Forget budget cuts; tax the rich

By Dan Margolis, for the NY State Communist Party

Reading the news, one could be forgiven for believing the false notion that there is too little money in the state of New York. The state budget - due on April 1 - still hasn't been passed, as Albany can't come to an agreement on how to plug the $5 billion deficit. Instead, the legislature has been passing a series of week-long budget extenders to keep the government running.

But while the effects of the crisis are real, the perceived lack of wealth is not.

A federal court struck down Gov. David Paterson's plan to furlough state workers and delay their pay raises, and now he is now calling for thousands of layoffs. Paterson openly questions whether or not an agreement made between labor and the state in 2009, which says that there would be no layoffs in return for big pension concessions from labor, is binding. Even if it can't be overridden, the governor is laying the groundwork for the layoffs to take place as soon as the agreement expires.

On top of that, many in the state Legislature are working to slash funding to education, aid to cities and towns, health care and other areas. In New York City, Mayor Michael Bloomberg has taken advantage of the situation and is pushing to reduce the city's workforce by nearly 4 percent. After widespread protest, the mayor was forced to retreat on his plan to axe several thousand teachers, but he is now threatening their planned pay raises.

All across the city and state, the effects of the budget crisis are being felt. Even the New York Public Library has been forced to send out appeals to its supporters urging them to get in touch with their local representative to halt the mayor's proposal for the biggest funding cut to the library system in the city's history. The transit system is planning to lay off hundreds of station agents (there would have been more had a judge not intervened) and to shut down train lines and bus routes.

On the surface, the deficits seem huge. The state is short $9.2 billion, and the corresponding figure for the city is $4.9 billion. In addition, the MTA, a public authority, faces an $800 million shortfall.

What to do?

Of course, there are a number of ways to reduce wasteful spending without cutting services important to working people, and a number of watchdog groups and unions have pointed them out.

But the money is there. Instead of making draconian cuts, the state should simply raise revenue.

Let's put the deficit into perspective: If you add up the city and state deficit, and throw in the MTA to boot, you come up with a total of $14.9 billion. Our mayor, who is presiding over the gutting of people's living standards, is a billionaire. So much of a billionaire, in fact, that he could pay off all of the city and state debts and still have more than $2 billion left over. To put that number into perspective, Bloomberg would then, if he lives to be 108 years old, still have, not accounting for interest, $50 million per year to live off of.

And there are more like Bloomberg: According to a 2008 issue of Forbes, there are 70 other billionaires in the city limits, and they have an average net value of $3.3 billion. These 70 New Yorkers - out of nearly 8.5 million and not including the mayor - control $231 billion alone.

On top of all that, this is the home of Wall Street and its huge firms like Goldman Sachs and others, and countless multi-millionaires.

Compared to all this wealth, the $15 billion the state needs to sustain services to working people seems like a trifle.

Aside from the pressure that monopoly capital can put on the city and state governments, there is simply no reason for New York to face layoffs or cuts to social services. Perhaps more than any other state in the country, we can, if the political will is there, balance the budget - or go further and enact our own statewide stimulus plan.

A small surcharge on the billionaires, a stock transfer tax (specifically tailored to exempt 401k and other pension savings), ensuring that the Fair Share tax law doesn't sunset: all of these things could solve our budget problem.

A planned demonstration by AFSCME District Council 37, which represents 125,000 city public workers, as well as a number of other rallies and campaigns to get people to contact their representatives, are all steps in the right direction.

What's needed is the reemergence of the coalition that enacted the Fair Share Tax Reform a couple of years ago, a broad alliance of all New York City labor, the Working Families Party, the African American, Latino, Asian American communities, religious groups and others.

Thousands demonstrate against NY State for fair budget, taxes

By Dan Margolis

NEW YORK—Tens of thousands of people—unionists, community members, religious leaders and elected officials—came out here, March 5, at City Hall and in cities across the state to demand a fair budget for working people, and that the rich pay their fair share in taxes.

New York City Comptroller Bill Thompson told the nearly 75,000 people gathered, “We must ensure that City Hall and Albany put forth proposals that take into account the needs of all New Yorkers. We cannot balance the budget on the backs of working people.”

New York State has a budget deficit of around $14 billion, and the City has a $4-5 billion hole to fill. While the state is poised to receive more than $24 billion in stimulus funds, the governor has argued that New York has a “spending problem” and that the funds will not cover future deficits. He has proposed regressive sales taxes and $2.5 billion in education and $3.5 billion in healthcare cuts, gradually ending aid to all cultural institutions, and huge cuts to libraries, among other things.

NYC Mayor Michael Bloomberg, for his part, has echoed the governor’s rhetoric, and proposed similar cuts at the city level. While Paterson has been pushed to retreat—due in large part to public outrage and actions such as the Rally for New York—Bloomberg won’t budge. He has proposed $127 million in cuts to the city’s medical institutions and nearly $1 billion in cuts to city schools. Bloomberg has also demanded another tier be added to the contracts of public workers.

United Federation of Teachers President Randi Weingarten told the crowd in NYC, “As President Obama has said over and over, we cannot simply cut our way out of this economic crisis because that would be a recipe for disaster. That is why we pushed so hard for passage of the stimulus package.”

Weingarten is also president of the American Federation of Teachers, the national parent union of UFT.

In a show of solidarity, the rally demanded no cuts to anything: the Untied Federation of Teachers demanded no cuts to healthcare, while 1199 SEIU, which represents healthcare workers demanded no cuts to education, for example. Instead, everyone demanded Fair Share Tax Reform, in which the wealthiest New Yorkers would pay slightly more in taxes.

Currently, New York’s highest marginal tax rate is 6.85 percent, whether you make $40,000 or $40,000,000. The plan would add a few new brackets, and would raise $6 billion. However, Bloomberg, and others of his ilk, argue that the rich would not pay, and would simply move out—though New Jersey and California have similar tax brackets, and, as 1199 SEIU President George Gresham said, “there are a lot of rich people there.”

Gresham noted that “study after study” have shown that the rich do not move when their income tax is raised. Further, “this is New York,” he told the cheering crowd. “Where are they going to move? To Iowa?”

According to Thompson, “all New Yorkers must play a part in bringing New York back.”

A huge cross-section of the city’s unions were represented, including the teachers, SEIU Local 32 BJ, AFSCME, most AFL-CIO unions. Many community and civic groups, like Citizen Action, Make the Road New York, ACORN, the city's immigration coalition, tenants' organizations, and others, were also out in force.