June 14, 2015
Bowing to extraordinary pressure from both the Catholic Church and Orthodox Jewish blocs, NYS Governor Andrew Cuomo has put his weight behind an ‘education Tax Credit’ proposal that is just plain wrong.
No matter how you slice this, it is not just wrong, it is also unconstitutional.
Our federal and state constitutions mandate certain services be provided to all residents and citizens, services which include public education.
Sometimes, economists view the shifting a tax burden required to provide sufficient funding to ensure provision of adequate and acceptable services from one taxing entity to another in order to create the illusion of a tax cut or a public cost savings as a “Zero Sum Game.”
This proposed tax credit program is certainly NOT a zero sum game.
The sole beneficiaries of this proposed tax credit charade will be those families – and their allies and supporters – who elect to eschew the free and publicly supported education system which is intended and expected to provide all children in New York State the opportunity for a “sound basic education,” defined as a meaningful high school education that prepares students for competitive employment and civic participation .
When Rhode Island adopted an education tax credit program a few years back, it resulted in a windfall for the state’s two Jewish day schools. Between them, their students received some $400,000 in scholarship money in the program’s first year.
In Florida, tax credit legislation has resulted in nearly $10 million annually for scholarships for Jewish day schools and yeshiva students.
Now New York, which has some 150,000 Jewish day school and yeshiva students — more than all the other states combined — has a chance of getting an education tax credit program that could deliver millions of dollars annually to Jewish day school families.
Another primary beneficiary of this proposed tax credit program will be supporters of private Catholic schools which have been plagued with declining enrollment and decreased core funding from the Church for several decades.
Offering a small number of self-selecting individuals the option to designate (Read: Divert) up to 75% of their NY State Tax Liability to fund private religious schools is just plain wrong.
May 10, 2014
The news this week included a report from Institutional Investor which tells us that the top 25 Hedge Fund Managers took home a combined $21.2 Billion in 2013, a significant increase over 2012, when earnings totaled just $14.1 Billion, the lowest sum since the 2008 financial crisis.
If I did the math correctly, the average wage of these 25 individuals computes to $407,692.31 per hour, somewhat above our current $7.25 per hour minimum wage.
What is it that Hedge Fund Managers do that makes them the highest paid people in the world?
Do Hedge Fund Managers create economic value? Do they create jobs? Do they make products or deliver services which make our world a better place?
Unfortunately, they seem to do none of the above.
Hedge Fund Managers look for opportunities to exploit temporary weaknesses, gaps, flaws or aberrations in the operations of a specific company or in an economic sector overall.
They typically have billions of dollars of resources at their disposal, and by creating and taking well-crafted and strategic financial positions, they have the ability to move markets, generally to their own benefit.
The film “Other People’s Money”, starring Danny DeVito and Gregory Peck, was released in 1991. Danny DeVito plays the role of “Larry the Liquidator” providing us a crude but quite accurate roadmap of what Hedge Fund Managers do every day.
In the 19th century, we called this sort of activity “Piracy” and we labeled the perpetrators “Pirates”.
In the 20th century, we called this sort of activity “Organized Crime” and we labeled the perpetrators “Mafia” or “Gangsters”.
Here we are in 2014, clearly well into the 21st century.
Our Hedge Fund Managers are out in the open, creating outcomes which seem to have no potential for positive impact on the U.S. or world economy, and we are giving them not just permission to operate (no regulatory oversight), but also preferential tax treatment on their booty (known as ‘carried interest’).
Hedge Fund Managers typically receive their compensation in 2 ways – an overall management fee equal to 2% of assets under management, and a 20% share of any profits on the assets under management.
It is the tax treatment of that 20% fee — categorized as Carried Interest — which is currently taxed at 20% — versus the 39.6 percent rate which business owners must pay on their earned income — that has created somewhat of a firestorm in Washington.
None of this makes any sense to me: does it make sense to anyone?
April 10, 2014
I live in Westchester County, NY – the place they say has the highest property tax burden in the U.S.
