Will Spitzer Stiff New York?

With good reason, city voters figured they would have a friend in Governor Eliot Spitzer, a city resident himself, a Democrat, and a man of tremendous promise who surely understands that the state depends upon the city for its economic survival. But according to Mayor Michael Bloomberg’s office, the new Governor’s budget is anything but friendly to the city. That’s cause for alarm.

There’s no question that Mr. Spitzer inherited a mess when he took office from George Pataki earlier this year. Hard decisions had been ignored for years. Albany’s get-along, go-along culture had reached new depths of selfishness and parochialism. The budget process had broken down.

Mr. Spitzer vowed to change the way Albany went about its business. His budget, with its demands for huge changes in the state’s health-care system, is a reflection of that urge to reform.

But, at the same time, the Governor has proposed fiscal changes that seem likely to hurt the state’s economic powerhouse, New York City. First, Mr. Spitzer’s budget proposes the elimination of $327.9 million in annual state aid to the city. Second, Mr. Spitzer has proposed closing tax loopholes that may lead to business flight from the city.

Mayor Bloomberg’s normally reticent budget director, Mark Page, sounded the alarm in no uncertain terms the other day, warning that Mr. Spitzer’s proposals may lead to a deficit of some $860 million in the fiscal year beginning July 1. City Hall’s plan to cut property taxes by about 5 percent, eliminate the city sales tax on clothing and reduce some corporate taxes may have to be scrapped, Mr. Page said.

Even worse for the city’s long-term financial health, Mr. Page said he is concerned that financial-services firms may choose to leave New York if their taxes increase—which, in effect, they will if Mr. Spitzer succeeds in closing several loopholes. Citigroup, for example, already has made worrisome noises about Mr. Spitzer’s proposal. The financial-services giant, which employs 26,000 people in the city, figures the Governor’s plan will cost it about $60 million a year.

Mr. Page noted that if “it’s more expensive to be located here, that’s obviously a major incentive to be less located here.”

That’s exactly what the city learned in the 1970’s, when high taxes prompted businesses—and families—to move to less-expensive areas. In the years since New York’s fiscal collapse, capital and labor have both become even more mobile. In fact, some observers believe that London is gaining on New York in the competition to be the world’s financial capital.

At the moment, Mr. Spitzer’s proposals are just that—proposals. Mayor Bloomberg will have a chance to make his case to the Governor, the Legislature and the public at large. But in the course of doing so, Mr. Bloomberg faces a delicate task: Relations between mayors and governors are notoriously bad, but even so, Mr. Bloomberg doesn’t want to make an enemy of Mr. Spitzer so early in the new Governor’s administration.

At the same time, one hopes Mr. Spitzer’s overly confrontational style will evolve into something that showcases his immense talents rather than obscures them.

Sharpton’s Barack Attack

Over the past several years, the Reverend Al Sharpton has been trying to clean up his act and be taken seriously as a leader in New York’s black community and a national public figure worthy of respect. The tracksuits he favored during the time he perpetuated the Tawana Brawley hoax have long since been replaced by natty pinstripes. Less in evidence, too, has been the Reverend Al who, at a rally outside Freddy’s Fashion Mart in Harlem, exhorted the crowd to oust the “white interloper” who ran the store; a street vendor subsequently set fire to the store, and seven people died. And it’s been some time since he was buddy-buddy with virulent anti-Semites such as Khalid Muhammad and Louis Farrakhan—at least in public. In any event, the repackaging of Al Sharpton was successful enough that he managed to run for the Democratic Presidential nomination in 2004 without being dragged off the stage (which may have said more about the state of the Democratic field than about Mr. Sharpton).

And so one might think that the candidacy of Senator Barack Obama would call upon the better angels of Mr. Sharpton’s nature, and that he would greet the appearance of a black Presidential candidate—one with serious financial backing, broad public support and bracing charisma—with enthusiasm and fellow feeling.

No such luck. As the New York Post’s Fred Dicker reports, Mr. Sharpton is beside himself with anger and indignation over Senator Obama’s candidacy, and is reportedly working behind the scenes to do what he can to derail the Senator’s chances. According to a prominent black Democratic activist, the petulant Mr. Sharpton is telling people that Mr. Obama is “a candidate driven by white leadership.”

Once again, Mr. Sharpton’s grandiosity has trumped his generosity. The good reverend cannot abide the fact that Senator Obama has achieved a star power which far eclipses his own, and that he did so through hard work, with class and style, rather than the Sharpton method of publicity stunts, financial shenanigans and racial demagoguery.

That’s not saying, of course, that Mr. Sharpton needs to vote for Mr. Obama or publicly sing his praises. It’s possible he believes that Senator Hillary Clinton is the better candidate, and it would be ludicrous to suggest that Mr. Sharpton should support Mr. Obama based on skin color. But if Mr. Sharpton were truly the community leader he claims to be, he would at the very least greet Mr. Obama’s historic campaign with appreciation and quiet dignity. Instead, he sees only a man who is pulling the spotlight off of Al Sharpton. The tracksuits may be gone, but the narcissism and unchecked egotism remain intact.

Of course, having Al Sharpton as an enemy is not the worst thing in the world for Barack Obama. In fact, it’s a blessing. Editorials