As headlines warned of record tax increases and bitter divisions among state Republicans, Mayor Michael Bloomberg and Governor George Pataki-on opposite sides of the tax-hike debate-appeared together at two press conferences on May 5. Both occasions celebrated good news. First, they announced that Pfizer (PFE) Inc. will create 2,000 jobs here. An hour later, they cut a huge ribbon heralding the re-opening of the Millenium hotel across from Ground Zero.
Both men tried to grin through their differences over the need for tax hikes on the very day that the State Legislature was voting in favor of increases, which Mr. Bloomberg supported and Mr. Pataki bitterly opposed. The Mayor and the Governor said nothing to each other and, like drops of oil scuttling across a puddle, quickly separated after the two events. Afterwards, Pataki spokeswoman Mollie Fullington confirmed that the two hadn’t talked budgets in a week.
This is not a happy time to be a New York Republican. The circular firing squad-a formation most commonly associated with Democrats here-has been appropriated by the G.O.P. Mr. Pataki is publicly attacking members of his own party. State Senate Majority Leader Joseph Bruno, a Republican formerly considered a Pataki ally, has all but called the Governor a liar.
And the “train wreck” that Mr. Pataki has so often invoked to describe the State Legislature’s budget, with its record tax hikes, could also serve as a metaphor for this moment in the Governor’s career. If the Republican-controlled State Senate overrides Mr. Pataki’s budget veto, which is highly likely, the Governor will become politically hobbled-some think irreparably so-just months into his third term.
Meanwhile, taxes and fees will be going up just in time for the Republican National Convention here next year.
Washington is not pleased.
“The G.O.P. will rue the day it chose New York City,” spat out one senior Washington strategist. Added another: “I always thought New York was a big gamble because of these political dynamics, including the personalities, and now it’s coming home to roost. The tax environment in the city and state send exactly the opposite message that President Bush is trying to send.”
Ouch.
In late April, a group of about a dozen Republican strategists met in Washington for the latest in a series of dinner meetings to discuss the upcoming convention. Not many in the group have thought much about the Republican tax wars in New York; the victory in the Iraq war tends to be uppermost in their minds at this point. But when one person raised the topic of tax hikes in New York-with a Republican Governor in Albany and a Republican Mayor in the city-“it was like a cloud came and hung over the meeting,” according to one person who was there.
The White House would not go there. “The President’s position is on matters pertaining to federal issues,” said spokesman Ken Lisaius. “He’s been abundantly clear …. At the federal level, we need to pass the largest economic-growth plan that we can, and right now we’re at $550 billion [in tax cuts].”
There are some Republican strategists who think the country has a reservoir of understanding when it comes to New York. “A lot of national Republicans have always looked at New York as an exception to the accepted rules and norms of Republican orthodoxy,” said Adam Goodman, an advisor to former Mayor Rudolph Giuliani who has also worked on several Florida campaigns. “Most of the triumphs in the city, up to and including 9/11, work very powerfully. Those are the stories you’re going to see played and replayed” around the convention, Mr. Goodman added.
O.K., but isn’t it possible that Mr. Pataki is a little, um, embarrassed that New York is likely to see huge tax increases under his watch, pushed through by fellow Republicans, the year before he hosts his party’s quadrennial lovefest?
“We’re a big tent,” Mr. Pataki said as a scrum of reporters outside the Millenium hotel asked him over and over about the budget. “And I’ve always supported the big-tent theory of the Republican Party. I don’t have a litmus test for anybody else, and I’m sure they don’t have a litmus test for me.” He asserted that in previous years, he “worked to make sure the state led the nation in cutting taxes.” He stated yet again that he would not “sign what would be the largest tax increase in the history of the state.”
Washington’s disapproval notwithstanding, many political insiders can’t explain why Mr. Pataki isn’t exerting more leadership to work out a compromise between his budget, with billions in spending cuts, and the Legislature’s, with restored spending and tax hikes. The most common theory, of course, has it that he’s looking for a job in Washington. His advisers turn mighty sour when they hear that theory. An alternative explanation is that Mr. Pataki is off his game because he has no clear next step and instead has perched on a sagging ledge, lashing out at his fellow Republicans and promising that he’ll not let them forget their apostasy.
Mr. Pataki’s performance as an unyielding opponent of higher taxes hasn’t exactly paid off in the polls. His approval ratings remain stuck below 50 percent-never a good sign. “The voters look at labor leaders and [Assembly Speaker] Sheldon Silver and even Joe Bruno as saving them from Governor Pataki,” said Joseph Mercurio, a consultant who has worked for many Republican candidates. “He isn’t giving the voters the government he promised them.”
The anger is bubbling over. In Park Slope, Brooklyn, on May 6, City Council Speaker Gifford Miller stood in the drizzling rain outside P.S. 321, exhorting voters to call the Governor and urge him to let the city aid package-including the new taxes-stand. “I will call the Governor,” agreed one bespectacled gray-haired father. “But I will call him something else.”
To Pataki advisors, all this is terribly unfair. “The Governor is arguing, ‘I’m trying to do what’s in your best interest-bring your budget into line,'” said one confidante. “Giving someone the castor oil, saying it’s good for you-that’s a hard message to get across. He’s saying, ‘I’m trying to help,’ but it looks, in a tabloid sense, like he’s hurting.”
Party Feuding
Hurt is exactly what state legislators see. Their constituents are screaming about local property-tax hikes, giving legislators the impetus to raise taxes on the wealthy. So far, voters are standing with their lawmakers. And Mr. Pataki and his allies are fighting back-against their fellow Republicans in the State Senate. Since late April, Republican county leaders have been circulating a letter to Republican Senators urging them to break with Mr. Bruno, who favors the tax hikes as a way to close the state’s $11.5 billion budget gap. And some Senators say they’ve been inundated by what they believe is an organized telephone campaign against the budget.
All this intra-party warfare has some party elders grieving. “I don’t like it at all,” said Richard Rosenbaum, a Rochester Republican who has been a fund-raiser for Mr. Pataki and who calls Mr. Bruno a friend. But, he added, “maybe it’s healthy they’re not marching in lockstep any more.”
Others aren’t so sure. “What a mess!” lamented one major party donor. “And I don’t think either one is going to back off.”
According to allies of Mr. Bruno, the Majority Leader has been fielding calls from influential Republicans urging him to support the Governor. The sources said Mr. Bruno was told that an override of the Governor’s veto would make Mr. Pataki an instant lame duck, with more than three years to go on his third term. For a while, it seemed as though Mr. Bruno might cave in. But then he ordered his members to pass the Legislature’s budgets, something they did by large-and, if they hold, veto-proof-majorities.
All of this is terribly embarrassing for Mr. Pataki. Even his attempts to change the subject-such as his announcement of Pfizer’s new jobs-haven’t gone so well. If taxes kill jobs, Pfizer chief executive Hank McKinnell was asked at the news conference, then why was he moving more jobs here at a time when taxes were almost certain to rise?
“I am not opposed to paying taxes, perhaps somewhat surprisingly,” he said. “It means you have income, which is a good thing …. ” Mr. Pataki quickly interrupted him: “It’s a great day, and we’re delighted with Pfizer’s decision-but that doesn’t mean we just pat ourselves on the back. It means we get to work even harder.” And then the Governor himself was cut off, by an aide yelling “Thank you, thank you!” and leading a round of pro forma applause.
From Washington to Albany, this is the only kind of applause Mr. Pataki is getting.
