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January 15, 2014


The Syracuse stadium fantasy

E.J. McMahon

Public subsidies of sports arenas, stadiums and ballparks “cannot be justified on the grounds of local economic development, income growth or job creation, those arguments most frequently used by subsidy advocates.” That’s the solid consensus view of economists, based on decades of evidence from scores of projects, as summarized in this 2008 paper. For a more recent take on the issue, see this April 2013 report presented to officials in Milwaukee, Wi., where the usual suspects are pushing for a new downtown arena.

All economic analyses aside, taxpayer-funded subsidies for sports facilities are just plain unfair, chiefly benefiting wealthy owners, sponsors and boosters of the teams that play in them, while diverting scarce resources from more basic public services and infrastructure needs.

But many politicians across the country remain suckers for the “if we build it, they will come” premise behind proposed sports developments, especially in struggling cities. Until yesterday, at least, New York State’s latest local sports facility subsidy scam had been taking shape in Syracuse, where Onondaga County Executive Joanie Mahoney reportedly had Governor Cuomo’s pledge of state support for a partially county-funded $500 million arena that would serve mainly as a new showcase for the Orange of Syracuse University.

(more…)

November 27, 2013


Cuomo flipping the “circuit breaker”

E.J. McMahon

Source: Wikipedia

Over the past few days, Governor Cuomo has made it clearer than ever that his “tax cut” focus next year will be on something that can be more accurately described as a tax shift: the creation of a new property tax “circuit breaker” credit that homeowners could claim on their state income taxes. The credit would rebate a portion of local property taxes, to the extent that they exceed some set percentage of each homeowner’s income.  (For an example, see this Assembly bill.)

Cuomo also made it clear that he doesn’t want to touch the state’s largest revenue source–the personal income tax, or PIT– because, he said on the Capitol Pressroom radio show, “we just did the PIT last year … in the budget.” In fact, what Cuomo and the Legislature “just did” with the income tax in the 2013-14 state budget was to temporarily extend, for three more years, a 29 percent tax hike on individuals earning more than $1 million and couples earning more than $2 million, which was previously due to expire at the end of 2014.

(more…)

November 20, 2013


Open Book enhanced

Tim Hoefer

In 2008, around the time the Empire Center launched its transparency website SeeThroughNY, state Comptroller Thomas DiNapoli was moving on the same track with the creation of OpenBookNewYork. [Then-Attorney General Andrew Cuomo would soon do something similar with Project Sunlight, now OpenGovernmentNY.]

The strongest feature of the original OpenBook was a list of state contracts. In a major enhancement of his site, DiNapoli just posted what amounts to the state’s checkbook register, showing payments made with our tax dollars.

(more…)

November 14, 2013


First take on tax reform commission report

E.J. McMahon

The report of Governor Cuomo’s Tax Reform and Fairness Commission is a useful, well researched collection of interesting and provocative ideas — some much better than others. Not a bad place to start a further exchange of ideas leading to a fruitful debate on the topic, assuming such a thing is possible in Albany. (One can always dream.)

For example, the report is very good on the subject of how to “modernize” (i.e., broaden) the sales tax base. But takes a wrong turn in recommending what ought to be done with the money raised by these changes.

(more…)

November 8, 2013


Cuomo finally issues mid-year financial update

E.J. McMahon

Eight days past the statutory deadline, Governor Cuomo’s Division of the Budget (DOB) has finally released a required mid-year update to the state financial plan.

The report is not only late for a third consecutive year; at first glance, in what’s becoming a Cuomo administration tradition, it features minimal new information. For example, the 2014-15 budget gap is still projected at $1.7 billion, even though data from state Comptroller DiNapoli’s office suggest it will be much smaller. More analysis to follow in this space.

Meanwhile, and probably not by coincidence, DiNapoli was the only player in the state budget development process who met Wednesday’s deadline for issuing revenue estimates in advance of next Friday’s statutory deadline for a Quick Start consensus forecast. The Senate Finance and Assembly Ways & Means Committee staffs, on both the majority and minority sides, are overdue in preparing their revenue estimates, presumably awaiting the Mid-Year report and DOB’s 2013 Economic, Spending and Revenue Methodologies report, also released today .

