April, 11, 2018:  Paul Ryan announced his plan to retire from Congress in January 2019, at the end of his current term, and further stated that he will not run for re-election.

Ryan said that he is proud of the accomplishments which occurred during his 20 years of service in Congress, although he regrets that ‘they were unable to achieve Entitlement Reform’ during his tenure in office.  Despite his vocal regrets, he is planning to leave Washington in January 2019 with some of the most generous and egregious entitlements remaining in the U.S.

It has been said that Ryan’s remaining goal (‘Entitlement Reform’) is razor focused on cutting federal spending on Medicare, Medicaid and welfare programs as a way to temper extraordinary increases in the federal deficit.

These increases in the deficit were willfully enacted as a component of the 2017 Tax Cuts and Jobs Act as a result of rare, curious, wild and crazy tax cuts combined with wild and crazy spending increases, at a point in our economic cycle which begs for caution and restraint.

Paul Ryan said that he is extremely pleased to have played a significant role in the passage of the Tax Cuts and Jobs Act which he considers to be a highlight of his service in Washington.

Background on Jobs:

Since 2010, the U.S. economy has supported the creation of almost 17.5 Million jobs, leading to a November 2017 unemployment rate of 4.1%, a 17-year low. (Perspective: Unemployment reached 15% toward the end of 2009; many economists agree that “full-employment” occurs when the unemployment rate is at 5% or lower.)

Hundreds of U.S companies have been looking to hire workers for skilled positions to help them meet growing demand for their products and services. These jobs are often called “family wage jobs” because they provide compensation and benefits sufficient to support a family in the local economy.

The number of job openings in the U.S. (October 2017) remained at the 6 Million level, marginally lower than at the end of 2016. (Perspective: When the Great Recession was at its worst in 2009, job openings fell to 2.2 million, an all-time low.)

Average hourly earnings had risen just 2.5% over the 12 month period ending in October 2017, helping to support the theory that a significant skills gap continues to impede hiring for family wage jobs which typically require advanced reading, math and computer skills.

In addition to the dilemma of finding skilled workers in shrinking regional labor market pools (“skills gap”), hiring managers and economic development experts also report obstacles cited by job seekers such as: transportation (including long commutes); day care/child care; and noncompetitive wage rates.

Despite these documented facts, Paul Ryan, many members of Congress and President Trump actively and enthusiastically supported “The Tax Cuts and Jobs Act” of 2017, telling us – among other things, “Our legislation is focused entirely on growing our economy, bringing jobs back to our local communities, increasing paychecks for our workers…”

At a point in time when we had apparently reached full employment; when some 6 Million higher-skilled, family wage jobs were unfilled, at least 2 questions remained unanswered:

– Other than engaging in war, or the innovative programs launched in the 1930’s (CCC, WPA, etc.), has the federal government ever succeeded in an effort to create sustainable private sector employment?

– If new family wage jobs are created, who would be available to fill them?

Background on the tax side:

When George W. Bush (POTUS 43) took office in January 2001, he inherited a federal budget from his predecessor.

Fiscal Year Ending (FYE) 9/30/2001 resulted in revenues of $2.39 Trillion and expenditures of $2.23 Trillion, resulting in a budget surplus of $0.15 Trillion. FYE 2001 federal debt held by the public was $3.34 Trillion, representing 31.7% of GDP.

Fast forward to his final full year in office (FYE 9/30/08), Bush watched over a federal budget which included revenues of $2.52 Trillion and expenditures of $2.98 Trillion.

That left a FYE deficit of $458.6 Billion, which (combined with prior deficit spending) resulted in total federal debt of $9.99 Trillion at FYE (9/30/08), representing 67.7% of GDP.

The federal budget for FY 2009 was developed by then-president Bush, submitted to Congress, and inherited by Obama (POTUS 44). The actual federal revenues for FY 2009 were $2.10 Trillion; expenditures were $3.52 Trillion. That left a 2009 FYE deficit of $1.41 Trillion, which (combined with prior deficit spending) resulted in total federal debt of $11.88 Trillion at FYE (9/30/09), representing 82.4% of GDP.

Most reasonable people will agree that a newly elected President who inherits a spending plan from his predecessor should not be given credit for its success or failure.

POTUS 44 (Obama) presided over 7 years of steady economic growth in the U.S., and under his watch, the close of FY 2017 budget reflects an increase of total federal debt to $14.67 Trillion, which was a numerical increase, but which represented a relative decrease to 76.3% of GDP.

Not great, but a clear improvement over what Obama inherited from Bush.

