CAN you imagine a tax increase in New York City without a public debate? Not just any tax increase – but one that’ll generate almost $1.2 billion annually? And it’s a regressive tax paid by everyone – regardless of wealth or social status.
You say it’s impossible? Well, it just happened. A portion of the city’s sales tax imposed during the 1970s fiscal crisis was scheduled to expire. Without any deliberation, the state Legislature and a compliant mayor extended that 1 percent sales tax.
During the 1970s fiscal crisis, the state increased the sales tax by 1 percent and dedicated the proceeds to pay off the debt incurred by the Municipal Assistance Corp. The promise was that when the MAC debt was eliminated, so would be the incremental sales tax.
Well, the MAC debt ended; the 1 percent sales tax was to sunset on July 1, 2008. Mayor Bloomberg, however, asked Albany to halt the sunset and reimpose the sales tax so that it could be used for general city operating expenses.
There’s nothing implicitly wrong with extending a tax – so long as there’s proper debate and public dialogue, especially among those who’ll be paying the tax. But the tax was extended indefinitely with no discussion, debate or even hearings.
Why not use a portion of the tax to implement congestion pricing? We just went through a long-winded public dialogue on the subject with the goal of receiving $354 million in federal money for the project. That’s just a drop in the bucket compared with the billions of dollars that’ll come from the extension of this sales tax. Why didn’t anyone think of dedicating a portion of this tax extension to congestion pricing?
Why not dedicate a portion of the tax to fund education in the city? Or to fund asthma elimination? Why not consider eliminating the tax and enhancing the viability of the city’s retail industry?
These are all good questions that deserved to be deliberated by the public. But it’s too late. In the wee hours last week in Albany, three men in a room, plus the mayor, decided to raise a tax without public input. We should all be outraged and scared when this happens.
Supreme Court Justice Louis Brandeis once said, “Sunshine is the best disinfectant.” Well, something here smells really bad. At a time when we need accountability more than ever in Albany and City Hall, our elected officials opted for Soviet-style decision-making. No discussion. No transparency. No accountability.
I am amazed that there wasn’t one public hearing on this tax. What exactly does the City Council do?
The vaunted Citizens Budget Commission said nothing on the subject to assist the city’s citizens on how to evaluate options regarding the tax. Not a peep was heard from the city or state comptrollers.
Not one city editorial board wrote a word about the tax. Should there be a tax increase? Should the tax be allowed to sunset? Is the tax extension good or bad for the city? All good questions, none of which has the added-value insight of the editorial pashas.
What else have our elected leaders done without our input?
Joe Lhota served in the Giuliani administration as deputy mayor and budget director.