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Serious Question . . .

. . . is it just me or is the mayor/city council .5 percent sales tax increase not listed on Governor Paterson’s special session to-do list?

Then again, if the city is continually cooking books (“Surprise, here is a half billion!”), then they won’t really have to worry about it until after November 3 at least:

In May, the mayor hoped to generate $1.5 billion in revenue by raising the sales tax, doing away with a sales tax exemption for clothing and negotiating with the city’s unions on both health care costs and pensions.

He was partly victorious: The City Council signed off on hiking the sales tax to 8.875 percent from 8.375 percent and agreed to do away with the exemption for clothing selling for more than $110. The city’s unions also went along with contributing to some of their health benefits.

Elsewhere, the mayor was not so persuasive. He was unable to secure the creation of a fifth pension tier for new city employees in Albany, and the City Council refused to endorse a five-cent tax on plastic bags. In the end, the fiscal year 2010 budget agreement came up $359 million short.

This also doesn’t factor in the uncertain situation in Albany, where the legislature must approve all of the mayor’s tax proposals. The state will have to OK the sales tax increase, among other revenue measures, by July 1.

An administration spokesperson said the city will make up the revenue shortfall elsewhere. Conveniently, the city’s budget department reported last week that an additional $438 million to help fill the gap was generated thanks to “conservative” revenue projections.

But what some see as faulty revenue projections, others caution is a misleading budget process.

“It amazes me that they find a half a billion dollars,” said Councilmember Lewis Fidler. “Surprise, here is a half billion.”

“They are not playing all the cards on the deck,” added Fidler, who says the administration squirrels away funding to keep the City Council out of the budget process.

Some advocates also question whether the administration is being completely open about its revenue projections.

“If they are not being transparent about where the money comes from it makes me nervous for New Yorkers who rely on programs that are less politically popular, like AIDS housing programs,” said Barry. “We aren’t firehouses.”

Others wonder about the politics and whether the entire budget process represents an attempt to make the city’s fiscal situation appear OK for now, until after the city elections. In an analysis of the mayor’s budget, the city’s Independent Budget Office not only predicted far higher deficits in future years — climbing to $5.8 billion in fiscal year 2012 — but also observed, “Given that this a municipal election year, the difficult decisions about spending cuts and tax increases that lie ahead are unlikely to be addressed until November.”

Some advocates fearfully agree.

“People expect these cuts to be back on the table in the November financial plan after the city elections,” said Barry.

Posted: June 22nd, 2009 | Filed under: Dude, That's So Weird
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