Our Governor – Andrew Cuomo – also comes from Westchester County — and he has made it his mission to support effective ways to reduce and/or eliminate the government waste which necessitates the high property taxes we pay.
The incredible inefficiency of having 400+ independent government entities operating within Westchester County certainly is a primary culprit for the dubious honor of being named the highest taxed county in the U.S.
The largest portion of property taxes paid is attributable to funding public schools — 41 regular school districts in a county with less than 1 Million in total population.
Each of these districts is ‘self contained’ in that they have their own administration, buildings, and all of the fixed cost infrastructure which gets paid for whether there 275 students served (Pocantico Hills at an average per-pupil cost of $42,000) or 25,000 students (Yonkers at an average per-pupil cost of $19,600).
Contrast this to Montgomery County, Maryland — about the same physical size as Westchester, and with a very diverse population of just under 1 Million, demographically quite similar.
Montgomery County has just one school district which educates all of the 150,000 public school students in the county at an average per-pupil cost of $15,421.
Just about every year, Maryland Public Schools are ranked at the top in the nation. http://www.washingtonpost.com/blogs/maryland-schools-insider/post/maryland-schools-ranked-number-one–again/2012/01/11/gIQA7NEqrP_blog.html
While Montgomery County — perhaps due to its ethnic, racial and economic diversity — is not number one in the state, it seems to consistently score in the top 10, and compares very favorably against the composite Westchester score.
It’s really time for the taxpayers in NYS to put aside the political rhetoric and to find a way to reduce overall costs, whether through actual mergers and consolidations, or through consolidation of services which are not directly related to the classroom.
We can do better, and we must!
March 1, 2014
The Walrus recently learned that former Town of Somers Supervisor Mary Beth Murphy was appointed as executive director of the Westchester County Tax Commission by County Executive Rob Astorino, a fellow Republican. The job, which enjoys a six-year term, pays $132,155 a year.
Ms. Murphy told a local media outlet that she was “…very grateful for the opportunity to serve the people of Westchester, I was supervisor for 16 years, and I certainly dealt with tax issues during my tenure there. It brought exposure to multiple levels of government. “
The Westchester County Tax Commission ostensibly serves as the repository for the assessment rolls from the county’s multiple taxing jurisdictions; is tasked to provide advisory services to municipalities concerning assessments and assessment procedures; and produces an annual report to the county Board of Legislators.
Off hand, I’m thinking this person is absolutely unqualified and not fit to serve in this position. But, that is the nature of a system where officials are often elected to office based on a ‘beauty contest’ enhanced by a campaign war chest of dubious origin; then those ‘elected officials’ are free to appoint political hacks into positions which can have dramatic impact on society.
This pretty much says it all, another quote attributed to Ms. Murphy from her tenure as Supervisor in the Town of Somers: “We have a good way of reporting our tax bills, and did not see a desire for it by the constituency. The town has a very good reputation for its tax rate.”
According to what source? And on what standing?
The old “Home Rule” defense rears it’s head again. And, it was a great idea in pre-revolutionary war days. Sometime after the Civil War, Home Rule became obsolete, yet we still follow that logic in 21st century New York State?
Wondering why Westchester County has won the prize to become the highest property tax location in the U.S.? It’s entirely due to Home Rule and the incredible waste and duplication of services which result.
Most egregious? The folks in the wealthy white suburbs who are willing to pay through the nose to fund their quasi-private public schools, town and village police, etc. but who balk at the idea of providing any support at all to County taxes which in turn support social safety net services for their less fortunate neighbors.
February 9, 2014
We have some 700 public school districts across New York State, and as Governor Cuomo pointed out recently in an interview, “It’s not about more money gets us more results. Because if that was the case, our students would be doing better than any students in the country, because we are spending more than anyone else.”
No one could successfully argue that the K-12 public education system in New York State is either (a) effective, or (b) efficient.
