One New York: An Agenda for Shared ProsperityFriday, January 26, 2007
(Rochester & Genesee Valley Area Labor Federation)James V. Bertolone,
The above is the title for
the proposed economic agenda of the Fiscal
Policy Institute (FPI), a non-partisan research
and education organization that focuses on the
economic well-being of
In the area of “revenue sharing”, we already support the legislative push to fund local government through a transparent needs-based formula. This partnership between labor, business, government and community and religious leaders was established with the Fair Share Coalition that brought millions more to our community. Our effort needs to continue until Upstate gets its fair share of the state budget, and until the funding of local governments through a transparent needs-based formula becomes public policy in every one of our State’s budgets.
One cannot look at these initiatives without taking a hard look at our tax structure. There has been a significant loss of tax revenue in real dollars over a generation due to corporate loop holes and making the State income tax much less progressive than it once was. The Business Council of New York supports closing some of the corporate loop holes through
Over the last 30 years,
By reducing the progressiveness of the income tax,
In order to accommodate the loss of revenue from changes in the State’s personal and corporate income taxes, New York has substantially reduced State revenue-sharing with its counties, cities, towns and villages and reduced the share of school district budgets covered by State aid. These changes have, in turn, put greater pressure on local property and sales tax bases. And when taxpayer resentment over these tax shifts grew, the state responded with the STAR program. Despite its inequities, STAR has been welcomed by homeowners. But it provides no relief to tenants or landlords, small businesses and others who are affected by increasing property taxes. These fiscal disparities in the STAR program disadvantage city school districts with high percentages of renters and high concentrations of children living in poverty.
These fiscal policies – reducing the top tax rates on personal income while cutting state aid to localities and putting pressure on the property and sales tax bases – combine to have a particularly negative effect on upstate
FPI’s recommendations to create good jobs is contained in the section titled “Make Smart and Strategic Investments”. We need to stop all use of our tax money to create low road jobs and only subsidize business investment for high road economic development. As “Unshackle Upstate” documents, the loss of good manufacturing jobs, with family sustaining wages and benefits, has not only devastated our community for people who held those jobs, but the loss of those dollars in our economy has fueled other job losses causing our young people to leave in droves. Many of “Unschackle’s” recommendations in this are consistent with FPI such as long term strategies in the State’s key industries and where we have cutting edge technology, educational institutions, while investing in our transportation, energy infrastructure and worker’s skills. The main difference between FPI’s One New York and “Unshackle Upstate” is “Unshackle’s” initiative to “Decentralize decision-making and putting power in the hands of local authorities is the best hope for turning state government into a partner rather than obstacle to Upstate’s economic success”. This strategy is not the solution, but the problem. According to FPI the state and local governments (and its public authorities) spend $3 to $4 billion annually in the name of economic development. The Syracuse Post Standard documents a half-billion in tax dollars each year going to firms that simply re-incorporate or reorganize to claim their workers were “new” employees. Myself and others have publicly documented abuses of Industrial Development Agencies (IDA’s) like COMIDA, subsidizing poverty level jobs, tax breaks to corporations that have laid off instead of creating jobs, and giving one company or contractor a competitive advantage over others with our tax dollars based on their political contributions. The corruption involving public authorities is even worse, especially the situation at our own Water Authority. We need statewide criteria where long range proposals meet required benchmarks that include an objective assessment to the benefits provided to the State, taxpayers and job creation. It is hard for me to believe that any real business undertakes a major investment without a coherent, long range strategy. These must be evaluated based on real criteria and benefits to communities, not based on local politics.
New Month I will continue to summarize the recommendations from FPI’s One New York. Those interested may access the document in its entirety at http://www.fiscalpolicy.org/
Business Journal, January 26, 2008
Labor News, January 26, 2008