Tax Grievance

Today, in a definite affront to the IRS, a 53 year old man carried out a suicide mission against the ageny. He set his house on fire this morning, left a rant on a website, climbed into a small plane and flew it into an IRS building in Austin, Texas causing a major fire and inflicting serious damage. Wow, that is moxie, America usually doesn't have suicide bombers.

I'm not condoning his actions but we can certainly identify with his rage against the agency here on the verge of tax season. I don't know what his particular situation with the IRS was but of the taxes I have to pay, the IRS piece is just one part. I pay plenty in Social Security (FICA) tax, New York State tax and property taxes not to mention sales tax, gasoline tax and all those other taxes that come out of my wages.

Perhaps the IRS has come to represent the evils of rampant taxation in general. Or maybe, because he lives in Texas, where there is no income tax, it was the agency he had to most contend with. I wonder if his actions change the tax situation for his family or if he has now egregiously left his problems to them.

GM Bankruptcy: Par for the Course

So GM is dead-ish and the market did not raise an eyebrow. One of the largest manufacturing companies in the United States is being shepherded through a structured bankruptcy on the taxpayer's dime to the tune of $50,000,000,000, not including the $19,000,000,000 it has already received, and the market rallied several hundred points apparently overjoyed over other unrelated positive, though flimsy, economic data. Apparently investors felt that the GM thing was expected and already priced in so no big deal. Par for the course.

In the course of less than a year, another industry giant has been transferred to the taxpayer dole, let us not forget AIG, Fannie Mae, Freddie Mac and the dizzying array of financial firms that are now majority owned or significantly owned by the American Government. Smacks of that "S" word, doesn't it. Yech! Actually, I don't see any problem with socialism, we are trying to save America in this global economy, aren't we? Though it does look bad that the government of the country that is/was the economic powerhouse of the world is bailing out the firms that underwrote its superiority. Furthermore, this government is as bankrupt as they come. If the American government was a company, it would have sought chapter 11 a long time a go.

Why is the financial sanctity of this country so reputable when it has not been able to balance its books in nearly a decade? Now this government sits on the brink of skyrocketing legacy costs and it cannot negotiate any settlement. Sounds a lot like GM. The perceived strength of the US government lays upon its solid revenue source - the American taxpayer - but it cannot sell the prospect of higher taxes or reduction in services to the representative body of this bunch; it is considered political suicide. It has the largest military in the world and so cocoons its weakening financial condition with weapons. We are democratic, we are free, we are safe, we are broke.

But, we are saving GM and the rest of the funky bunch but the amount given to GM and Chrysler, which I still cannot understand why Chrysler is being sold to a foreign automaker but whatever, is still a drop in the bucket compared to what has been given to AIG and the financials. Now Wall Street is happy and the market is rallying while they criticize the President for spending too much money. How can anyone even mention free market in the same breath?

The government can save GM but at some point we will need to save the government. We will all have to pay a lot more taxes. Is there any other way?

Housing Market on Long Island Still Depressed

Today I heard some disturbing news about the state of the housing market on Long Island. There is now a 31 month supply of homes on the market; over 35,000 homes for sale. In the last 6 months a little over 1000 homes were sold. Now that prices are declining, there are more interested buyers, but declining values will put more of those new home buyers of the last 2 or 3 years underwater where the amount owed on their mortgage is greater than the market price of the home. It may also put many of those who tapped their home equity based on peak market values underwater as well.

While there may be glimmers of hope in some pockets of this turbulent economy, the reality is that homeowners in Long Island and downstate New York are in trouble. Sadly, due to the high cost of living in this region, those homeowners who are laid off, underemployed, or whose wages have been reduced for any reason barely stand a chance of survival for very long unless they have ample savings. Many of those home buyers of the last 2 or 3 years were financially stretched when they purchased the home in the first place. But, they feared missing out on the opportunity to own a home when prices started to skyrocket putting any chance of home ownership out of reach for much of the middle class. Now, that home is a financial burden in itself.

Unfortunately, the financial safety nets that cheap money provided such as the ability to tap home equity if one needed extra funds or the ability to pick up another credit card on the fly, if times got a little tight, are gone. What will the homeowner turn to when he or she needs to make ends meet? We are facing a lot more foreclosures on the Island and a lot more desperate homeowners in New York.

