Governor Paterson Means Business

Spitzer's successor disses his bad old radical self

Paterson appears to have bought the notion that higher personal-income taxes cause the rich to flee. This may be the teachings of The Fountainhead, but there's no real-world evidence for it. Were it so, New York's wealthy would long ago have escaped to places like Georgia, where politicians make sure that millionaires pay the same tax rate as day laborers. As Frank Mauro, the tireless pro-union advocate of the Fiscal Policy Institute in Albany, points out, the rich have not even fled their estates next door in New Jersey, which has long taken an extra bite—almost 9 percent—out of the incomes of those making over $500,000.

What does cause people to move or stay away, says Mauro, is a decline in public services. "Our fear is that if you try and close a budget gap of the magnitude that the governor is projecting, you will be inevitably cutting services that are important to low- and middle-income families," he says. "We know that expenditure cuts put more drag on the economy than high-end taxes."

The shorthand terms of art these days to suggest that the rich can take a little nick here and there are "fiscal fairness" and "shared sacrifice." This fall, some 100 nonprofit groups whose budgets are on the cutting table launched an aggressive new coalition aimed at body-blocking the cuts and pushing lawmakers to spread the pain around. Dubbed "One New York," the coalition has been dispatching members to Albany and City Hall to get its point across. "An economic downturn is not the time to disinvest from job training, English classes, day care—all those services that we provide that help people get into, and stay in, the workforce," says Nancy Wackstein, director of United Neighborhood Houses, who joined a large demonstration in front of City Hall this month.

Wackstein knows hard times when she sees them. She was City Hall adviser on homeless issues in the early '90s, when the crisis was defined by some 800 new homeless families entering the city's shelter system each month. Last week, the Coalition for the Homeless announced that that figure is in history's rearview mirror: Some 1,500 families—an all-time high—sought shelter in September.

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