CWA 1180 - Political Action

TAX THE RICH
The battle is on to share the pain fairly in the next city budget
April 2002

LATEST UPDATE
The teachers have won a new contract, and state legislation giving the Mayor control of the schools has passed; one provision of the legislation was restoration of the education cuts in the city budget. Meanwhile, City Council and mayoral negotiators are narrowing their differences, with the fate of the recylcing program emerging as a major obstacle. The Working Families Party, along with Local 1180, other union and community groups, staged dozens of rallies and protests about the budget cuts in the last month, clearly with some effect.

Already reeling from recession and the World Trade Center disaster, New Yorkers are being asked to swallow a budget proposal that seeks to eliminate a huge deficit largely by cutting vital services to those who have been affected most. Mayor Bloomberg has proposed a total of $1.8 billion in cuts, and while the cuts are intelligently crafted and somewhat spread around, at the end of the day the brunt of the burden falls on the city's poorest residents, who have already been hammered by the economic downturn. Furthermore, Local 1180 members and other city workers know that their agencies are ill-equipped to take further cuts, after the slash-and-burn treatment so many of them received during the Giuliani reign.

With a $4.76 billion budget hole, no one in the city workforce expects to escape some belt-tightening, but there is a conspicuous piece missing from the mayor's budget proposal that has city workers concerned that the calls for "sacrifice" are aimed too much in one direction: the missing piece is a plan for revenue increases. Local 1180 is among a growing chorus of voices in the city that is insisting that to be fair, this year's budget plan must include some targeted tax increases that ask New Yorkers who can afford it to do their share and help offset the steep cuts that others cannot afford to take. So far, Mayor Bloomberg has been adamant in ruling out tax increases.

The City Council's own proposals on the budget call for some tax increases and restoration of some of the deepest and most painful cuts. Meanwhile, the Working Families Party, Local 1180, other municipal unions, an array of economic analysts and community groups are pushing a budget agenda that prioritizes education as well as other vital services and calls for revenue increases aimed at the wealthy. By law, the city must adopt a balanced budget by June 5. And so the battle is on—and 1180 members need to get involved—to make sure that the budget we end up with is as fair as possible.

GET INVOLVED!

Don't let other people set the priorities. Contact your city and state legislators today and tell them that you want a fair budget in which everyone contributes their share. Items like the restoration of the commuter tax require state approval, so it's important to contact your state representatives as well as your City Council member. If you don't know who your legislators are, click here to find out through NYPIRG's Community Mapping Assistance Project (CMAP).

Deep cuts, grim consequences

Mayor Bloomberg called his $41.4 billion budget proposal "a spread-your-pain, no-sacred-cow kind of solution." In addition to the $1.8 billion in cuts, the plan calls for $1.5 billion in new borrowing, $800 million in additional funds from the state and federal governments, and increases in cigarette taxes and parking fines. Bloomberg promised no layoffs through July 2003, and instead proposed trimming the city workforce by 6,000 people through attrition and an early retirement program.

There are some bright spots in the Mayor's proposal. The pledge to avoid layoffs is one. Civilianization of 800 positions at the Police Department is another; civilianization is an intelligent way to genuinely minimize the impact of budget cuts. And the mayor's tone, respectful and not bullying like his predecessor's, is a welcome change in decorum at City Hall.

Still, in the eyes of 1180 officials and many others, the mayor's proposal simply cuts too much, and in some of the wrong places. The Department of Housing Preservation and Development (HPD) took the single biggest hit, 26%. The Department of Youth and Community Development took a 19% hit; the Administration for Children's Services (ACS), 18%; the Department of Homeless Services (DHS), 17%; the Department of Aging, 16%. Libraries and cultural institutions are being cut by 15%.

The consequences of these numbers are pretty stark. The cuts at HPD include legal services for tenants, which provide vital representation to poor families facing eviction. Yet few things are more urgent than the effort to improve housing in New York City (see story on page 4 on the housing crisis). Carrie Anderson, an 1180 shop steward at HPD, summarized the problem: "Rents are outrageous." Working people are "juggling to keep your head above water," she said. The elimination of planned expansion of day-care slots is one of the consequences of the ACS cuts. Senior centers and emergency food for seniors are on the chopping block at the Department of Aging. In these cases and others like them, the proposed budget cuts not only fall on the most vulnerable members of our communities, they also ensure a future of higher costs. For every dollar spent on seniors' meals and nutrition, for instance, $3.25 is saved in medical costs.

Some agencies took smaller hits in the mayor's budget, but even there there is trouble. Both the Board of Education and the Police Department are slated to cut 7%. But whereas the NYPD was treated generously during the Giuliani years and the civilianization initiative will save money without reducing service, the Board of Ed was mercilessly squeezed during the same time and simply cannot absorb cuts without direct detrimental consequences for classroom education. Education in particular has emerged as the focal point of much of the debate on the budget. Critics of the mayor's proposal feel that any further cuts there are simply mortgaging our future and driving middle-class families out of New York City.