(more…)

November 4, 2013


Cuomo late again with key financial disclosure

E.J. McMahon

For a third consecutive year, Governor Andrew Cuomo is late in issuing a mid-year update to New York State’s financial plan.

The governor is thus once again in violation of Section 23 of the State Finance Law, which requires him to update the financial plan “within 30 days of the close of a quarter to which it pertains.” That would have been last Wednesday.

(more…)

October 10, 2013


The phony war on pension spiking

E.J. McMahon

Shocked by spiking?

Working added overtime to increase retirement benefits—i.e., pension padding or “spiking”—is an old tradition in the public sector, especially among police officers, firefighters and other employees working under contracts that provide them with ample overtime opportunities. This practice has been a major factor in the recent growth of six-figure pensions.

Here’s the thing: it’s perfectly legal. If you belonged to a retirement system that counted overtime and other forms of extra pay in your pensionable “final average salary” base, you’d have to be either lazy or crazy not to spike your pension as much as possible in the years before you retired (which could be after as few as 20 years). It’s no use blaming employees for doing something the system encourages them to do.

When he was running for governor in 2010, then-Attorney General Andrew Cuomo issued a preliminary report citing widespread pension padding. But he uncovered no evidence of widespread illegal activity or systematic administrative oversights by the state’s public pension funds.

Now Cuomo’s commissioner financial services, Ben Lawsky, reportedly is jumping  on the same issue, saying he will focus on pension spiking in his forthcoming audits of city and state pension funds. (more…)

July 29, 2013


Cuomo continues institutional downsizing

E.J. McMahon

Governor Andrew Cuomo has little hope of closing the state’s projected budget gaps over the next few years if he doesn’t continue to clamp a tight lid on state operations costs — and to that end, he’s pushing for the closure and consolidation of more state prisons and institutions for the mentally ill and developmentally disabled.

"Shock" grads at Monterey

Monterey "shock" grads marching

The latest shoe to drop is the closure of four more correctional facilities, which is expected to generate a savings of $30 million a year. The move was announced last Friday, ensuring it received limited attention in weekend news media coverage. From a budgetary standpoint, however, Cuomo deserves more attention and credit for his institutional downsizing moves—even though he isn’t promoting them with anything approaching the hype he reserves for, say, token “tax cuts” in a budget that actually raised overall taxes.

(more…)

June 19, 2013


Still more backpedaling on arbitration

E.J. McMahon

The ink was barely dry on Governor Andrew Cuomo’s local government “restructuring” bill yesterday when the governor made two more concessions to unions on the issue of binding arbitration.

As explained here yesterday, the agreed-upon legislation is weaker and likely to be much less effective than Cuomo’s original proposal for capping police and firefighter pay and benefit increases under an arbitration system that has played a major role in pushing municipal compensation costs to unaffordable and unsustainable levels.

Governor’s Program Bill #21, as posted on his website late yesterday morning, would have expired in 2015 — a political off-year.  Legislative sources said the unions were pushing for a later expiration date. The original bill also contained one important loophole for unions in its final paragraph; while the effective date is retroactive to April 1, the new language would not apply to any contract dispute referred to the Public Employment Relations Board for arbitration before June 14 — i.e., last Friday, the last business day before the bill was filed.

Later in the day, however, the governor’s office substituted Program Bill #21R, containing two changes to the original: pushing the expiration date out one more year, to 2016 (which is both a legislative and presidential election year), and adding language that says the law also will not apply to disputes that resulted in a “declaration of impasse” (the step before an arbitration petition) before June 14.

April 8, 2013


Cuomo’s workers’ comp raid

E.J. McMahon

Noting that New Yorkers had been treated last week to “almost daily political perp walks” involving “a parade of office-holders,” an editorial in Saturday’s Wall Street Journal pointed out: The bigger scandal in the Empire State continues to be what the politicians do that’s legal.”

(more…)

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