Train Runs Over Rudy

Mayor Stands Up For City, Gets Clobbered By Runaway Commuter Tax Cut

Too-cute Bruno and too-cute Rudy had been outmaneuvered by an even cuter Silver, with the $360 million tab for all this intrigue consigned to a temporarily fat city budget, with leaner days just around the corner.

Giuliani immediately enlisted his tethered tabloids in a banner-headlined campaign against the tax cut, potentially deepening the damage the issue may do to his statewide ambitions. Connor said revulsion over the tax is "an article of faith" throughout the suburban belt. When it's been renewed over the years, Albany observers note, suburban members from both parties have been released to vote against it and a bipartisan majority has been quietly crafted in both houses.

Two of Giuliani's potential Senate opponents— Republican Rick Lazio and Democrat Nita Lowey— have already come out in favor of the bill. A Suffolk congressman tied to Pataki, Lazio assailed Giuliani for doing it "Mario Cuomo's way," claiming that the mayor's commuter tax position was: "Punishing work. Killing jobs. Hiking taxes."

Lowey, whose Westchester-dominated district also includes almost 200,000 Queens and Bronx residents, told the Voice through a spokesman that "commuters already pay for services through the sales tax," contending that "Giuliani has been picking the pockets of commuters for too long." Lowey had never before taken a position on the tax, her spokesman conceded, suggesting that statewide ambitions were having more of an effect on her posture than they were on the mayor's. The fourth possible candidate, Hillary Clinton, only answers questions about her marriage.

Giuliani helped put himself in this spot. His budget proposal, announced in April, seeks $405 million in tax cuts for the coming fiscal year, reaching $627 million in 2003. Council Speaker Peter Vallone has made tax-cut fever the linchpin of his ongoing budget negotiations with the mayor, opening the door for fellow Democrat Silver to contend that the city can surely do without the commuter revenue. It's ironic now that Vallone and Giuliani are whining about the budget hole the commuter cut will create, when it's a smaller cut than they were already entertaining, and no tax-cut menu is truly affordable if the new millennium budget gaps are realistically estimated.

The mayor also got himself behind the eight ball by letting his statewide and national goals frame policy on an array of recent issues, drawing the increasingly critical attention of the Times editorial page and others. A May 9 Sunday editorial questioned whether Giuliani's "stepped-up pressure" on vouchers, social promotion, and the dismantling of the Board of Education were motivated by his campaign agenda, "bluntly" asking: "Will the mayor's political ambitions harm New York City?"

An April editorial raised the same question about the mayor's recent flip-flop on the regulation of wetlands development near the city's upstate reservoirs, citing "charges from the environmental community" that Giuliani had "allowed his statewide political ambitions to compromise his commitment to watershed protection." Robert Kennedy Jr., the leading defender of the watershed, wrote a Daily News op-ed piece charging that "the gravest threat to city drinking water is a mayor with statewide political ambitions," adding that "dramatic concessions to upstate political interests by the Giuliani administration" over the last six months had "endangered the safety" of the water supply.

Having exposed himself on these flanks as more Senate or vice-presidential candidate than mayor, Giuliani had little wiggle room on the commuter tax. Dick Morris, the onetime political adviser turned pundit, suggested on NY1 last week that Giuliani would have been smart to endorse the cut while demanding that the legislature replace the lost funds with some dedicated future revenue stream. But that would have compounded an already too-cute series of maneuvers, and may have fallen flat in a city instinctively wary about the mayor's campaign conflict of interest.

Tom Mcmahon, the City Council finance committee director, says that the STAR property tax-reduction bill, pushed through the legislature in 1997 by Pataki with Silver's acquiescence, "gave suburban homeowners a billion-dollar annual break— twice the size of the break that NYC residents get."

Every assessment of state subsidies to the MTA has shown that, just like the school aid formula, they're tilted toward the suburbs to the detriment of the city. Similarly, the city's share of the Medicaid tab hovers around 19 percent, while the rest of the state picks up only 15 percent. If the city paid at the Medicaid rate for the rest of the state, we'd save $560 million a year.

Yet every fool north of the Bronx believes they are carrying the city on their tax-burdened backs. It just doesn't register that the city gets 85 cents back on every dollar we send to Albany. Indeed Rockland voters are apparently so mesmerized by this paltry commuter charge that the pros in both parties believe it could decide an election even though the county's commuters pay only $10 million a year, accounting for 2 percent of the total raised by the tax.

Just the billion dollars in this year's budget plan for stadiums justifies the commuter tax, since Yankee surveys have demonstrated that 59 percent of the current stadium visitors come from the suburbs, with New Jersey and Westchester pinstripers outnumbering fans from the city.

The same week the commuter tax controversy exploded, Worth magazine published its annual list of America's toniest towns, based on median home prices in 1997 and 1998. Matinecock out in Nassau County ranked 11th, with homes selling on average for more than a million dollars. Other Nassau, Suffolk, and Westchester towns that balk at a tiny commuter tax crowded the list. The Justice Department is pressing Nassau, by the way, to reassess its residential property, since property taxes are still based on 1938 construction prices, benefiting the richest homeowners against the poorest.

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