Some economists have suggested a 60% ceiling for publicly held debt vs. GDP which seems to make sense.

Although policies enacted during the Obama administration did reduce the ratio for 82% to 76%, we have a long way to go.

The correct way to address this situation is through tax policy reform designed to create balanced federal budgets, focused on reducing federal deficits.

That is not what our Congress has approved, and what President Trump signed into law just prior to Christmas 2017.

Most recent analysis by the Congressional Budget Office (4/10/2018) estimates that the combined effect of the 2017 tax cuts and the March 2018 budget-busting spending bill is sending the annual federal deficit toward the $1 Trillion mark in 2019.

The CBO report says our nation’s current $21 Trillion debt would spike to more than $33 Trillion in 10 years, with debt held by investors spiking to levels that would come close to equaling the size of the economy, reaching levels that many economists fear could spark a debt crisis.

CBO says economic growth from the tax cuts will add 0.7 percent on average to the nation’s economic output over the coming decade. Those effects will only partially offset the deficit cost of the tax cuts.

The administration had promised the cuts would pay for themselves.

Best I can see, only Robert Reich has focused on the Real Facts, and who would listen to a guy like Reich, who has degrees from Yale, Oxford, Dartmouth — clearly a left-wing Liberal Snowflake….

As interim Pres. Trump tweeted today, “We are with you, Paul!”

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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!

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.

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!

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…..

I live in New York State, often thought of as the land of high taxes and the home of Wall Street.

Current debate in New York has to do with what is called a “millionaire’s tax” which is really just a graduation of income tax rates as incomes rise.

Today, the NYS income tax on a typical New York family is 6.85% on taxable earnings up to $300,000 annually.

The‘surcharge’ starts to kick in when taxable household income for a family exceeds $300,000, causing incremental taxable income over $300,000 subject to NYS Income Tax at a rate of 7.85%, and at $500,000, the marginal rate then rises to 8.97%.

Now let’s take a look at a family in New York State with an annual taxable income of $750,000.

That is about $14,400 per week.

If the “millionaire’s tax’ expires, this family will save about $7,300 at tax time, which equates to $140 per week.

Meanwhile, the Empire State is facing a potential $3.5 Billion deficit in the coming year.

Why would Governor Cuomo not support the extension of this surcharge on the highest earning households?

On another level, one danger of having an uneven income tax landscape in adjacent states is that these highly compensated individuals can easily relocate — note that Greenwich, CT has become the capital of the hedge fund industry; and that downtown Stamford, CT is home to several large investment banking operations (UBS & RBS).

There is currently an effort by the State of Ohio to bring the headquarters operation for Sears from the Chicago area where it’s been forever, to the Columbus area.

Illinois claims they are not in a position to offer hundreds of millions to Sears to retain their operations there; meanwhile, Ohio — with nothing to lose and plenty to gain — is willing to offer a $400 Million incentive package as an inducement to bring 10,000 jobs and all of the ancillary spending that accompanies such an operation.

This news made me stop and think — while our local towns, counties, cities and states are working hard to cannibalize each other, we lose sight of the world economy, and when jobs move overseas, citizens in the U.S. get up in arms, surprised and shocked.

I’m all for ‘home rule’ to a point — but when home rule decisions result in zero sum solutions which have short term benefit (offset by short term loss) to one local region vs. another– accompanied by serious long-term negative impact on our entire nation — we have a flawed public policy that needs immediate attention.
The Walrus thinks it is time to rethink our entire system in the U.S.A. to – hopefully – make it more relevant and competitive in our current world economy…..

Almost Perfect Weather

June 1, 2011

We had cold and rain here just about all of May, and on the first of June, we now have 90 degree weather with humidity. The weather service posted a severe storm warning around 5 PM today, so I assume a cold front is coming in.

We pay major bucks in taxes here in the Lower Hudson Valley of NYS in exchange for promises of perfect weather.

I think our boys in Albany have recently begun to promise a bit more than they can deliver.

I guess with the climate change, they will have to be raising our taxes again in order to upgrade the tools needed to keep pace with technology so that they can go back to delivering perfect weather.

As a loyal New York State taxpayer, I can tell you, “It’s worth it!”

With the exception of a few NYS Senators who have had to go back to meteorological school (Guy Velella, Joe Bruno, Hiram Monserrate, Efrain Gonzalez, Pedro Espada and Vincent Leibell are now in school, or have recently graduated), our boys in Albany are among the finest Elected Officials in the U.S.

Mighty pleased to be a taxpayer in New York State, and looking forward to a return of Perfect Weather!