Designed and governed under assumptions which were likely correct in the 19th century, we continue to operate our schools as though we live in a world where the horse is the primary means of transportation; where oil lamps and candles are used for illumination after dusk; and where young people are needed early and late each day to do chores on the farm.
An article published on February 7, 2014 in The Journal News (http://www.lohud.com/article/20140207/NEWS/302070065/City-rural-schools-say-they-re-underfunded) helps to illustrate some of the complexities in state funding formulas which seem to have disparate negative impact on small city and rural school districts which are more likely to be both ‘high need’ and ‘low resource’.
Digging further into the mystery of school funding in New York State led me to the NYS Association of Small City School Districts, and the December 2013 newsletter, http://scsd.neric.org/newsletters/2013/2013%20SCSD%20Newsletter%20december%202013%20FINAL.pdf.
One of the outcomes of ‘The Campaign for Fiscal Equity’ was a promise made in 2007 by our elected officials in Albany that state funding would be adjusted to take into account both the availability of local resources and the relative “need” of students in each district.
As Governor Cuomo pointed out, we are already spending the most of any state on education, and our overall results are mediocre.
Indeed, it is not how much we are spending, but how the money gets spent. If our elected officials want to constrain education spending, they need to pass legislation which removes costs from the system. One way to accomplish that would be through school district consolidation to remove redundancies and spread fixed costs over a broader base.
Another way to accomplish holding the line on spending would be to divert aid from wealthy, high-performing districts and re-direct that aid to low-resource, under-performing districts.
When it comes to educating our young people, there really doesn’t seem to be any “starve the beast” solution on the horizon.
Let’s pay attention to this issue now, because if we don’t fix it now, it will only continue to fester and act as a drag on the economic and fiscal viability of New York State.
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!
September 4, 2013
Back when the Walrus was just a pup, the great George Santayana wrote, “Those who cannot remember the past are condemned to repeat it.”
Another version is printed as “Those who don’t know history are doomed to repeat it.”
However we weave the words, the concept is that we can look back at history, and use the outcomes from various actions to inform what might happen in the present should we repeat an action from the past.
It could be a military action: The outcomes from the Vietnam War could have provided a lesson to the U.S. in 2001 that invading foreign countries over ideological and/or religious principles is an absolute exercise in futility. Instead, the U.S. invaded Afghanistan and Iraq, and now is contemplating military sanctions against Syria.
It could be an industrial action: The outcomes from the Love Canal saga in Niagara Falls, NY where the NYS Health Department proclaimed this as a “national symbol of a failure to exercise a sense of concern for future generations” could have provided a lesson to the U.S. in 2005 when the federal Safe Drinking Water Act (SDWA) was substantially amended.
Instead of using the mistakes of the past to inform us in the present, the federal Energy Policy Act of 2005 contains a provision that has come to be known as the “Halliburton Loophole” — an exemption that excludes gas drilling and extraction activities (popularly known as ‘fracking’) from requirements in the SDWA by making the chemicals found within fracking fluid a “trade secret” – thus exempting them from any regulatory oversight.
It could be a social action:. Prohibition – implemented in 1920 as a result of the 18th Amendment – came about from presumably well-intentioned activity championed by The Women’s Christian Temperance Union (WCTU). They believed that banning alcohol would reduce domestic violence, child abuse, and crime.
By the time Prohibition was repealed (1933) by ratification of the 21st Amendment, it should have been clear that even an amendment to the U.S. Constitution wasn’t going to change human propensity toward relaxation and enjoyment.
Prohibition didn’t work at the basic human level, and it helped to create an off-the-grid economy which brought all of the activities of manufacture, distribution and retailing of alcoholic beverages out of the legitimate economy where it was regulated and taxed, into a shadow economy which ostensibly was controlled by organized crime and bootleggers.
Before Prohibition, the sale and consumption of alcoholic beverages was regulated and taxed, providing a net positive benefit to government operations; after, the enforcement costs spiraled while revenue disappeared.
Prohibition of alcohol was repealed in 1933, yet 80 years later, we continue to make growing, distribution and consumption of marijuana a criminal activity.
