rjm's blog

Millions

The powerful New York State United Teachers (NYSUT) are spending a million bucks to run this ad.  Their strawman villian is a stereotypical greedy "fat cat" who is supposedly stealing the education of children, one of whom scolds "you need a time-out."

The "millionaires tax" the union is promoting applies to anyone earning $200,000 per year and up, including the partnerships, LLCs and corporations that report their business income on a personal tax form.  These are the entrepreneurs and small businesses that create jobs and keep young upstate New York families from moving away. 
 
With the attack on the "millionaires," the New York union hopes to deflect a Wisconsin-style clawback of their unsustainable pension and benefit packages.  Ironically, if they are successful, they will only be decreasing the demand for their services, as the entrepreneurs and younger upstate families who pay taxes and fill the schools leave for better economic climes.  Their position is lose-lose for New York.
 
Assemblywoman Barbara Lifton was echoing the teacher position in her town hall yesterday, insisting that people won't move away as taxes are increased.  I think she needs a time-out.

WI in NY

As of this writing, 73% of the respondents to a (non-scientific) poll on auburnpub.com answer YES to:

Auburn Enlarged City School District Superintendent J.D. Pabis has asked district employees to take a voluntary wage freeze for the 2011-12 school year. Should district employees agree to the wage freeze?

The wage freeze is one option to help close a potential $6.5 million budget gap in Auburn.  How would such a poll come out in Dryden?  Ithaca?

Cap Property Taxes NOW

Cap Property Taxes NOWState Senator Jim Seward has an online petition to try to urge the NYS Assembly to pass the governor's property tax cap proposal.  The bill has already passed the NY Senate.

Property tax increases have made it difficult for seniors to stay in their homes, tougher for young people to afford to purchase their first home and have squeezed the budgets of families and businesses across the state.

Placing a cap on school and local government property taxes would provide the relief that homeowners desperately need.

Check it out here.

Kirsten and Chuck Seek Boondoggle Train

Florida Governor Rick Scott has wisely passed up money to fund Obama's pipe dream, a train between Orlando and Tampa.  The unlikely route would have cost Florida a pile of cash on top of $2.4 billion which the president was trying to press on Gov. Scott.

Enter NY Senators Kirsten Gillibrand and Chuck Schumer who now want to step in and snag this prize for our state.  Fantastic, we can be stuck with the bill for a faster train between Batavia and Utica.
 
Oh, and maybe we can pay for a new railroad station in Niagara Falls, my old stomping grounds.  Not anywhere near the tourist attractions, of course, but where riders can be whisked across the Niagara River and on to Toronto.
 
Senators, if this is a good idea, let private railroads find investors to fund it.  Let's not borrow money from China and spend it on this turkey.

Hanna Votes Against Patriot Act Extension

The House of Representatives passed an extension to the controversial Patriot Act on Monday (2/14).  Congressman Richard Hanna voted with the minority in opposition to the extention.

Quoted at the Auburn Citizen, Hanna said, in part:
"Without reform, the law does not sufficiently protect our civil liberties, particularly regarding unreasonable searches and seizures. We would be untrue to ourselves, and to the spirit of this country, to sacrifice our freedoms because of our fears. We should never forget the reasons why America is exceptional.
"While it is our rightful duty to provide security for our free nation, we must be mindful of the Constitution. In its current form, the Patriot Act does not reflect the spirit of the Fourth Amendment. I urge Congress to hold hearings immediately and enact meaningful reforms to this well-intentioned but flawed law."
The Patriot Act deeply unsettles us.  Secret courts, roving wiretaps, broad authority for the government to seize "any tangible thing" without showing probable cause -- this isn't who we are.  We want security, but we don't want to sell our souls for it.

That Insurance Stuff

I was at some friends' house a few weeks ago and had asked, "just what does [State Senator James] Seward do in the Senate, anyway?"  I wasn't really sure what he was working on.   I knew he was on the New York Senate Committee on Insurance, but I didn't know what that meant.

I found a short article describing what he's up to there lately... a little esoteric, perhaps, but palatable in small doses.

The Tax Cap Is Just The Beginning

We can agonize over how cuts in state aid or the proposed cap on property tax increases will affect school districts differently.  Or we can look at the big picture: we're just spending too much on "education." Way too much.

We in New York State are spending 60% more than the national average, and we've found that increasing the amount we spend hasn't made any difference.
 