Meanwhile, Albany is behaving as usual, jacking up the budget by $10,000,000,000 over last year, making underhanded funding deals with the MTA, granting all unions basically a stay of financial execution and a myriad of other deplorable financial conduct in a state that ranks in the top 3 for the highest taxes and cost of living nationwide and where taxes associated with Wall Street account for 20% of the state budget and we know how well they are doing. Long Island suffers from the same pigheadedness that New Yorkers do, too big, too important, too powerful to fail.

What to do? Though Long Island is an aging suburb, it has the benefit of a desirable location and has plenty of options that it refuses to accept. Long Island could minimize its downward spiral simply by implementing a few of the recommendations proffered by the Island's best economic minds, Chief Economist Pearl Kamer, Martin Cantor, Director, Long Island Economic and Social Policy Institute at Dowling College and Irwin Kellner, Distinguished Scholar of Economics, and the Rauch Foundation's excellent economic overview, Long Island Index. Taken together they have researched, reviewed and recommended viable solutions that will help Long Island regain its financial footing.

Bold action is always recommended, even desired, but rarely ever implemented. So it may very well be that we will watch, defiantly, as Long Island and even New York State continue their downward spirals while everyone else is finding their way out.

Gingerly Hoping for the Best

This weekend brought warm comfort from dear friends as we commiserated together and reset our outlook. I have never been surrounded by so many professionals simultaneously out of work or underemployed in my whole working existence. We are all hoping for the best. It is hard to fathom the breadth of this economic collapse. It is even harder to establish a comfort zone when all you have to look forward to is a quagmire of dwindling finances.

Before last week's devastating news, I had a plan for our income tax refunds. Our Federal refund was, without question, immediately directed to savings to help bolster our emergency funds. Most of the State refund was actually earmarked for closing out two smaller credit card balances with the remaining used to purchase some much needed supplies for the house but, of course, all of those purchases go back to the hold pile; that money has been re-directed to the survival pile. I try not to count my chickens and in fact my list which was remarkably mundane - things like a shower door, no problem we'll stick with the curtain and a door between the kitchen and un-heated sunroom where thermal curtains will remain, indefinitely - had the caveat "if chickens hatch." They, unfortunately did not.

I feel like I can't even dare to dream lest those "green shoots" be mowed down before they even have a chance to thrive. But, I do not want to be trapped in a downward spiral of negativity either. So, I gingerly hope for the best.

I thought accounting shenanigans were unsustainable

There is nothing like tax season to put things into perspective. I'm even madder than ever. So far, five financial institutions have shown 1st quarter 2009 profits due to hundreds of billions in bailout funds, government guaranteess for their bad assets, government guarantees for their bad loans, suspended mark to market rules allowing them to value the assets at a phantom price and a gullible electorate. I thought accounting shenanigans were unsustainable; I am very very wrong indeed.

The most egregious reporting came today when Bank of America claimed to have earned over $4,000,000,000 in 1st quarter profits, more profit than they made in the entire year of 2008, as if they did not recently receive over $25,000,000,000 in TARP funds and antoher $120,000,000,000 in loan guarantees. This is the biggest accounting b.s. heard around the world. How in the most bold face of lies can a bank show profits while being held afloat by the taxpayers. We are running with the mandate that some institutions are "too big to fail," and the bankers have moved beyond silently laughing at the gullible taxpayers to rubbing our faces in their government sanctioned ponzi-scheme-like balance sheets in broad daylight at our expense. What a life!

Thankfully, investors met Bank of America's outlandish claims with an even more resounding skepticism than I had anticipated so at least some people are paying attention. Instead we have fools throwing tea parties and protesting about taxation without representation as if George Bush didn't already spend their money while encouraging them to drink the fancy tea he made them believe they could afford. And now poor Obama in order to survive has surrended fully to the financial industry.

The general consensus that America's future depends on saving the financial sector was a battle cry of and by the entitled. Banks have an insatiable appetite for gains, ill-gotten or otherwise and they will take every penny the government has if it let's them.

