Read My Lips

Pataki's No-Tax Vow Is Salt to City's Wounds

All four of the city's dailies endorsed George Pataki barely two months ago. Listen to what their editorial pages are saying now:

The New York Post ruminated about the governor's predilection for "blaming Osama bin Laden for all of New York's woes" and complained that he's "never even hinted at the fact that much of the state's current crisis is driven by cynical, profligate, re-election-focused budgeteering." The solution? "Fiscal solvency resides in the repudiation of Pataki's election-year alliances—and the reclamation of the booty distributed to confirm them."

The New York Times has discovered that "the state of New York State is Mr. Pataki's mess," noting that he has "far more unfulfilled promises than accomplishments." The paper accused him of "running for office on a feel-good budget" and draining surpluses and "one-time bonuses to camouflage the widening hole" in state finances.

It took 55 minutes for the Governor to say "No" at his State of the State address in Albany last week.
It took 55 minutes for the Governor to say "No" at his State of the State address in Albany last week.

Newsday assailed Pataki for "a continuation of his deceitful re-election campaign," accusing him of "ducking serious issues and promoting the illusion that things weren't as bad as he had to admit after the election." The Daily News was the most muted of the revisionist editorial boards, but still concluded on the eve of Pataki's inaugural that he spent "most of the year denying there was a problem."

The reason incumbents dissemble in campaigns is because the opinion makers who frame media coverage not only allow them to do it, but join them. Pataki could care less what these editorial pages say about his past policies now; he got their imprimatur, caveats and all, when it mattered. Unlikely to run again in New York, Pataki is playing to a national partisan and ideological audience now, angling for a Bush or post-Bush place in the sun. As the flagship of the Murdoch-GOP combine, the Post still matters to the chameleon governor—and its post-election rants about tax hikes may have helped prompt his State of the State resistance to them—but the other three, particularly the Times, have already served their maximum purpose.

When the Democrat who was challenging Pataki, Comptroller Carl McCall, released the detailed report his office's professional staff prepares every year assessing ongoing state finances, none of the four dailies wrote a word about it. McCall's experts warned then that the current budget fails "to address the imbalance the state will face next year and beyond," even as Pataki stonewalled and pandered.

Two days after McCall won the nomination, the Times went so far as to suggest that he had "approved" this year's transparently deceptive budget when he signed off on a legally mandated release permitting legislators to receive the back pay that was withheld until the budget was approved. The paper made no such contention when it used his fiscal expertise to endorse McCall in the Democratic primary, ignoring Andrew Cuomo's high-decibel attempts to pin that supposed certification on the comptroller. The effect, however, of the Times' belated and bogus scapegoating—denied emphatically by McCall in a published letter—was to take the budget off the table as a critical comparative measure of the candidates.


Every indication is that Pataki will attempt to close the largest gap in state history without raising any taxes, even while he foists new tuition and transit tariffs on middle- and working-class families. His State of the State lesson plan on "job-killing" tax increases was greeted warmly by Mayor Bloomberg, who sat next to Libby Pataki and rose to applause when singled out by the governor. Bloomberg, who knows a lifetime more about the factors affecting business location decisions than a governor who's been in public office for 21 consecutive years, just imposed a gigantic property tax increase and is seeking a reinstatement of the commuter tax.

There is no clearer contrast. Bloomberg has repeatedly contended that vital services, more than tax levels, influence corporate and employment decisions. His approach to what was once a $6 billion city gap, cut in half now by the actions he's taken, is a reasonable mix of agency reductions and revenue boosts, a formula Pataki rejected in last week's speech. Bloomberg is even willing to publicly contemplate laying off cops as a way of forcing Pataki and Senate leader Joe Bruno to approve a commuter tax, one expressly linked to maintaining NYPD force levels (and firehouses), as were the income tax surcharges of the early '90s.

If Pataki genuinely believes tax hikes are such bad policy that they can't even be part of the response to the worst state crisis since the Depression, why did he allow the budget to grow at four times the rate of inflation over the last six (mostly flush) years? Why did he refuse to use part of the '90s surplus to pay down the carnivorous state debt? Didn't he realize that his 43 percent spending explosion—from $63 billion to $90 billion—would fuel the demand for tax increases when the existing revenue stream could no longer support it? Didn't he understand that the $5 billion boost this year—a 6 percent increase even after he learned back in April that he'd overestimated tax receipts by a billion and a half—would just make the inevitable cutbacks all that more painful?

The newspapers that endorsed Pataki are supposed to be voices for this city and its people. Yet he was given a pass when he failed in both his inaugural and State of the State speeches to say a word—even his usual banal generalities—about what he will do for a city he constantly invokes for its 9-11 symbolic value.

The only "aid" the governor appears prepared to give the city is severe Medicaid cuts—precisely what he did in 1995, the budget crisis he repeatedly cites as proof that he knows how to handle one. When the governor proposes his budget in the next few weeks, expect him to push for cuts in Medicaid-covered services, which are paid for by matching federal, state, and city dollars. If the state cuts half a billion in Medicaid expenses, the city will automatically save hundreds of millions in matching funds.

Bloomberg's top deputy mayor, Mark Shaw, was Rudy Giuliani's budget director in 1995, when Pataki sought $800 million in Medicaid and welfare cuts, and Giuliani was so appreciative he asked for $400 million more. While Bloomberg is fixated on the state picking up the city's share—which no other state requires—Shaw said in 1995 that Pataki's cuts provided "five times more budgetary relief" than a gradual state takeover would have. Don't be surprised if Pataki, joined by the inexplicably obsequious Bloomberg, finds a way to describe a sharp reduction in state Medicaid funding for the city as if it were aid.

Since the near bankruptcy of the mid '70s, New Yorkers have heard alarms every time a governor or mayor has proposed a budget, even in years of surplus. By now we think gaps are as endemic with budgets as lies are with politicians. The cuts that are frequently used to frighten us aren't cuts at all, just reductions in the projected rate of expenditure growth. But this time the theater is really ablaze. Even the actors are in shock, especially the guy at center stage who talks out of the side of his tilted mouth.

Since George Pataki cannot raise taxes without disproportionately affecting the well-to-do classes his tax cuts disproportionately benefited, he will find ways to shift the burden to people he is more comfortable punishing, starting with the 150,000 students whose striving, moderate-income families support them at state universities. Though New York's tuition and fees already are among the highest in the land, Pataki raised them in 1995, was blocked by the legislature twice since then, and thinks hard-pressed parents will find a way to pay the price. The one thing he knows is that his new constituency—the national right-wing elites—won't hear their bellows, or care about their sacrifice.

Our governor has moved on.


Research assistance: Solana Pyne, Steven I. Weiss, Cathy Bussewitz

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