Musings on a Sales Tax Hike: Brooks Hatred for Taxes

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It was interesting to watch County Executive Maggie Brooks try and maintain her image as a conservative on taxes while calling for this increase. At one point during the question and answer session – she said something even more amusing – that she hated taxes… hated them. As if she hated all taxes.

Going over the top is a tried and true method of getting the basic point home (which was that she hates increasing taxes). And maybe her line was a subtle misstatement. But it makes you laugh just the same – this notion of "hating taxes."

Government doesn’t exist but for the raising of taxes. Of course, taxation is a relative way for the collective being served to pay for services that they benefit from. Hating all taxes would mean hating the funds that pay for garbage collection, sewer pipe repairs, the cop on the beat or the program that pays for Aunt Jenny to get long term nursing care.

That’s not to say that government shouldn’t grapple with how much it’s collecting and how much it’s spending. And, frankly, in New York State… that argument about the basic work of government and how much it should collect to pay for it has long stalled out. That gets me to my next thought…

Musings on a Sales Tax Hike: The Intercept Prod

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The sales tax intercept that we’ve been writing about in this space has been tabbed by County Executive Maggie Brooks. She called it a gift from Albany, the way that state government has given county governments a solution to the Medicaid cost crunch.

The other way to view this is that the intercept may be the way to get state government to finally look at the Medicaid cost.

State lawmakers have found it easy to expand Medicaid because a) it means getting more federal aid from the match that the feds pay in Medicaid and b) because the local counties share the cost. No direct pain, no need to change. Maybe the state will finally look at cost cutting for Medicaid if they take more of it on.

Wouldn’t that be a novel approach by government – cost cutting.

More From Tom Suozzi

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If you caught WXXI’s Need to Know program on April 14 at 9 p.m. you saw part of our interview with Tom Suozzi, the outsider running for the Democratic nomination, and current Nassau County Executive.

If you want to hear more from Suozzi click right here for a continuation of our conversation with the man who wants to challenge Eliot Spitzer for the Democratic nomination.

During the talk, Suozzi shoves Medicaid fraud in his rival’s face. "Eliot Spitzer has not made a priority of going after Medicaid fraud," he said in WXXI’s studios.

Suozzi again pushed his plan for finding $5 billion in savings from the state budget. Part of that plan goes right at unions in the state – cutting the workforce by 10 percent. You can see the results of one Suozzi squabble with a union here. You should also click here to see how Suozzi blames the clash with the Nassau PBA partly on Spitzer.

Suozzi also says state spending is a problem but won’t freeze it. And listen for when he talks about
alienating top leaders in Albany.

Accepting the Gift

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The Maggie Brooks budget solution has just a hint of Joel Giambra and Erie County, doesn’t it?

That sales tax hike comes as a last resort, said Brooks during her Thursday announcement. It’s the only way to cover up the $102 million county budget gap, she said.

So you must recall that in late 2004, Erie County Executive Joel Giambra proposed a penny hike in the sales tax as a way to close up Erie County’s budget hole. (This space in its former home called it "The Ghost of Erie County"). That initial sales tax increase was rejected. But in January 2006, Erie County leaders and the state finally bought into a 3/4 quarters of a penny hike. That’s what Brooks proposes to add on to Monroe County’s sales tax.

Of course, timing is everything.

When Giambra made his call, he came armed with a doomsday budget scenario – give me a sales tax hike or you get massive cuts. They call it the red-green budget debate. This sparked quite a backlash.

And he didn’t have "the gift."

That’s what Brooks called the Albany-created swap known as the sales tax intercept. The program where counties can give away some of their sales tax money in exchange for giving away the requirement to pay into Medicaid. She hardly sounded like a kid at Christmas when this idea for accepting the trade was first announced n March, remember?. But, coupled with the sales tax hike that will make the city, the towns, villages and school districts whole, the intercept is a box wrapped with a bow.

No such present for Giambra back then. Just loads of criticism.

Much of that criticism centered around the fact that when Giambra first came into office, the Erie County Executive slashed property taxes by some 30 percent.

But here’s an interesting thing. Monroe County also cut property taxes in the mid to late 1990s and into the early years of 2000. At least if you take it from the view that County Executive Brooks now holds.

Brooks’ predecessor often said he froze the property tax. But Jack Doyle meant the total amount of property taxes collected. Brooks has changed that definition. She, too, says she holds the line on taxes. But she means the property tax rate. This may sound esoteric. But it’s important.

Using the Brooks method of viewing the property tax, Doyle actually cut taxes by roughly 8 percent from the time he took over to the time he left. Now that reduction isn’t the same size as Giambra’s. But it’s interesting how a definition of how to measure property tax growth can, well, alleviate criticism.