NY Budget Bucks Fiscal Responsibility

Oh No! I have to reverse all of my glowing recommendations for Governor Paterson. I really thought that he was going to get things done and he has failed all of us New Yorkers. NY's 2009-2010 budget at $132,000,000,000 is $11,000,000,000 more than the current budget. How could this be possible in the face of the economic calamity that has befallen our state? How could Paterson abandon all of his impassioned pleas for fiscal discipline? What happened to making the hard choices now to ensure the future fiscal viability of the state?

Until last year, I did not know that Wall Street revenues contributed approximately $20,000,000,000 or 1/5th of the state budget. It is definitely certain that this level of contribution will not be attained again for quite some time. The new budget proposal includes approximately $6,000,000,000 in federal aid and another $7,000,000,000 in new fees and taxes. I am simply shocked that no provisions have been made to account for the upcoming shortfalls that are all but certain in the coming years. When our West Coast cousin, California, is on the verge of collapse and the Federal Government borrowing heavily to prop up the entire financial system, any rational human would expect some serious budget cuts. We cannot depend on the Federal Government to continue to provide aid at current levels.

Besides, with an approval rating of 26%, what did Paterson hope to gain by risking the ire of the wealthiest New Yorkers? Now don't get me wrong, those earning over $300,000 probably can afford to pay a few more taxes but when the budget does not contain any real effort to cut expenses, it does not seem fair. Fairness is always key in the tax equation. But then again, the wealthy folk and the rest of us don't count, do we? It seems that public employees and unions are the key to an election in New York State and without those unions, your star is all but faded.

Paterson's star has been faded for so long, how about going down a hero? It does not seem that there can be enough pandering for him to reverse his political fortune and be elected governor for an official term. Now, I don't think like most people but I would wager that a good budget would have been applauded by the rank and file; we would weather the cuts because we have to. Instead we will have to pay more to register our cars, renew our licenses, pay more for health insurance and property taxes, pay more for transportation and everything else.

My goodness, how much do the regular people of New York have to suffer and why do we have to pay so much while doing so? Will New York continue to be worth the hype? I guess it will so long as you have money, work for a union, or are simply flat out poor, you can stay. As long as the budget process remains broken, the legislature remains mired in political shenanigans and the power brokers reek what they sow, the rest of us in the middle class and the young people who don't see a viable economic future may truly have to leave; that does not bode well for the future viability of the state. And Long Island, Fuhgetaboutit!

Can We All Just Get a Tax Break?

I'm getting that middle class angst again and it is creeping up on my husband too. The feeling of never getting a break in this world, especially when it comes to taxation. Our tax returns are due a month from now and I am dreading the process as usual. There, I have admitted that I haven't started. At least I can stop wishing I worked for AIG since the House passed a bill to tax their tainted bonuses at a rate of 90% though 10% of $1,000,000 is still $100,000 which is pretty much all I need to set my world straight. I am at least willing to work for the money if someone would give me a job. It can be part-time, temporary, contract or whatever; I'd be happy for some work.

But, in the meantime, I will stew about the fact that I am not making any money and remain ineligible for unemployment. Alas my tax dollars are going to work to bailout the Wall Street rich and the Main Street poor, anyone who was fiscally irresponsible or simply cannot afford their share. I, on the other hand, am left to do the "right" thing; reduce my expenses. I am thankful that I was lucky enough not to have a privileged life so I can survive no matter how lean the times. Too bad, the state, the municipalities and the school districts have few plans to reduce their expenditures in any significant manner that would reduce my taxes.

The fact that the tax rolls and government spending have grown exponentially over the last decade remains off the table. State and municipal governments are attempting to hold the budget line at the current levels (and for this we are supposed to be grateful.) Long Islanders/New Yorkers have been screaming for years about the high tax rates so holding budgets at current levels is holding them at levels that are already too high.

School budgets are coming up on the block again but districts will make few changes this year because of the stimulus funds that the state received. What about next year? I just feel like they are delaying the inevitable. Before the stimulus funds arrived, the pressure was rising on lawmakers to make some serious cuts and the special interest groups were out in force, placing ads and commercials to gain public sympathy and protect their interests from cuts. Now that stimulus funds are arriving, the urgency has dissipated, unfortunately.

Local Governments and School Districts should start getting real right now before the crisis of next year. There won't be any extra funds next year. I am pretty sure. If the value of our assets and the state of the financial world is re-setting to the beginning of the decade so should all budgets adjust accordingly. It just makes sense.