As a nation, we are spending somewhere near $6 Billion annually to attempt to enforce archaic regulations pertaining to marijuana related activities.
We receive no income taxes, no sales taxes and no revenue taxes related to marijuana production, distribution or sales. There is plenty of legitimate research which shows that marijuana is less harmful. – In fact, more salubrious – than alcohol.
As a taxpayer, I say, “stop wasting my tax dollars on pointless enforcement; legalize, regulate and tax marijuana; and reduce my property and income tax burden attributable to archaic and foolish laws and regulations!”
August 8, 2013
Rob Astorino – young and inexperienced – was elected to become County Executive in Westchester County NY in November 2009. He ran on a Tea Party platform — at the time (and still today), property owners in the 40+ towns, villages and cities in Westchester County were paying about the highest property taxes in the U.S. Astorino won the election on his promise to cut Westchester County property taxes.
Good news: he succeeded. He delivered what he promised. My County property taxes have decreased by almost $200 since Rob Astorino was elected!
On the other hand, my total property taxes – including City, School and County – increased by +$3,500 since Mr. Astorino was elected — an increase of over 18%.
Over the past 3 years, I have watched Westchester County cut support for safety net services and send the responsibility for providing those services downstream to the local towns, villages and cities.
That makes me very sad, because while the need for services doesn’t go away, and we can and do save $1 in taxes at the County level, only to find that our local municipal and school taxes go up by $3.
We need a County Executive who is able to see and understand the big picture, not a County Executive who has no experience other than as a silver tongued broadcast journalist. This is the 21st century, and we are in a very competitive economic environment.
We just can’t afford the distractions which come from our County leadership sparring with State or Federal government over issues like a consent decree for fair housing, or a mandate for clean water.
Noam Bramson gets it. He is a moderate, middle-of-the road leader who is able to see the big picture and make decisions based on the best interests of the majority of citizens today – and in the future — of our Westchester communities.
Let’s help Mr. Astorino return to his real strength – broadcast journalism – where he has the best chance of making a mark on the American landscape which doesn’t damage the lives of so many good people…..
August 4, 2013
I’ve recently been called out as a bigoted liberal who is a ‘hater’.
I think the reason for that is that I take exception to some current Tea Party shenanigans. I try not to be a ‘hater’ but I am willing to call out when I see or hear commentary which seems to be non-productive.
Here are some Walrus thoughts:
A widely accepted view of Liberalism incorporates the political philosophy founded on ideas of liberty and equality. It is generally acknowledged that Liberals support ideas such as: free and fair elections; civil rights for all people; freedom of the press; freedom of religion; free trade; and rights of people to own and protect their private property.
The 17th century philosopher John Locke is often credited with founding Liberalism as a distinct philosophical tradition. Locke argued that each man has a natural right to life, liberty and property and according to the social contract, governments must not violate these rights.
The U.S. Constitution and Bill of Rights reflect that the very foundation of our country is based on Liberal principles.
The original ‘Tea Party’ – The Boston Tea Party (circa 1770) — was all about anger and resentment of British mandates on the Colonies – often summarized as an objection to “Taxation without Representation”.
Today’s Tea Party seems to claim a connection to the Boston Tea Party, though I don’t grasp their logic, or see any connection at all.
We have a governmental structure in the U.S. which allows and encourages everyone eligible to vote to get engaged in the political process and to vote. In 21st century America, there is no “Taxation without Representation”.
The basic tenets of the modern Tea Party – as I understand them – are to reduce government spending thus cutting taxes on U.S. citizens.
I’m all for that.
The only way I know of to reduce government spending is to re-engineer government.
The majority of my tax burden comes from a combination of taxes on: (1) Income (Federal and State); (2) Sales (State, County & City); and (3) Property (County, City and School District).
There are plenty of other taxes I pay which are buried in: my telephone bill(s); my utility bills(s); the gasoline I purchase; hotels I stay in; and airplanes I fly on.
