propose them, as Mayor Michael Bloomberg has done. But then again, the Democrats in Albany aren’t calling for income-tax increases, either. Instead, in an increasingly bitter and personal battle, each side is waiting for the other to surrender.

The other day, Mr. Pataki took time out from a visit to lower Manhattan to hammer away at Assembly Speaker Sheldon Silver, a Democrat and a persistent critic. “We haven’t seen any response from the Assembly as to how they propose alternatives to the budget that I proposed,” Mr. Pataki said. “And it’s just disappointing, because I understand when people say ‘You shouldn’t do this’ or ‘You can’t do that,’ but they have to have an alternative-and sadly, so far they haven’t proposed any alternatives.”

Mr. Silver has indeed refused to talk about broad-based income tax hikes. (He has, however, supported Mayor Bloomberg’s proposed commuter tax.) At Albany news conferences, reporters try in vain to get Mr. Silver to answer a single question: “If Governor Pataki is to avoid education and health-care cuts, what should he do instead?”

Mr. Silver doesn’t want to answer this question, because there is widely believed in Albany to be just one answer: You have to raise income taxes. The Democrats hope that Mr. Pataki will have to cave in. Nevertheless, the Governor shows no signs of budging.

“George Pataki’s opposition to income-tax hikes is one of the things that makes him him ,” said Blair Horner, legislative director of the New York Public Interest Research Group. That said, the Governor’s budget does contain tax hikes: Not just the subway-fare and the state university tuition hikes, which Democrats like to call “virtual tax hikes,” but also industry-specific taxes, including insurance and hospital taxes, as well as the restoration of the sales taxes on clothing for all but four weeks a year.

Mr. Pataki’s defense of his budget has been ferocious. In speeches across the state, he has raised the campaign against “job-killing taxes” to the level of a crusade. This has caught even some of his erstwhile allies by surprise. “There has to be revenue enhancement,” said Ken Sunshine, a spokesman for Local 1199, the health-care workers’ union that had so much to do with Mr. Pataki’s landslide victory last year. “There are ways to do it that are modest and fair. Otherwise, there could be the destruction of the health-care system as we know it.”

Even Randi Weingarten, the teachers’ union chief who endorsed Mr. Pataki after he approved a circuitous financing mechanism for a new contract, has admitted to becoming more “cynical.”

But privately, many people in these unions still cling to the belief that Mr. Pataki will not let them down, that in the end he will come around. Indeed, he sent word through emissaries early in the budget battle that the fight would be bruising, but there would be a compromise.

Mr. Pataki’s campaign against income-tax hikes has spawned much bar-stool speculation about the Governor’s political motives. The most common thinking is that he’s auditioning for an unspecified job in the Bush administration. But Pataki advisers vehemently insist that the Governor isn’t running or positioning himself for anything.

That said, his handling of the budget is clearly taking a toll. His poll numbers are sliding steeply. His job approval rating is at 49 percent, according to the Quinnipiac College poll. That’s as low as it’s been since June of 1996, when it was at 46 percent.

Still, amid all the bad news, Mr. Pataki is taking his usual nonchalant stance.

“I’m not worried about my support,” he told The Observer . “I’m worried about the future of this city and the future of this state, and I’m very confident we will have a budget and an economic-growth program that makes this city and this state continue to be the place in this country where businesses and jobs and investors want to be.”

Still, at the end of the day, no one sees how Mr. Pataki escapes an income-tax hike entirely. “He wants the Legislature to have to beg for it so he can say, ‘What’s it worth to you?’” said political consultant Norman Adler. “In negotiations, it doesn’t matter what you say; it only matters what happens when the money flows.”

Terry Golway will return to this space next week.