Solution to Budget Crisis Lies in Taxes Not Cuts

Governor William Patterson has called for a special session of the State Legislature to address the State's growing fiscal crisis . Unfortunately, his solution is to make one of the worst budgets ever even worse for working people by cutting deeper.

Patterson has proposed 7% across the board cuts in all programs (there goes the "restored" education budget.) and a state-wide hiring freeze. Sadly, he has simultaneously downplayed taxing the rich.

According to the New York Sun, Nobel Prize-winning economist and Patterson economic advisor Joseph Stiglitz, recommended a different solution to the gov:

"New York, like most states, is now facing an unenviable choice: either taxes have to be raised, or expenditures cut," Mr. Stiglitz wrote. "When faced with such an unpleasant choice, economic theory and evidence gives a clear and unambiguous answer: it is economically preferable to raise taxes on those with high incomes than to cut state expenditures,"

wrote Stiglitz.

Back during the budget debate, Assembly Speaker Sheldon Silver championed a 1% tax surcharge on millionaires which would have filled much of the budget gap. Recently departed Senate Leader Joe Bruno wouldn't let the measure come out of committee. The budget compromise included no new taxes on the mega wealthy or big corporations.

A while back the New York Times reported that many millionaires have no problem paying their fair share, especially during a recession:

“I’m happy to do it,” said Arlyn Gardner, who did not hesitate to declare herself wholly in favor of a plan to raise income taxes on New Yorkers who earn more than $1 million a year. (That would include Ms. Gardner, a prominent philanthropist who splits her time between two homes, one on Fifth Avenue and one in Rye, N.Y.)

“I read about it, and I thought, ‘A lot of people won’t agree with this.’ But I say, ‘Why not?’ We pay taxes to help those who need it.”

Donald Trump is one who does not agree with the idea. “Foolish,” as he put it in a recent telephone interview. “I think it’s a great idea — if you are looking to force rich people to move to states like Florida,” said Mr. Trump, dismissing the notion that the wealthy should be expected to shoulder the burden when times get tough.

“In times of financial distress, the rich get hurt also,” Mr. Trump added.

Poor Donald. The rich cry too, apparently.

Fact is, the debate about how to address the State's fiscal crisis and the general economic crisis in the country has been topsy-turvy. Thirty years of market extremist ideology and right wing rule has made "tax" a dirty word and narrowed the range of solutions in Washington, Albany and City Hall.

As Stiglitz points out, cutting social services is much worse for the economy than raising taxes. Government layoffs, and reductions in benefits and services that lead to less cash in the pockets of low-income and other working people all adds up to slowing the economy.

The argument that increasing taxes on the rich and the big corporations will slow the economy just don't hold up. Taxes on the rich are low. profits are up and wealth is increasingly concentrated in the hands of a few. A limited tax will not drive the jet-set from their Park Avenue suites to their Summer homes on the Cape.

Remember, the way we got out of the Great Depression wasn't by trimming our way out of the crisis. The government spent its way out of the crisis. Putting people to work on government public works and public services jobs means cash in pockets of people that actually spend it. This is the way to get the economy going. It was rampant unproductive and highly speculative investment in energy, housing and financial markets which caused this crisis. The "market" on its own, won't get us out.

The main measure of the budget's success should be its impact on the working people of our state.

Let's put pressure on our State Legislators to put the millionaire's tax back on the table and to say no to any additional cuts. Then come November, let's ensure that a new President and a new Congress are motivated to put millions of Americans back to work rebuilding this country for the Green Millenium.

In the shadow of NASDAQ, Dominican Americans decry gas speculation

"RI State Senator Juan Pichardo speaks against oil
speculation surrounded by other Dominican American
elected officials and community members outside
NASDAQ in Times Square, July 30, 2008."

NEW YORK—A group of Dominican American and other Latino elected officials with dozens of community members protested petroleum speculation here in Times Square July 30. Called by the League of Dominican American Elected Officials and hosted by New York State Assembly Member Adriano Espaillat, the protest was held outside the headquarters of NASDAQ, which trades oil futures.