I mean, imagine if Democrats started going after Brooks and Doyle for cutting property taxes and digging some of that fiscal hole themselves.

And it is interesting to note the Democratic proposal to combat the shortfall. The centerpiece is charging back use of the sheriff’s road patrol to towns that use it. Some municipalities have their own police department and so don’t use the sheriff patrols. But they pay for the service.

But that’s a painful approach. Town budgets would surely suffer. Just as the sales tax intercept proposal alone would have been painful to municipalities who share in the tax proceeds.

Hiking that sales tax, however, appears to be a pain reliever. At least for Brooks and her predicament.

Giambra laid out the pain relieving formula of sales tax hikes back in 2004 when he gave his budget choices… the tax hike or the doomsday budget. 

Perhaps when it comes to these situations, it’s all in the timing and the presentation, I suppose.

But something tells me we’re still in for the same kind of battle Erie County residents saw a few years ago.

Government Addiction to Shopping

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As Monroe County lawmakers ponder the trade of sales tax money for Medicaid relief, a new report came out that spelled out local governments relationship to the tax.

Simply put: It’s a growing addiction.

State Comptroller Alan Hevesi’s office issued a report on sales taxes in New York State that’s worth reading.

In brief the Hevesi report stated that:

***New York State has one of the highest combined state/local sales tax rates in the U.S.

***On the whole, counties are more reliant on sales taxes … even exceeding the amount collected from property taxes. In 1994, county sales taxes represented 20 percent of revenue while property taxes were 26 percent of revenue. In 2004 county sales tax revenue was up to 26 percent while the property tax was at 25 percent.

***In 2004 Monroe County, however, got $118 million from sales taxes but far more, 268 million, from the property tax. Meanwhile, the city of Rochester took in about $20 million more from the sales tax than its property tax.

***As Internet sales of goods grows in popularity, so will the amount of uncollected sales taxes. And that will mean a growing loss from this revenue source.

***The Finger Lakes Region is tied for the slowest rate of growth in sales taxes over the last six years.

***Forty three of the 57 counties in the state (outside of New York City) share the sales tax proceeds. But they share at different levels. The county that shares the most? Monroe County… which keeps only 31 percent of the total take.

Is it any wonder that Monroe County lawmakers want to get more from the sales tax… which is why they are breathing so heavily for that Medicaid Sales Tax Intercept. The plan, of course, was tabled at the Ways and Means Committee meeting a few weeks back – which was just what the Republican President of the county legislature, Wayne Zyra, said he desired.

So while we wait for that shoe to drop, remember that Monroe County believes it has good reason to feel as though it has done plenty for others with the sales tax money. And now maybe it wants a little more help from the tax for itself.

All Votes Are Local

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This may not sound like a locally-based column. But stick with it… it is.

All politics is local. It’s a phrase attributed to former speaker Tip O’Neill. Heck, he wrote a book with it as the title. This year, the phrase has been embraced by Republicans running for reelection in the House. But it’s always been followed by the incumbent class.

But, I wonder… at what cost do we all follow this belief? How harmful is following this idea?

For example, last week Rep. Tom Reynolds spoke with NPR on Tuesday about the GOP’s chances for winning post-Tom DeLay.

Reynolds talked confidently (he always does) about his party’s ability to keep control of the House (Check it out here). As you might know, Reynolds heads up the House Republican Campaign Committee. And what did he tell the NPR interviewer? He gave him the growing theme for a GOP that wants to shed the DeLay scandal (not to mention President Bush’s tumbling popularity) – that all Congressional elections are local.

These elections, Reynolds said, aren’t based on national issues, national news stories… such as those about a congressman who is stepping down because of his ties to a disgraced lobbyist. No, no. All politics is local. Reynolds spoke about the leading issue in his own district – jobs. He didn’t talk about his challenger, Democrat Jack Davis, who is slamming Reynolds and the Republicans in Congress for promoting trade initiatives that he says harm local workers.

His premise boils down to this – you vote the guy, the gal… not the party. You vote for the person who roams the district with his or her hand outstretched asking for your vote, eating the chicken at the local fair.

"It’s all about what each district has going for itself," Reynolds said. "Some, like mine, are talking about jobs… others may be talking about border security. Whatever it is… we believes its between both the incumbents and the candidates and their districts making it all politics is local."

So what’s the problem with this? Plenty, if that’s really the way we all approach elections to legislative bodies.

Reynolds may come from Western New York. And he may even be a likable fellow who relates well to Western New Yorkers in his 26th Congressional District.

But that approach disregards something. Reynolds runs as a Republican. As a member of the House, he is part of the Republican caucus. And – for better or for worse – he plays along with the team he chose. This is how a party in power – well…. uses its power.

