Mike’s Stadium Revenge: A Tax To Shell Shelly

Even in his post-election euphoria, Mayor Michael Bloomberg’s cheek no doubt still stings from Assembly Speaker Sheldon Silver’s smackdown of his ambitious plan for a West Side stadium. That defeat was the most glaring failure of the Mayor’s first term.

Now, New York’s power brokers are watching carefully to see if the Mayor intends to use his significant political capital to take a more aggressive—and perhaps even vengeful—stance towards Albany, and especially Mr. Silver.

In this anxious climate, many political insiders are intrigued by the sudden reappearance of the defunct commuter tax as an issue commanding the Mayor’s attention. That’s because Mr. Bloomberg is usually so achingly practical, and yet he has refused to rule out discussions about an issue widely regarded as a legislative pipe dream.

“An awful lot of the people in the suburbs come in and work in this city, and the reason they have jobs here is because of all the services that the city provides,” Mr. Bloomberg said on Nov. 14, during a visit to Queens. “It’s not unreasonable to ask them to pay part of the cost of those services.”

But most politicians agree that it’s unreasonable to expect that the tax could be reinstated in 2006, a statewide election year when many State Senate candidates will be running for office in suburbs or counties that would be adversely affected by the tax. Senate Majority Leader Joseph Bruno, a Republican, has made clear that he won’t allow it.

Instead, some analysts think that the Mayor has more Machiavellian motives for talking about the commuter tax. Among the many proposals Mr. Bloomberg could potentially send north to Albany, few are as fraught as this one. The central figure in the abolition of the commuter tax—which cost the city about $500 million a year—was none other than the Mayor’s stadium nemesis, Sheldon Silver.

If Mr. Silver’s high oratory against the stadium (“This fight is about restoring New York City’s soul”) marked an apex in his political career, his infamous repealing of the commuter tax in 1999 was the low point.

The repeal of a tax that John V. Lindsay pushed through the State Legislature in 1966 resulted from little more than a game of political brinksmanship. Mr. Silver, a Democrat who runs the State Assembly as firmly as Mr. Bruno runs the State Senate, proposed the elimination of the tax because it had become an issue in a special State Senate election in suburban Rockland County in 1999. Democrats were hoping to win the seat and thus cut into the Republican majority in the Senate. Elimination of the tax, a sore point for anti-tax Republicans in the suburbs, seemed to enhance the Democrats’ chances. (They lost anyway.)

At least one prominent state Democrat, who wished to remain anonymous so as to maintain neutrality between Mr. Silver and Mr. Bloomberg, said he believed the commuter tax to be a genuine part of the Bloomberg administration’s Albany agenda. The source added that the antagonism between the Mayor and the Speaker did factor, at least in part, in Mr. Bloomberg’s decision to press for the tax’s reinstatement.

But a more widespread sentiment has it that the tax is more useful to Mr. Bloomberg as a way to frame the argument that city residents suffer from an unfair, almost parasitic relationship between the city and the state.

“The Mayor getting out in front and talking about the imbalance between what New York City contributes and gets from the state is tremendously important. He doesn’t need to get the commuter tax to succeed in reducing the disgraceful inequity in the state’s funding to the city—it’s a drop in the bucket,” said State Senator Eric T. Schneiderman, a Democrat from Manhattan. “If this is an indication of the things he is going to fight for, it’s a positive sign for what we can expect for the next four years.”

Waiting for Spitzer?

With lame-duck Governor George Pataki focusing on a possible Presidential campaign in 2008, some politicians suggest that Mr. Bloomberg is simply biding his time before articulating which issues he plans to emphasize in his second term. Attorney General Eliot Spitzer, the overwhelming favorite to win the Democratic nomination for Governor next year, is seen as more responsive to the city’s needs than Mr. Pataki has been.

“[The commuter tax] could be easily restored if you had a Governor who wanted it,” said Assemblyman Daniel O’Donnell. “Everything is a question of political will.”

