By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
With New York City nonresident employees paying a puny 11 percent of the payroll tax rate for residents, less than in virtually any major city, the ongoing legislative move to kill the commuter tax is a declaration of regional war.
If suburban sponges won't pay a ratty average of $180 a year less than half a percent of their income to cover a fraction of the cost of the services they soak up from this city, they should have to hold their bowels every day until they can make it to a suburban sewer, and they should only be allowed in and out of town on state highways, bridges, or tunnels.
The commuters who travel by train should also see an end to their city subsidies. At least two-thirds of them ride a subway to their jobs after they get off Metro North or the Long Island Railroad, and this year's Transit Authority operating budget contains $230 million in city contributions, to say nothing of the $1.4 billion in city-financed capital improvements to the system planned for the next decade. Incredibly, the city "also provides over $63 million directly to the MTA to maintain Metro-North and LIRR stations in the five boroughs and for operating assistance for the commuter railroads," according to this year's budget message.
Rudy Giuliani stood up for his city last week when his own party's two Albany leaders, Governor George Pataki and Senate Majority Leader Joe Bruno, abandoned a 33-year token tax on commuter income, renewed routinely every two to four years with bipartisan support. Bruno actually put out a press release all but announcing he was passing the bill to gain a momentary advantage for Republican candidate Tom Morahan in a May 25 Rockland County special senate election. Not since Giuliani endorsed Mario Cuomo in 1994 has the mayor made it clearer that the city's interests, at least on a big-picture issue like this, transcend his own.
The surprise was that our first suburban governor and the cowboy senator from Rensselaer were joined by the Lower East Side's Shelly Silver, 60 percent of whose Democratic majority in the assembly comes from the city. To neutralize the issue in the Rockland race and take it away from Republicans forever, the speaker made the stunning announcement last Wednesday that he would push the bill through his own chamber as soon as the senate passed it. The bill would initially eliminate the tax only for New York commuters, but a New Jersey lawsuit is expected to quickly kill it out of state as well.
What no one in the media noted was that Silver had hosted the regular meeting of his Democratic conference the same day and restricted the discussion to a weapons bill, never mentioning his own simultaneous evisceration of the party's long-standing support of the tax. The 98 Democratic members found out about Silver's tangled tactical tank job the same way we did by reading about it in the newspapers at home on Thursday. Locked out of the decision-making process, most city assembly Democrats nonetheless seemed poised to roll over and vote against their hometown this week anyway, joining salivating suburban and upstate legislators of both parties.
Silver said he did it for his 16 suburban members, some of whom, led by Westchester's Dick Brodsky, had actually joined the Democratic candidate for the Rockland seat, Ken Zebrowski, at a press conference calling for the repeal before Bruno said he'd sponsor the bill. That's the way the speaker has long made policy by letting the whims of the most marginal districts set the party's agenda, even though the Democrats' 46-vote majority is invulnerable, compared with the GOP's five-vote hold on the senate.
No doubt Silver's real motive was to help Senate Minority Leader Marty Connor gain the Rockland seat by trumping Bruno's commuter card. While Bruno and Silver already had a testy relationship unusual for the ordinary Albany byplay between legislative leaders of different parties, Silver's gambit for Connor signals an all-out war, smashing the "gentlemen's agreement" that has undergirded capital politics for decades. Since Silver and Connor's districts overlap, they have long been allied, and they are now making a play together that no prior speaker in modern memory has been willing to make for his senate counterpart.
In a Voice interview, Connor put the blame for a tax-cut bill even he wouldn't defend ideologically on the mayor who's leading the charge against it: "The speaker indicated to me that he called the mayor early, before Bruno issued his press release on the bill, and told Giuliani about it. He asked Giuliani to call Bruno to stop it. Giuliani said his lobbying office would be issuing a memo in opposition to the bill, but that he wasn't inclined to speak to Bruno. A memo isn't exactly Rudy Giuliani's bully pulpit."
Connor believes that Giuliani "was counting on a wink from Bruno," who is ironically the mayor's strongest statewide backer in the U.S. Senate sweepstakes for 2000. Giuliani was betting, just like Bruno, that Silver would be forced to kill the repeal and that Republicans would benefit in the Rockland primary. In fact, Giuliani may have interpreted the Silver call as a sign of how desperate he was for someone else to bail him out of a perilous dilemma. Once Silver pulled his Nixon-to-China surprise, however, the dilemma wound up in Rudy's hands.
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.
Ralph Nader also wrote an op-ed piece in the Times this week, laying out just how much in property and sales tax breaks, and sometimes direct grants, the Giuliani administration is giving giant corporations, theoretically at least to keep them in New York. These are the companies that employ many of the 800,000 commuters who get the city's best jobs, earning three times what the average resident earns. Thanks to decades of corporate welfare, starting with Ed Koch and blossoming under Giuliani, and now thanks to Joe Bruno and Shelly Silver, neither the commuters nor their companies will be underwriting the city they depend on for survival services.
The sole justification for the gutting of this tax is greed. But in an era of transparent, top-down, class politics, it's become our only political value.