One reason this is true is that much of the increasing expenditures is going to pay for past pension promises. For years, instead of funding fair, defined contribution pensions out of their current funds, school boards promised school district employees that future taxpayers would pay for unrealistic defined benefit pensions and benefits.  
 
We've strained under the increasing weight of these promises until there just is no more money.  The state is broke, many local districts are broke and the only money the federal government has is money it borrows from China or pretends to borrow from itself.
 
The property tax cap is a warning signal.  The world has changed, and districts will have to do things differently.
 
* *
Current labor contracts don't allow much the districts much flexibilty.  The first step toward the future is to break the stranglehold of the unions and special interests.  The infamous 1982 Triborough Amemdment to the Taylor Law prohibits a public employer from altering any provision of an expired labor agreement until a new agreement is reached.  If there is a salary increase schedule in the current contract, teachers still get raises even though the labor agreement has expired.  There is no reason for the union to try to reach a new agreement or consider concessions or givebacks.  The Triborough Amendment must be repealed so taxpayers and public employees can negotiate labor contracts that are fair and sustainable.  
 
There is no other state or even any private sector collective bargaining situation with such a lopsided law.  It is no surprise that property taxes have soared since this amendment went into effect.
 
* *
Make no mistake, we will be spending less on education, one way or the other -- because there is not enough money to keep up the current levels.  Teachers will have defined contribution pensions, and there may be fewer teachers and administrators per pupil.
 
This does not make for a hopeless future.  We have seen successful homeschoolers, Catholic and religious schools, charter schools and for-profits (and public schools in other states) which do a credible, and sometimes better, job for much less than the $17,000 per student per year we are spending in New York.  We can do more for less, albeit in ways that might not look much like our present public schools.

Go Steelers

Yesterday (February 10), Richard Hanna (NY-24) introduced H.R. 609, the "American Competitiveness Act," which decreases the top corporate tax rate from 35 to 25 percent.

Currently, state and local governments tack additional taxes on business, leading to an average 40 percent rate, according to Hanna.  That rate is 56 percent higher than the wealthy-nation average—the average rate in the Organization for Economic Cooperation and Development countries is just over 25 percent.
That tax rate difference goes a long way toward explaining why American companies have a hard time competing with foreign firms.  During the Super Bowl, my daughter asked why one team was called the Steelers. I explained that, back in the day, we actually used to produce steel in Pittsburgh, that steel was so powerful it was part of the myth of America.  
Maybe trout steel. Steel made from trout. The clear snow-filled river acting as foundry and heat. Imagine Pittsburgh. A steel that comes from trout, used to make buildings, trains and tunnels. The Andrew Carnegie of Trout!
Over time, taxes, regulation, and powerful labor made steelmaking more economic in other countries.  Back to Hanna's release:
"More can always be done to simplify the tax code and end tax subsidies that pick winners and losers," Hanna said in a press release from his office. "At the federal level, I believe the American Competitiveness Act is a bold step toward making our country the best place in the world to do business. We need to allow our companies to do what America has always done best—compete." 

Lifton Chairs Assembly Steering Committee

[NYS Assembly Speaker Sheldon] Silver appointed Assemblywoman Barbara Lifton, D-Ithaca, to a leadership post, chair of the majority steering committee. The steering committee, which has about 25 Assembly members, studies complex policy issues for the Democratic conference and makes legislative recommendations. Lifton was vice chair last year.

h/t Syracuse.com

Tempest in a Chamber Pot

It was amusing that the very day that the Democratic Congressional Campaign Committee chose to complain about Richard Hanna (NY-24) "not creating any jobs" in his first 30 days in office, was the same day that Hanna announced that something like 70 jobs are coming to The Defense Finance and Accounting Service in Rome.

But it was far more telling that the DCCC would even think that that was the function of Congress at all.

Hanna's response to the Observer-Dispatch, when asked about the DCCC snipe:

At the end of the day, it will be private businesses that create the jobs, Hanna said. It’s the government’s role to improve the environment for the businesses to grow, and that will be accomplished through work by both political parties, he said.

Brian Ackerman at the O-D thought this was "interesting"; I think it's just right.

But back to those jobs... it doesn't look like any are being "created".  Jobs in Indianapolis and Columbus are being consolidated at Rome and operations "streamlined".  Nice for Rome, not so great for the other cities.  

If there is a silver lining in this foggy cloud, it is that the government will be spending less over all for a necessary service.  And that should be a goal of government: to make itself, and the burden it places on taxpayers, smaller.  That is the part of this move that benefits all of us.

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