New York City’s budget cutters feel the heat

AS THE budget axe falls on New York state and New York City, politicians and bureaucrats are getting an earful from irate people.

In New York City, the Metropolitan Transportation Authority (MTA) has responded to the state budget shortfall with calls for a 28 percent increase in fares, and a tripling of the fare for access-a-ride service for the disabled and elderly. The MTA also proposes massive service cuts, overwhelmingly directed at working-class neighborhoods in Queens, Brooklyn and the Bronx.

The response of MTA riders and working people in New York has been vociferous and angry. At a series of public hearings held throughout the city to discuss the MTA's proposal, people turned out in force to express their outrage. They rejected the argument--often heard over the last four decades--that the resources don't exist to bail out the MTA.

At an MTA hearing in mid-January in Manhattan, more than 600 people showed up, overwhelming the expectations of police and MTA officials. Carina Nieves, a student at LaGuardia Community College in Queens, stood up and said:

This is unfair to working people in New York City. We work hard, and we get treated like crap. People making millions or billions of dollars a year pay less [in] taxes than low-income people. I would like to see tax reform. People who make more than $250,000 should be taxed more. Low-income people are being affected more by the cuts, and we make this city run. Rich people aren't doing their share.

At an MTA hearing in Queens--held January 20, the day of the Obama inauguration--the anger was palpable.

A huge turnout of people from the Rockaway community came to denounce a proposed return to a commuter tax that would costs residents every time they drive into and out of their neighborhood--a necessity, given the paltry MTA service to the neighborhood. Johnny, a neighborhood activist from Elmhurst, got the biggest applause of the night when he threatened the board with "social revolution" if they didn't diverge from their course of "balancing budgets on our back."

For MTA officials, though, the hearings were an exercise in cynical political theater, a reality not lost on the participants.

The Queens hearings, held in the largest immigrant community in the nation, had no translation available and no advertising in the local foreign-language press. The MTA board members, slouching listlessly on the stage, were composed almost entirely of affluent white men (plus a few white women) in $1,000 suits. Many came from the increasingly discredited world of Wall Street, and few have recently seen the inside of a subway car, still less a bus.

Yet while few people expected much from the hearings, they still came out in large numbers, seeking an outlet for their anger.

THAT FURY is fully justified. The MTA crisis provides a powerful lesson about the reality of the restructuring of the economy over the last few decades. Since the 1980s, the MTA--which is independent of the state budget--has been weaned off government subsidies and has come to rely increasingly on its riders' fares for its income.

Yet despite record numbers of riders over the last few years, the MTA is projecting a deficit of as much as $2 billion in its $10 billion operating budget for 2009, and there's no money in hand for its next $25 billion-plus five-year capital budget.

Now the MTA board is busy lobbying the state government for a bailout, citing lowered state revenue from taxes as the reason. But a state bailout is extremely unlikely given the present position of the state government's Democratic Party leadership.

The more likely scenario is for the worst of the "doomsday" budget proposals to be contrasted with the only slightly less vicious proposals that came out of the Ravitch Commission, set up last year.

The Ravitch Commission plan calls for a payroll tax to be paid by employers in the 12-county region served by the authority, and for tolls on the East River and Harlem River bridges. Yet it also incorporates a fare and toll revenue increase of 8 percent--something hard-pressed commuters can ill afford.

Nevertheless, the liberal New York Public Interest Research Group (NYPIRG), through its Straphangers Campaign, has responded to the crisis by helping lay the groundwork for passage of the Ravitch proposals rather than stand with the working-class riders who have voiced opposition to all increases.

Despite being held up as a means to forestall service cuts, the Ravitch plan is starting to fall by the wayside as the projected budget deficit increases with each passing week of economic bad news.

In fact, as the state faces a massive $15 billion budget gap this year, Gov. David Paterson has proposed billions of dollars of unfathomable cuts to local government, human and mental health services, hospitals, higher education, parks, libraries, schools and nearly every state agency serving working people in New York.

There is a more progressive way to deal with the crisis--passage of the Fair Share Tax Reform proposal in the state legislature.

New York has one of the most regressive income tax structures of any state in the nation. Because of the state's reliance on sales and property taxes, New York's middle- and lower-income households pay a higher share of their incomes in state and local taxes than both the top 1 percent and the top 5 percent of higher-income households. The Fair Share proposal, known as the "millionaires' tax," offers the benefit of raising an additional $6 billion in revenue by slightly raising taxes on the wealthiest 5 percent of New Yorkers.

The biggest obstacle to pushing the millionaires' tax in the state legislature is State Senate Majority Leader Malcolm Smith, a Democrat. Despite the closure of the only two community hospitals serving his constituents in the overwhelmingly African American neighborhood of Jamaica Queens as a result of budget cuts, Smith maintains that raising taxes on the wealthy is "not the way to go." For his part, Paterson has called the proposal a "last resort."

Far from being a "last resort," the millionaires' tax should be a starting point for the fightback. Wealthy New Yorkers, who benefited enormously from the economic growth of recent decades, should pay for the crisis, which their actions largely created. If the proposed federal budget can be based on raising taxes for the wealthy, why not in New York state?

In any case, working people in New York are fed up with attempts to make them pay for the crisis. As Bronx resident Devon Meyers said of the proposed transit fare increases, "The fare hike will affect my whole family. My sister is in college, and this will make it hard for her to get to school if she has to pay more for a metro card. Also, they want to cut education, and she isn't going to be able to go to college if they do that. This is probably going to end in a strike or riot or something."