Ways That The State Can Save Money Without Hurting the City (10.25.08)
by anthony.stasi
 On Politics
Jan 01, 2009 | 37085 views | 0 0 comments | 1389 1389 recommendations | email to a friend | print | permalink
This is a time of great economic uneasiness, which, if history serves us right, will be followed by a period of abundance. What we look for in government policy circles is the best way to cushion the downward spiral and the most responsible way to handle a bubble economy. We call it politics, but it’s really history.

How do we best prepare for a better economy? A few months ago I spoke with Chris Saxman of the Virginia House of Delegates. Chris explained how in Virginia they introduced a transparency bill to allow people to see where their tax money is being spent online. But that was pre-Wall Street meltdown. Now, that idea is even more necessary. Joe Addabbo, running for the State Senate in New York, sees this as a must for the state government. “On a city level – the Independent Budget Office (IBO) – a watchdog group – produces a quarterly report. It’s a good entity. There is no IBO for the state. No independent oversight for the state. I propose an IBO for the state. Because there is no watchdog group in Albany, you have a late budget year after year,” says Addabbo.

A transparency bill would not only do well for ferreting out corruption or innocent budgeting mistakes, but it could allow people to track how discretionary money is spent. Discretionary money is a part of being an effective public servant. But if a legislator is spending money outside of his district, it should be easier to follow. Attorney General Cuomo has already taken a step in this direction with Project Sunlight, an online way of tracking discretionary and campaign money.

This is a time of great anxiety. But if you are a maverick investor or a public policy wonk, it’s a time of great opportunity. There is no other time where it will easier to get budget conscious legislation passed. Addabbo is calling for a one year moratorium on foreclosures for people that are in financial trouble. Senator Clinton was calling for a three month moratorium, but Addabbo explains that the foreclosure process takes a long time, and a three month moratorium doesn’t allow for the lender and the borrower to work things out – if it is possible. Without the fear of a foreclosure, the borrower can continue to make payments in good faith – while trying to get back on his feet. After a year, if things are still the same, foreclosure proceedings could or would happen.

New York State needs to start cutting waste as a means to deal with this difficult time. The state, according to Addabbo, had a 5% increase in its budget this year. In fairness, Governor Paterson and both houses worked to rectify these issues in order to deal with the financial crisis. “There is waste to cut, and the city has not gotten its fair share from the state,” Addabbo explains.

If you follow the money – or lack of money – you see how there is a way to alleviate some of the stress that taxpayers are facing. The city sent $11 billion to Albany last year. It has not gotten $11 billion back. So the city, in order to deal with shortfalls, looks for other ways to enhance revenue (taxes?). Add to that that city agencies are often doing the work of the federal government. “The city spends around $100 million in police and other agency work, training people to guard embassies and other activities. That is not supposed to be the work of the NYPD,” says Addabbo.

So, there are ways to save money. Press the federal government to pick up some of the tab for the tough work that our emergency services units are doing. Re-introduce the Commuter Tax, which taxes people that come to New York City to work when they are not residents. (Addabbo has a bill that would make city employees exempt if they were residents when hired). The Commuter Tax would yield an estimated $400 million a year to the city. Even if the federal government only picks up ¼ of the costs that the city absorbs, that is revenue of $425 million a year – every year. (Joe Addabbo says that the Commuter Tax would yield $500 million to the city. But I still feel comfortable with the more predictable estimate of $400 million. Either way, it is much needed.)

Speaker Sheldon Silver has said that he will consider bringing back the Commuter Tax. This is the time to move on this item. These are the times we live in, they call for smarter policy. This is not big government – its cleaner government. It doesn’t suggest wrongdoing on the part of career politicians, but when begin to think about cutting budgets, we need to see where every dollar goes. We also need to bring back revenue producing vehicles that can help keep property taxes and fares down.

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