We Didn't Start The Fire But We Still Have to Pay

The financial situation of most of the middle class here on Long Island is always foremost on my mind. I still have the same question that I had when I started this blog, how is everyone surviving? I thought I would have some insight by now but it is still a mystery to me.

Now we add to the mix the $15,400,000,000 budget gap, attributed largely to a decline in tax revenue from Wall Street, in the New York State budget that requires serious action on the Governor's part. In response, he proposed today serious cuts in school aid and health services, layoffs of state workers, an increase in many ordinary NY State fees, new taxes on just about every bit of entertainment that exists in the state and a repeal of certain tax exemptions especially the star (property tax) rebate.

Some of the Governor's proposed solutions will be painful for all of us; we don't want to have to pay more to renew our licenses and registrations or pay more to download a song on the internet. Most importantly, any cuts in aid means that the local taxpayer has to pick up the tab. More fees and taxes is the last thing that any New Yorker wants to hear right now. However, this is where fiscal reality meets us and indeed it is very unpleasant. We may not have started the fire but we certainly didn't push for fire prevention either.

Interestingly enough, the magnitude of the layoffs is very small, 521 out of some 200,000 state workers. This is an almost negligible layoff, speaking from one who has lived to tell the tale. Indeed the rollbacks on some employee benefits will meet the ire of many especially when the career veterans have already been grand-fathered into much better benefits than the new hires. As every special interest starts screaming bloody murder from the mountaintops this week, we will see what kind of backbone state legislators have when they sit down to vote on all of this.

The State of New York

Probably the most disturbing statistic I read about this weekend is the extent to which New York State depends on Wall Street. Apparently, 20% of state revenue is garnered from the taxes on bonuses paid to investment bankers and capital gains (source: Newsday). Now I knew it was a significant amount but 1/5 of the budget is alot. New York State has a budget of $120,000,000,000 a year. Of course with the decimation of most of the major financial firms continuing to escalate, Citigroup announced layoffs of 50,000 workers today, it is not hard to predict that this stream of revenue will be significantly reduced. 50% is the amount currently anticipated or approximately $12,000,000,000 less. The State is on track to have a $1,500,000,000 deficit this year and a $12,500,000,000 deficit next year.

This past July, Governor Patterson sounded the early alarm and hauled the Legislature in to address an additional $600,000,000 in budget cuts to cover the then-anticipated budget shortfall for this year and at the time projected a deficit of nearly $6,000,000,000 for next year. As we can see, these numbers have more than doubled since July so tomorrow the Legislature is being hauled back in again to address the spiraling budget deficit. From the top - corporations and governments - to the bottom - individuals, we are all saddled with decreasing income/revenue and higher debt. 

Unfortunately, instead of trying to come up with solutions, the advance notice is of Legislators bickering about programs that they do not want to touch, funds for education, healthcare, adminstration, pensions and themselves. Yes, it will be difficult to cut funds for all of these programs, New York spends nearly half of its budget, $59,000,000,000 for public health care costs, Medicare, Medicaid and Child Health Plus, alone. 

These funds represent the neediest cases but for all of those people who are losing their jobs, the projection is over 160,000 jobs across the state this year, the prospect of a majority of those persons paying into COBRA; extending their employer-based healthcare beyond a layoff is slim. Cobra costs are daunting. I have done it. It cost us $1200 a month to COBRA our healthcare costs a few years ago when we decided to go into business for ourselves. Most people will not be able to afford COBRA so that will be more people on the public health rolls. How do you cut the budget here? The other major area is education. None of the Legislators want to cut those funds either; New York State funding helps to keep my school taxes at an unrespectable $7,000 a year. Long Island school taxes are legendary, most of us are hanging by a thread, we couldn't survive a hike in taxes if the state cuts aid. 

So if not, health and education, then where? You have try to cut people but NY State is a union state. The teachers union is 600,000 strong then there is the Civil Service union with 300,000 members and police and transit and service employees and healthcare employees adding tens of thousands more; all the heavy-hitters with generous pensions, healthcare benefits and salary to boot. All of the Legislators owe some allegiance to one or the other of these unions so who will have the balls to cut them? Look, the Congress is arguing over saving GM for precisely the same reason; huge legacy costs will probably crimp its ability to become self-sustaining even if it does come up with the car of the future.