The impact of service cuts will be additionally amplified by the loss of personnel in city agencies, and on this front 1180 members are of course directly affected. "Most likely it's more work" for those who remain once attrition and the buyout have thinned the ranks, said Anderson. Furthermore, "the buyout package is going to be a significant hit because we'll lose the people with the most experience," commented Craig Brown, also from HPD. That sentiment was echoed by other 1180 members, including Board of Ed shop steward Mary Ellen Liona, who said, "if we get a buyout, the senior people, with experience, we're going to lose; there's going to be a gap."

Revenue problem requires a revenue solution

The mayor's proposal is only the beginning of the budget process, and as the consequences of that proposal are laid out it becomes clear that now more than ever Local 1180 members and others have to mobilize to make sure the actual budget that is adopted on June 5 is different.

Calls for revenue increases as an alternative to the proposed cuts have arisen from many quarters. The Working Families Party has been a key player, and on March 25, a group of 27 City Council members released a letter calling on City Council Speaker Gifford Miller to support taxes on the wealthy specifically to fund education. "If the mayor believes that these New Yorkers are unwilling to help their city after last year's devastation, he has underestimated their patriotism and civic-mindedness," the council members wrote. "Far more destructive to our city will be devastating cuts to our schools, our child care programs, and our mental health and youth services." Since the release of the letter, more council members have signed on.

Whether the well-off are sufficiently civic-minded or not, the truth is that they have fared better than the rest of the city, and are clearly better able to make sacrifices now. Between 1987 and 1997, only the wealthiest 5% of New Yorkers increased their share of income, and New York City now has the dubious distinction of having the greatest income inequality in America. Both municipal and federal tax cuts, moreover, have overwhelmingly redounded to the benefit of the upper income brackets. Calls for tax increases on these brackets are being driven by a sense of decency that demands that the rich also contribute to closing our budget gap.

Moreover, economic analysts point out that the bulk of the deficit the city is now facing is not the result of the World Trade Center disaster, but rather the product of Giuliani-era policies, in particular the loss of a staggering $2.6 billion in revenues from tax cuts, cuts that benefited the highest earners far more than others. The structural problem in the budget is a revenue one, experts argue, and thus the solution needs to be a revenue one. And revenue increases make economic sense as well in terms of recovery from the recession: public service cuts tend to reduce consumption, which is bad for the economy, whereas increased taxes on the wealthy tend to result in reduced savings by them, which has no adverse effect on the economy.

"If you say the 't' word," reflected Michael Becton, "people look at you like you're strange." But that is beginning to change, he noted. "The issue of taxes has been framed in such a way for a long time," said the Bellevue Hospital steward, "and I've noticed a slight unframing on this issue, here and there." Part of that "unframing" is reflected in public support for increased taxes. A recent poll showed that a majority of New Yorkers favored targeted tax increases in order to maintain public services, and particularly education.

Local 1180 members voiced their agreement with that position as well. "No new taxes sounds good overall," said Anderson, "but we are in an unbalanced society. You need to keep the moderate-income and lower-income people stabilized and tax some of those who can afford it. If we can do that, without service cuts, we can stabilize things. You need a way to improve this deficit, but to cut housing and education, you're affecting the poor. You have to look at revenues."

Bloomberg vowed "no sacred cows" in his budget message, but his dogmatic refusal thus far to consider tax hikes is exactly the kind of sacred cow that needs to be re-examined. Actually, his budget proposal does include a tax increase—a steep $1.42 per pack tax hike on cigarettes. "The cigarette tax is a tax on the poor," argued Becton, because everyone pays the same tax per pack, although some can afford it and some can't.

So it's not really that Mayor Bloomberg is opposed to tax increases, it's all a matter of which tax increases, or tax increases for whom. The City Council in its response to the mayor's budget called for a new income tax surcharge in order to pay for education; it would cost an average of $7 a year for people making less than $40,000, an average of $263 a year for people making $100,000 to $150,000, and $14,490 for people making a million dollars. The council also called for the restoration of the commuter tax. The council members who sent the March 25 letter had similar proposals: an increase in the personal income tax by 1% for income over $200,000, 2% for income over $250,000, restoration of the commuter tax, and reinstating 10% of the stock transfer tax.

In the end, budgets are about priorities, and they serve as a kind of blueprint of a society's values. The question is who gains and who loses. In the fiscal crisis in the 1970s, the answer was working people lost, they made all the sacrifices. In the post-9-11 world, Local 1180 and others are determined not to repeat that experience.

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