NY Daily News Calls for "Radical, Dramatic Action" to Clean Up New York

Countdown to disaster: Albany keeps ducking hard budget choices
The New York Daily News - EDITORIAL - February 6, 2010

Only radical, dramatic action by Gov. Paterson and the Legislature now stands between New Yorkers and severe damage to the quality of life. With each day, the state and city governments sink ever deeper into financial ruin because of plummeting tax collections. Paterson's two-week-old plan for balancing the books is suddenly short by an additional $1 billion. And the Metropolitan Transportation Authority has watched $350 million simply evaporate. Paterson and the Legislature would produce dire consequences should they hold to their traditional approaches to budget balancing.

They would:

• Force the NYPD to lay off 3,150 cops, a move that would likely reverse the city's hard-won victories over crime.
• Drive the schools to lay off 8,500 teachers, pushing up class sizes and threatening to reverse student achievement gains of the last five years.
• Compel astronomical hikes in subway and bus fares, and deep service cuts.
• Close firehouses, increasing response times to emergencies.
• Shutter libraries that are already cutting back hours in Manhattan and Queens.

And worse and worse. America's Great Recession and the damage done to Wall Street have dealt powerful, long-term blows to New York's economy and, with it, tax revenue. As a result, Albany has no choice but to reduce expenses. Paterson proposed a budget that did so by inflicting all the above horrors - before he lost that $1 billion and before the MTA went $350 million deeper into the hole. So now what? The public employee unions have begun to call for tax hikes. New York State United Teachers, for one, has urged imposition of a levy on stock transfers with the goal of raising $3 billion annually. This would be reckless insanity. The tax would drive out stock trading, irreparably weakening New York City as the world capital of finance. As for other levies, there will undoubtedly be a push for a new round of a so-called millionaire's levy. This, too, would be destructively nuts. New Yorkers who make more than $250,000 now pay combined city and state taxes at the highest effective rate in more than 30 years. And President Obama has targeted these top earners for a new federal hit in the elimination of President George W. Bush's excessive tax cuts. Adding to the state burden would create an incentive for some to leave New York - with all their tax payments. Lest you say, "Let them go," consider the following astounding statistics: Of 3.7 million tax filers in the five boroughs, the top 5,000 accounted for almost 40% of all the income taxes paid to the city. Meanwhile, half of those 3.7 million filers have been fully exempted from local income tax because their wages fall below the taxable limit. That's progressive taxation, and it's the right policy. But when a city of 8 million is so dependent on revenue from a mere 5,000 people, you can't afford to lose any of them. What's urgently needed is a budget that moves New York toward fundamentally reforming its expenses - in particular, the cost of workforces whose pensions and benefits far exceed those in the private sector and who remain, even now, in line for annual pay hikes of 4% a year. The tradeoff is clear. Invest the money there or in maintaining public safety, education and transportation. This is not a close call.