There is no good solution to the state's budget crisis but someone has to pay because there is no more money; most economists have now agreed that we will suffer a deep and protracted recession. So far Governor Patterson has been effective in keeping everything on the table. Instead of bellyaching and intractability, our Legislators should attempt to come up with some budget-reducing ideas that they could swallow; like it or not, we all have to do it.

Membership has its Privileges

One of the perks of being elected to a public office is the contacts that you make and the favors that you maneuver around the law for untold future benefit. The benefit of serving the public is the shoe-in job that you get after you leave office. 4 days after leaving the state senate, after resigning from senate leadership and bowing out of his unfinished term, the 79 year old former republican State Senator Joe Bruno becomes CEO of a consulting firm, CMA Consulting. This firm has had ties to State government since it was founded in 1984 with the wife of a republican state senator as principal; a senator that Bruno appointed to the powerful finance committee early in his career. The State favors woman owned businesses when awarding contracts and this company will retain this status by shuffling said wife to a “title-ful” position while Bruno is CEO.

The company has 66 active contracts with more than 20 state agencies according to the Albany Business Review. So, a month ago, when Joe was talking about moving on with his life this is what he was talking about. Why would anyone leave the most powerful Republican job in NY State to take up as CEO of a $42 million a year computer software development company, even if it is the Albany region’s largest company in its field? It all seems fishy to me but that boat has already sailed. No one seems phased by the fact that this company has had the inside track since it was founded. Now it is comfortably surviving on state contracts for its revenue.

Oh why do I not have any good connections? It is perfectly acceptable for politically connected people to form companies or work for companies that make their revenue precisely because of those connections. So shall the world continue to turn much to the detriment of the rest of us poor, unconnected fools.

Oh Happy Day?

2 Days. 483 points. Today Investors were skipping down Wall Street whistling. The market is up over 200 points singing “doowah diddy diddy…” Thankfully, they will remember none of this in the morning when they face down the reality of Merrill Lynch’s, Google’s and Microsoft’s numbers. Alas, I can’t seem to turn away from the current financial drama, such a scintillating tale of economic woe unfolding at the pace of a John Grisham novel, a real page turner. Now, if we pile on new developments occurring in my other favorite topic, public sector benefits and taxation, then we truly have a most entertaining day. Today I read that there is a real prospect of Governor Paterson signing a new round of bills to boost, yes boost, the already outrageous benefits of fire and police officers.

This from the editorial section of today’s Newsday;

“The bills would prohibit the reduction of state retiree health benefits; lift limits on disability pensions for fire and police officers who suffer heart attacks off-duty; and allow fire or police officers to join the other force after retiring, making them eligible for two full pensions…”

Am I reading this correctly? I thought we had a fight on in Albany to reduce taxes in NY State and these types of bills do just the opposite. What will happen to our taxes in the future when these pension checks come due? Our legislators found the time to send these types of bills to the Governor when we are mired in economic uncertainty. Once again, I shake my head.

The editorial urges Governor Patterson to veto the greed because “pension costs are busting government budgets and burdening private-sector workers whose benefits are far less generous.” Took the words right out of my mouth. There is a real concern that Paterson may support the bill because not only is the Governor a huge friend of big labor but his father, Basil Paterson, is a bigger friend of labor; his law firm is a lobbyist for public sector labor unions. Connections have an awful way of connecting the powerful to something that stinks. Let’s hope that rationality prevails.

Long Island's Economic Future is at Stake

Everywhere I look these days, the call for change is being made loud and clear on Long Island.

“Long Islanders have to make some pretty difficult decisions soon about how we will tax ourselves for the government services we receive. It will take backbone because elected leaders traditionally lead only when they have a public to follow them. So we can’t dawdle, since the region is running out of time. Long Island is aging rapidly, and the next 17 years will bring demographic changes that, if unchecked, will dramatically impact the regional workforce, and possibly the economic sustainability of the regional economy.”

Quote from Martin Cantor, director of the Long Island Economic and Social Policy Institute at Dowling College writing in the Long Island Business News, June 27, 2008.