Slashing spending without a plan to re-engineer government is a recipe for disaster.
Other than calls to “cut taxes, make government smaller and reduce spending” I haven’t heard or seen any sort of plan. Lots of noise, no plan? It wouldn’t fly where I work.
Fact is, the current Tea Party movement is quite similar to the Contract with America which was championed by Newt Gingrich in the 1990’s. It was all about shrinking the size of government, promoting lower taxes, and eviscerating safety net programs for disadvantaged people.
No plan, just a lot of noise.
Prior to that, we had The Moral Majority, which started in the mid 1970’s when Jerry Falwell created a national platform to raise awareness of social issues important to him and his followers.
The Moral Majority was launched and heavily supported by a coalition of conservative southern Christian right leaders, congregations and political action committees which campaigned on issues its personnel believed were important to maintaining its Christian conception of moral law, a conception they believed represented the opinions of the majority of Americans.
At its peak, the membership of the Moral Majority was in the 4 million range, with over 2 million donors. It was one of the largest conservative lobbing groups in the U.S. at its zenith. Their first key victory was the defeat of Jimmy Carter by Ronald Reagan in 1980, and they continued to have power and influence until the late ‘80’s.
Again, a lot of noise, but no plan to reduce the overall size of government.
Before that, many of our fellow Americans who identified with this ideology were members of the Ku Klux Klan, and some still are, apparently….
May 9, 2013
My friend Jack Flood lives the good life in Vermont. Sometimes, he does get fired up about things, and he’s been known to revert to some pretty salty language when things seem to be getting way out of control.
I say all of that because it was Jack who inspired me to look into this stuff about the “Benghazi Cover-up” that we are now reading and hearing about.
Sorry, Jack, we have to start with some really boring stuff.
The fiscal year for the 2013 U.S. Government began on October 1, 2012 and will end on September 30, 2013.
Total spending approved in this budget is $3.8 Trillion, so the costs to U.S. Taxpayers of just over $5 Billion to support our 535 elected officials who serve in the House of Representatives and the U.S. Senate is just a drop in the bucket.
This $5 Billion number is way beyond the basic costs of salaries and benefits for our elected officials. It incorporates all of the costs of support staff, office expenses and so forth – what accountants call “fully loaded costs”.
When you look at the approximately 175 days Congress is in session, that $5 Billion annual number breaks down to about $30 Million per day, still just a drop in the bucket of our full $3.8 Trillion Federal budget.
That said: It is this $5 Billion annual investment of taxpayer dollars that we rely on to put in place the checks, balances and controls which we count on to ensure our overall Federal spending is wise, efficient and effective.
Those who are elected to the House of Representatives in the U.S. must be at least 25 years old; Elected Senators must be at least 30 years of age. These folks are adults, by any definition.
Jack asked: Over the past 2 years, what has our Congress accomplished that has any value to U.S. taxpayers?
I agreed to do some research and report back to him.
Frankly, I’m nervous. I’ve watched from the sidelines over the past several years while these elected adult citizens of the U.S. seem to pursue their own petty personal political games.
Jack is particularly interested in a current situation: A Congressional investigation into the tragic attack on the U.S. embassy in Benghazi, Libya on September 11, 2012 which resulted in the deaths of 4 American citizens.
Jack told me that former Secretary of State Hillary Clinton was called to testify on January 23, 2013 before the House Foreign Affairs Committee about the deadly assault in Benghazi.
At that apparently friendly, fact-finding hearing on January 23, a newly elected Senator from Wisconsin — Senator Ron Johnson – may have stepped a bit beyond the boundaries of decorum, resulting in an answer from Clinton that has been taken out of context: “What difference, at this point, does it make? It is our job to figure out what happened and do everything we can to prevent it from ever happening again.”
I’m not sure about that answer. After all, wasn’t her husband almost impeached a few years back?
I plan to contact Kenneth Starr and dig a bit deeper before I agree to consider supporting Jack Flood in his quest to reduce wasteful spending by our elected officials in Washington.