Zero Sum Game

January 12, 2014

Our elected officials love to make noise about ‘holding the line on taxes’ — whether at the federal, state, county or local level.

In the private sector, we know there are 2 ways to improve fiscal efficiency. One way is to increase revenues, either by selling more products or raising prices on existing products. Another is to reduce costs.

The public sector is much more complex, because of the layers of government which often overlap and have some redundancy.

One thing is clear: if the federal government cuts back on safety net services to reduce costs, the need for those services is still there. Provision of services (or some substitute) thus rolls down to the state, county or local level. In the jargon of economists, that’s known as the ‘Zero Sum Game’.

I live in the City of Mount Vernon in lower Westchester County NY.

Westchester has a very large share of residents who are among the wealthiest Americans. Some call their Westchester residence home, while others use their Westchester property as a secondary or tertiary residence. Because of these very wealthy families who own extraordinary properties, Westchester has one of the highest median property values in the United States, and is ranked 1st of the 3143 U.S. counties in order of median property taxes.

What they fail to mention is that most properties in Westchester County are taxed by 3 different entities: The County (18%); the municipality (22%); and the school district (60%).

For me and my Mount Vernon neighbors, the estates of the landed gentry might as well be on another planet.

Those of us who live in Mount Vernon are seeing the effects first hand of what happens when politics gets in the way of reality. We experienced a very contentious and hard-fought battle for the office of County Executive in the second half of 2013.

The incumbent, Rob Astorino, campaigned relentlessly on his Tea Party platform of No Tax Increases!

Despite the fact that county property taxes in Westchester typically represent less than 20% of the total property tax burden, the sound bite of No Tax Increases, combined with a consistent message that his opponent – in his role as Mayor of New Rochelle – had raised taxes on New Rochelle property owners, Mr. Astorino gained the support of a number of factions, including some elected officials, and he was re-elected.

Now, because the County has not increased taxes, it has cut funding for vital services, and guess where the vital services are most needed?

Cities like Mount Vernon, Yonkers, New Rochelle, Peekskill are left holding the bag. No funding from the County for services? City taxpayers pick up the tab in their City budget, instead of spreading the tax burden across the broader County tax base and allowing property owners in all areas to share the cost of services which tend to impact most on lower-income areas.

A recent report ranked 4 Westchester towns — including Briarcliff, Lewisboro, Irvington and Pleasantville — as some of the safest areas in New York State to live. Those folks can well afford to pay for great schools, plenty of police, etc. in part because they don’t get burdened with covering the costs of services in less affluent communities.

Here in Mount Vernon, we have an elected City Council member who was a vehement supporter of Rob Astorino in his re-election campaign, loving the promise of no tax increases. Now, the City taxpayers are facing an 8% City tax increase in order to maintain some semblance of vital services which the County will no longer provide due to budget cuts.

Our City Council member is visiting somewhere in the Twilight Zone, creating her own illusions of reality, and she has supporters who believe in her?

Let me warn you folks: Don’t drink any of her Kool Aid! And, be very careful of the messages you hear on the election trail!

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