So are you really just voting for Reynolds because he’s a great guy, who understands the concerns of his district? Doesn’t the team he plays for have any place in the vote you cast.

Are you really just voting for, say, Assembly Member Susan John, because she’s got the pulse of her Monroe County district? Is this all that’s behind your vote? Take a look at this article . John defends and supports labor in the argument for workers compensation reform. Nothing wrong with that on the surface. She clearly values the labor movement. She ought to, as head of the Labor Committee in the Assembly. It’s a position she attained because of the power structure in the Assembly, who appointed her to the post.

But, how does that make John local?

And we all know how legislative members like to go back to the district during election years and tell the voters  – "don’t forget, I know how to bring back important things for you." You know… goodies like money for local projects. They call them member items in the state capitol. A less flattering name is pork (just ask the Center for Governmental Research).

It sounds great on the local level…. just check out all the projects on this vast list that went to the Rochester area (thanks to the Empire Center for New York State Policy). What better way to show that a representative is really look out for his/her constituents than by showing the voters in his/her area the pork brought home. Why Sen. Jim Alesi has a music series at Eastman named after him. Why would he put his name there? All politics is local, right?

I’m not arguing that this premise is false. It’s a time-tested way to win reelection for incumbents.

I’m just saying that to forget that Reynolds is a member of the ruling Republican Party in the House… or that John is part of the Democrats in control of the Assembly… or that Alesi sits with the GOP majority in the State Senate… is to forget something vitally important. They help sustain that ruling majority. They are a part of it. And so… shouldn’t the decisions made by that ruling party reflect on the team members in their district come Election Day?

Maybe we could change that Tip O’Neill saying… turn it into this: All votes are local. And all voters have a choice about how they base their decision.

Are We Talking about the Same NY Budget Here?

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Well, a deadline is met again and New York State budget preparers jump up to take credit like a "D" student who has finally learned he needs to do his homework on time.

But has the "D" student turned in something that will make the grade? How is this state budget that sets (another) new record for spending being judged? Well, if you were simply to listen and read the comments and quotes about it… you might get a headache. Or you might think there is a strong bout of collective bi-polar disorder out there:

—"It’s an accountable, responsible, responsive budget." said State Sen. Majority Leader Joe Bruno to Karen DeWitt on 3/30/06.

—"The budget approved by the Legislature will be politically popular, but it is fiscally irresponsible." Press release from Tom Suozzi’s campaign. Suozzi is a Democrat running for governor on 3/29/06

As you know by now, this budget has something for everyone. Tax rebate checks for voters (just in time for the fall elections), increases for every conceivable local government. In Rochester, Bob Duffy and Manuel Rivera (the mayor and the city schools superintendent respectively) are beside themselves with excitement over the increase they landed in the budget. And so are others:

—"$11.2 Billion Albany Win for Mike on Ed Spending" – New York Daily News headline on NYC Mayor Mike Bloomberg’s reaction to landing more cash for school aid.

—"Last night at around 9:30 I was literally jumping up and down on my couch in my (Albany) office." – State Sen. Nicholas Spano, R-Yonkers, in a quote to the Journal News on 3/30/06. This was in reaction to more state aid for the city of Yonkers.

Well… some others:

—"In the New York of the real world, we can not afford a government that operates like this." – The New York State Business Council, a letter to Assembly Speaker Sheldon Silver and a press release on 3/29/06.

—"Today the Legislature is passing a tax, spend and borrow plan that will lead to very large out year deficits. Their budget not only dramatically increases spending, but provides no reform of the two areas with the largest spending growth – Medicaid and education." – John Faso, Republican running for governor in a press statement on 3/31/06.

But surely everything is okay for the governor… and those who want to replace George Pataki next year:

—"We are assuming the governor will see the wisdom of our budget."- Assembly Speaker Sheldon Silver to the Jay Gallagher and Cara Matthews of GNS on 3/29/06, talking about Pataki’s willingness to accept this budget plan.

—"The whole thing is like a big, exploding cigar for the next governor. ‘Here’s a Cuban’ … Boom!" – E.J. McMahon, director of the Manhattan Institute’s Empire Center for New York State Policy, in an Associated Press report on 3/29/06.

—"Like everyone else, I am wary about the way spending is being increased at some levels." – said Eliot Spitzer, the Democratic candidate for governor in the same article.

But what did you expect… this was a budget with a surplus. And what else do you do with a surplus. You give it back, right?:

—"One of the things that is very important to me is that the state give back to hardworking taxpayers their money." – state Sen. Thomas W. Libous, R-Binghamton to Binghamton Press and Sun Bulletin on 3/30/06, on the end of year budget surplus.