“Findings confirm that Long Island’s economic engine is no longer turning out the same number of high-paying jobs as it has in previous decades. According to Nancy Rauch Douzinas, President of the Rauch Foundation, “Long Island needs new business to grow. New businesses need workers. Workers need affordable housing options. Economic growth and affordable housing are, by necessity, linked. We are not going to have one without the other.”

Quote from The Long Island Index 2008 report, a project spearheaded by Nancy Douzinas, president of the Rauch Foundation that publishes important economic data on the Long Island region.

The Index further reports “the willingness of Long Islanders to live, work, and shop in downtown locations. Solid majorities support inclusionary housing as well as increased density and more rental apartments in downtown areas.”

New organizations are forming and old ones are re-surging in an effort to get more citizens involved in the fight to reduce property taxes. Nassau County Executive Tom Suozzi’s commission has sent its report to Albany recommending a 4% cap on school budget increases in effort to rein in spending. It is not a perfect proposal but it is a start.

We live in our provincial worlds talking amongst ourselves but not enough of us are forming a Island-wide public effort to actually get something done. Most of us are so busy trying to survive our suburban world that several decades have already past without any real changes to the current system making it hard for most Long Islanders to accept that this time the warnings are real.

Martin Cantor wrapped up his article "let’s stop the foolishness and demand real solutions." I agree.

Let Go and Let Capitalism; mega-malls abound on Long Island

It is nice to see that Long island is adding more mega-malls to its portfolio. Having traveled out to Riverhead many times this week, I have passed the ‘old’ Tanger Outlet many times. One only has to continue east on Old Country Rd (Rt. 58) to see both sides lined with brand new big box malls. Recently, my husband passed by the ‘new’ Tanger mall construction site in Deer Park and he was astounded at the size. Also, after 7 years of battling the Town of Oyster Bay to build a new 860,000 sq. ft. mall in Syosset, the courts have upheld Taubman Centers Inc. rights to build, but at a more ‘modest’ size of 750,000 sq. ft. In my travails, I have seen a brand new shopping center on Horse Block Road (Rte 16) in Medford that is empty except for one lonely store. And, a brand new shopping center on Carleton Ave (Rte. 17) in Central Islip awaiting smaller tenants to round out the new big-box stores.

Every time I see new shopping malls, the amount of vacancy signs in the older malls, especially strip-malls always worries me, a little. Do we really need any more shops? Even though it sometimes appears to me that the existing square footage for shopping is adequate for current growth. As in, tenants are simply moving from the old to the new without really expanding the industry. I hold my tongue, because building and construction is good for the economy. It creates many jobs and gives us the aura of growth and modernity, vibrancy and expansion, not to mention the amount of dollars added to the tax rolls. What community wouldn’t want that? Especially since 2/3 of the U.S. Economy is driven by consumer spending, we have got to keep them shopping. Again, I hold my tongue because I’ve been too overly concerned that much of that spending has been financed by debt.

My problem is that I expect forethought and planning with an element of realism, a notion that capitalism should be rational in all of its components but it isn’t. “If we build it, they will come” always prevails and in many cases it usually is true. They don’t mention the part about abandoning what was there before, here I go again. Experts say let the market suffer “bubbles” and “irrational exuberances” because it will all correct in time and soon there will be enough people with enough money to shop and shop and shop, so let it happen. Personally, I think if we built more affordable housing, for workers, college grads, starter families and the like, that would create a much larger base of shoppers. No. Stop. Cease and desist. Let Go and Let Capitalism.

"Crookhaven" is Alive and Well

As I was catching up on reading my community newspapers today, many things struck me as appalling but the most egregious were the ongoing shenanigans of the Brookhaven Town government. It is absolutely shameful how ordinary citizens, when elected to office, suddenly lose sight of their moral compass and raid the public trust with complete impunity. For the last few months the esteemed councilpersons of Brookhaven Town have been squabbling over the best approach to reduce the Town vehicle fleet. Each political party wants credit for the right plan to save the taxpayers money especially since the Town faces a shortfall due to the decline in mortgage tax revenue.