“We are here to address rampant unregulated speculation conducted in the NASDAQ trade market,” said Espaillat, who is co-chairman of the league. He and other speakers blamed market speculators and deregulation of the oil markets for the unprecedented oil and gas prices in working-class Dominican American communities in the U.S., and in the Dominican Republic. The national average for a gallon of gas in the United States is now $3.89 and in the Dominican Republic gas tops $6.00 a gallon, according to some reports.

Speakers blamed the staggering gas prices on the Commodity Futures Modernization Act of 2000, which opened the door to speculation on energy commodities. U.S. gas prices have more than doubled since the act was passed. The league is supporting legislation introduced by Senate Majority Leader Harry Reid (D-Nev.), which would reestablish some regulation to curb such speculation. President Bush vetoed an attempt to reform the act earlier this year. Espaillat told reporters that Congressional Republicans attempted to kill Reid’s bill by introducing offshore drilling proposals into it last week.

“This winter in New England is going to be a difficult one,” said Rhode Island State Senator Juan Pichardo, referring to predictions of high heating-oil prices next season. “We are stepping up not only for congressional action but to build an alliance with [Dominican Republic] President Fernandez.” Pichardo is the other co-chairman of the league.

In response to the global oil crisis, Dominican President Leonel Fernandez is proposing a Global Petroleum Solidarity Fund be created to assist countries with annual per capita income less than $6,000. Under the proposal, oil-producing nations would allocate 3 percent of their record earnings to the fund.

“Our goal is to let the speculators on Wall Street know, we will not be invisible. We are being impacted by oil prices not only in this country, but in the Dominican Republic,” Councilman Reynaldo Martinez of Haledon, N.J., told the World.

Elected officials from Massachusetts, Rhode Island, Pennsylvania, New York, New Jersey and Maryland participated in the protest and press conference. The American Northeast is home to the majority of Dominican Americans.

The crowd chanted, “Lower the prices!” as they picketed. Some held signs reading, “Talk is cheap. Gas isn’t,” and “Wall Street gets drunk and effects everyone” in English and Spanish. Some held Dominican flags, but one protester assured a curious passerby, “This is for everyone. Gas prices are killing everyone.”

Pichardo said in a written statement, “Without a legal framework to halt market speculation, U.S. Hispanics, as well as all the most disadvantaged groups and countries around the world will end up paying for the profits of speculators who don’t see beyond their own greed.”

Reprinted from the People's Weekly World.

City Subways Fail to Make the Grade

Straphangers Campaign of the New York Public interest Research Group (NYPIRG) has released their annual "State of the Subways" report today.

As any regular rider of public transport in the city can tell you, Metropolitan Transit Authority (MTA) has failed to make the grade.

Combining data on the subway services as well as surveys of commuters, the report shows that the services are deteriorating as are rider's opinions of it. The report found that "car breakdowns worsened from a mechanical failure every 156,624 miles in 2006 to one every 149,646 miles in 2007." There was little improvement in clarity of subway car announcements, available seats and subway car cleanliness. Plus, service from line-to-line varies widely. Overall, commuters rate the rider unworthy of the current $2.00 fare.

Ridership is at an all-time high in the city due to gas prices and clogged freeways. Yet the subways and bus systems have not improved accordingly. Quite the contrary. In June the MTA announced that it was postponing repairs on a number of lines due to projected deficit.

This is the backdrop too the recent proposal from the MTA to increase subway fares yet again. If implemented next year's fare hike will be only the second ever back-to-back increase in the history of the system. The MTA's contract with TWU Local 100 expires early next year as well, and there will no doubt be attempt to pit low fares against transit worker's demands.

The state of the subways is clearly in decline. The main problem is that straphangers are being asked to fit the bill while the big corporations and employers in the city (who could never do business here without the subway system!) don't pay their fair share.

Plus, debt relief to pay off the loans the MTA accrued in the 1970s now adds up to nearly 20% of the budget...and growing. That's 40¢ of every farecard swipe!. The debt should be wiped clean. The banks have been more than paid back. That coupled with a targeted tax of city's biggest corporate employers can avoid a fare hike and even ensure growth of the public transport system.

We need the subways now more than ever. The public transportation system is the only way to make a city like our livable, sustainable and affordable. Riders don't mind paying their fair share, but only if corporate America pays theirs too.