—"Legislative leaders are passing up a chance to reduce New York state’s excessive debt burden — already one of the highest in the nation — and to achieve structural balance between revenues and spending." Citizens Budget Commission statement on 3/29/06.

—"Even when the state is flush with money, the poor don’t get a cut of the pie." – Mark Dunlea, Associate Director of Hunger Action, a press release on 3/29/06

—"Nobody seems willing or able to stop the politicians in Albany from spending themselves into serious fiscal trouble, not so much for the budget year ahead but for many years after."- Newsday Editorial on 3/26/06

So what do we say about the "D" student who gets his homework in on time? Most of us don’t pat him on the head for simply meeting a deadline. We say "about time." But in this state, we are not yet grappling with what the student has wrought with the latest budget assignment. It’s spending more than before. It’s giving away plenty. But somehow we know that it still has begun to scratch the surface when it comes to Albany’s fiscal situation. And so the reaction sounds slightly inconsistent from report to report. Sometimes within the same report – by the same source.

—"If we didn’t get the state aid increase at that level, I never would have been able to deliver a budget with a 0-percent tax increase." Shawn Hogan, mayor of Steuben County city of Hornell, to the Hornell Evening Tribune on 3/30/06.

—"I think we spend too much money in New York state. I think we need to rein in that spending." – The same Mayor Hogan in the same article.

I don’t blame Hogan. I think we’re all a bit in a bind at what’s being offered by Albany.

At least it’s on time… I guess.

Everybody Wins (So Who is Losing?)

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Rochester vs. Buffalo?

How about Rochester and Buffalo. And Syracuse for that matter.

On the same day that this area’s press reported an increase in state aid for Rochester and called it a team victory led by Mayor Bob Duffy the Buffalo News had a different story. The cities of Rochester and Buffalo, the Buffalo paper reported, had the same lobbying firm working on their behalf in Albany.

So it appears the hard-working, miles-driving Duffy had some help. Now, no one would begrudge him professional lobbying for such an endeavor. He’d be crazy not to do it. It’s part of doing business in Albany.

And the spokespersons for both Duffy and Buffalo Mayor Byron Brown told the News that they were fine with the two cities using the same firm. Of course they were.

Because the win on Friday wasn’t just a win for Rochester (and please remember that the brokered deal in a Senate-Assembly conference committee still needs to be approved as part of a final budget). Everybody got a nice piece of the action.

Just compare what the two cities were going to get under Gov. George Pataki’s proposed budget and what the tentative deal for more state aid to cities gives them.

—Rochester’s recommended funding from Pataki’s budget – $59.6 million. The latest legislative proposal gives the city $71.6 million

—Buffalo’s recommended amount in the governor’s budget – $128.6 million. Friday’s legislative deal gives that city $142.3 million.

Now let’s add in Syracuse for good measure. They moved from $54.2 million under the Pataki budget proposal to $63.2 million under this latest deal brokered by the Senate-Assembly committee. (Here was the Syracuse paper’s story – a more subdued take. Yonkers made out similarly well.

Go figure that calls for more money would be heard by state legislators during an even-numbered (meaning election) year. Shocking. And the conga line for that state cash is starting to file in.

So are these state lawmakers and the governor making the hard choices – finding places to reduce for those they increase? Are you kidding. The governor’s proposed budget back in January was a 4.1% spending increase — and that’s without the additions being plopped in since then, like the increased aid to cities.

You might have thought that New York state was dealing with tough economic times. Or at least Upstate New York. You would have thought this would create a budgetary mindset that identifies the most important services for continued financing and then looks to reduce those deemed less worthy. In other words, creating a priority list. But the state doesn’t go for such things.

Will Bob Duffy? Go back to the story by Brian Sharp in the Democrat and Chronicle and you’ll find something worth clipping. Duffy says that things will change in the city budget. He seeks efficiency. He says cuts are coming. He asks for patience from the public. We should give it.

Because that’s when Duffy’s real work begins, or at least ought to begin. He should make the hard choices…  and that means some will have to lose out. Avoiding them means letting everyone win. And then who loses.

Some Chatter about the Sales Tax Intercept

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So you’ve read plenty here about the Medicaid remedy that could very well be a sales tax nightmare in Monroe County.

Take a listen as the head of the Town Supervisor’s Association in the county explains why the sales tax "intercept" would be tough on their budgets. But also listen as the president, Tracy Logel, talks about how it should get everyone to stampede toward Albany.

And listen for a question… can the sales tax "intercept" be separated from the sales tax sharing?

Use the comments section below for your answer, if you like. But first click over to the audio file and have a listen.