Jordan Barowitz, a spokesman for the Bloomberg administration, said it was still premature to discuss its second-term legislative strategy.

“No campaign has been launched. That’s not to say that, in the future, a campaign won’t be launched,” said one City Hall official, referring to the commuter tax. “There is no Albany agenda right now. “

But some analysts and partisans for the city’s interests say that by waiting, Mr. Bloomberg risks letting his dizzying poll numbers fall and his political capital go to waste.

“It’s somewhat disappointing that they don’t know,” said Doug Muzzio, a political-science professor at Baruch College, referring to City Hall’s insistence that it has no Albany agenda yet. “It’s indicative of the management-not-leadership approach of this Mayor. The fact that they haven’t articulated an approach and might not have an approach—it seems a lack of vision here.”

The City Hall official suggested that the Mayor’s annual budget speech in January could partially unveil an agenda, but political observers are eager to see how Mr. Bloomberg intends to exercise his influence—or perhaps exact his revenge—on Mr. Pataki, Mr. Bruno and Mr. Silver, the men who killed his stadium plan.

Except for strengthening the city’s position in the redevelopment of Ground Zero, the Mayor has been loath to pick a fight with Mr. Silver or the other Albany power brokers, and has been attacked by Democrats for his inability to sway his fellow Republicans upstate. Still, it isn’t clear what he would gain from adopting a more abrasive attitude now.

“If you turn to Albany, you don’t want to antagonize one of the three players, especially with a lame-duck Governor,” said one political insider. “You’re going into an issue where Shelly, as part of the state government, has real clout. At this stage of the game, it would be kind of gratuitous to go after Shelly. There is so little to be gained and so much to be lost, it doesn’t seem smart—it doesn’t seem like Michael Bloomberg.”

“The Speaker has proven to be a resilient political player. It makes sense for the Mayor to work with the Speaker,” said Mr. O’Donnell. “Politics is not about yesterday’s battles, it’s about tomorrow.”

Mr. Bloomberg may resist any obvious shots at Mr. Silver, but he has already tried, like Mr. Giuliani before him, to reinstate the commuter tax. He did so in 2003, when he not only proposed the tax’s revival, but at more than five times the previous rate, which had been 0.45 percent of a commuter’s wages. That proposal was promptly crushed. But Mr. Bloomberg didn’t come away empty-handed, as the state eventually agreed to pitch in $2.5 billion to cover old city debt.

“It’s all a game, just like it was in 2003,” said Edmund J. McMahon, who heads the conservative Manhattan Institute’s Albany branch and frequently criticizes the Mayor’s tax hikes. “There is absolutely zero chance that [Albany] would approve [a new commuter tax]. That’s the kindest way to put it.”

Mr. McMahon believes that the commuter tax is consistent with Mr. Bloomberg’s purported vision of the city as a “luxury product,” a place where the rich come to make and spend their money. But supporters of the tax point out that up to about 40 percent of commuters come from Connecticut and New Jersey, meaning that a sizable chunk of the people shouldering the tax burden wouldn’t be New York residents.

Liberal members of the City Council see the tax as crucial to lowering the city’s deficit. In a recent debate among seven Council members running to become the body’s next Speaker, all but one said they felt that a reinstatement was a real possibility.

“We’ve already gotten several things that we weren’t supposed to get. Yes, it’s negotiable, it’s realistic, you can fight for it. And if the State of New York needs anything from the City of New York, they had better do that for us,” said City Councilwoman Melinda Katz of Queens.

But unless there’s a dramatic change of heart in the Long Island or upstate suburbs, the tax is likely to stay buried. And Mr. Silver’s legacy is likely to live on.

Indeed, Mr. Muzzio said that the Mayor must be thinking of some strategy beyond the commuter tax.

“It’s hallucinatory,” he said. “If this is really part of the agenda and he really thinks he’s going to get this, forget it. It’s got to be something else; it must be signaling something else.” Mike’s Stadium Revenge:  A Tax To Shell Shelly