When Governor Eliot Spitzer proposed his $124 billion budget last week, the sound you may have heard was the city treasury flowing upstream. Simply put, Governor Spitzer is using New York City as if it were an A.T.M. machine: His budget would take money from the city and redistribute it to upstate counties and suburban communities, thereby damaging the city’s economy—the very economy that, long term, keeps the state afloat.
Mr. Spitzer’s motives may be understandable—he’s facing the rising costs of state government and a slowdown in the state’s economy—but his methods are regrettable. Rather than impose fiscal discipline on his own state government, he has decided to take money from New York City.
On Monday, Mayor Michael Bloomberg went to Albany and pointedly reminded the governor and the State Legislature that the city is responsible for 56 percent of the income tax collected by the state and 46 percent of the business taxes. The city already sends $11 billion more to Albany than it gets back. Without a strong and vibrant New York City, New York State would quickly find itself plunging toward fiscal crisis.
And yet the Spitzer administration’s proposed budget fails to recognize the vital role of the city in the state’s economy. Absurdly, Mr. Spitzer is claiming that the state rescued the city during the 1970’s fiscal crisis, and so the city must now do the same for upstate. This assertion should come with a laugh track; the governor is rewriting history to serve his own political interests. While it is true that Governor Hugh Carey led the effort to restructure the city during the fiscal crisis, the actual solution was brought about by drastic layoffs and cutbacks in city services, and by the strategic assistance of unions and banks who invested in bonds to help the city through the rough times. It was City Hall that fired teachers and police officers, cut back on pensions and benefits for city workers and closed hospitals as part of the package designed to save the city. Until Albany finds the political will to take its own drastic steps to control state spending, the city is certainly under no obligation in 2008 to send our precious resources north.
A few of the more egregious excerpts from Governor Spitzer’s budget include shifting public assistance costs from the state to the city, thereby increasing the burden on the city by $40 million; and the governor’s failure to keep his commitment to restore $164 million in revenue-sharing funds cut last year. Furthermore, the state wants to impose an additional $10 million fee for processing city income tax filings, for which there is absolutely no justification—the state already raised the fee for processing the city’s tax forms last year from $40 to $75 million. To top it off, the state wants to cut aid to city schools and also curtail its commitment to sharing the cost of school construction.
The governor surely knows he’s risking long-term economic benefit for short-term political gain. Over the next several weeks of negotiations, we urge the State Senate’s majority leader, Joe Bruno, and Assembly Speaker Sheldon Silver to join with Mayor Bloomberg in making sure the final budget restores both the funds for the city and a measure of sanity to Albany.