Brookhaven Town has about 600 vehicles in the Town Fleet. How did the Town come to have so many in the first place? Are there really 600 people working for Brookhaven Town who need vehicles for Town Business? Not to mention that all of these vehicles have access to free gas at the Town gasoline pumps 24/07. Yes, while the rest of us are suffering from high gas prices, hundreds of Brookhaven Town officials and employees get a free car and free gas to drive to work courtesy of their struggling taxpayers. Furthermore, not one of the proposals to reduce the fleet adds up to a significant reduction. After all the years of squandering taxpayer dollars for which they now want to take credit for saving, how about starting with half the fleet being reduced immediately. Figure it out. If you can’t, bring in a citizen committee to do it, I’m sure they won’t find it too difficult.

Unions must help ease tax burden

The people who benefit most on Long Island are government officials & employees, school officials and teachers, and police officers. What do all of these people have in common? These are all positions that are supposed to serve the public good. Yet, these are now the highest paid people on average in Long Island. Yes the average private sector wages are now dwarfed by the average wages of all of these professions. In addition, public sector personnel are guaranteed cost of living increases and generous benefits regardless of the tax burden on the residents. Why? because these personnel are members of powerful unions whose political clout is legendary. No politician is willing to risk political suicide by treading on the “rights” of the unions.

Human resources – wages and benefits – are 60-70% of an organization’s operating expense be it a major corporation, government or quasi-government agency. We routinely hear of private enterprises cutting costs through attrition and as a last resort, layoffs. Yet, public agencies cannot effectively reduce their budgets (which in turn would reduce taxes) because they can never touch the most expensive part of the budget, union-protected wages and benefits. What’s left is cutting costs through the reduction of services, services that are very often popular and/or vital like when a school district threatens to cut art, music or sports. These savings of course are miniscule and can never offset the annual wage increases and perks stipulated by the unions. Yes, the unions are doing their job by protecting the wages and benefits of their members. However, it cannot be that those wages and benefits become a tax burden to the very people they are supposed to serve. The purpose of the union was to equalize the earnings of their public sector members in light of what they would be earning in the private sector, not to have earnings that are above and beyond the call of duty, literally.

The fact is we have to cut taxes. We have to think smart about how we are going to rein in these costs. Our elected officials must appeal to the unions to come to their senses for the public good by starting with some reasonable fixes. One is to have public sector workers contribute a greater portion of their health and retirement benefits just like those workers in the private sector. Every one from top to bottom with no grand-fathering could pay a percentage. If everyone active and retired paid a small percentage that would return millions to the public coffer for all to benefit – not some. Another painless solution is for unions to give greater leeway to public agencies to reduce personnel through attrition instead of demanding that those jobs remain on the books. We have to start somewhere.

Property Tax Grievance

Last week my husband and I were lucky enough to file a grievance with the Town Assessor to reduce our property taxes. We had received a deluge of mail from many law firms and agencies offering to file on our behalf. In return the typical fee is 50% of your 1st year tax savings plus any appraisal fees if required. Of course, if your taxes are not reduced then you pay nothing. It is a win-win situation since you have nothing to lose and everything to gain. My husband thought it was a great idea and that we should sign up with one of these firms. I figured that I should research the matter and do it myself since that’s the type of person I am. Somehow, I had the date of May 20, 2008 in my head. It was the deadline stated on all of these offers. On May 19, I finally got around to my research only to find that May 20, 2008 was the absolute deadline for filing with my Town and that the grievance period began on May 1st. Great! I had no choice but to show up the next day and take my chances with the process.

I arrived in the rain with great trepidation because I was unprepared. Also, because it was the last day, I had no chance to fix any issues that may arise. I was pleasantly surprised. For all of the typical complaining about government employees, those at my Town Assessor’s office were stellar. Though the line got long at times, they patiently helped everyone along who needed it. If you couldn’t grasp the computer, if you couldn’t fill out the application, if you couldn’t grasp one single iota of the process, it did not matter. The Assessor’s office helped you with everything. It was incredible. Even when the waiting line for the computers got too long, residents were led to the back office to use the employees’ personal computers.

Luckily, I found the process to be simple. First, you are given an application and led to a computer to look up your address to get your tax id# (if you didn’t bring your tax statement with you) and your assessed valuation. The assessed valuation is the multiplier used to calculate the dollar amount of taxes owed. Using the valuation, the
assessed value (the current market value as deemed by the Assessor) of your property is calculated. I couldn’t believe the amount that my house was assessed, close to $100,000 more than I thought is was worth. This was a good sign that I might have a case. In my town, you also received a list of all the sales of homes in your zip code during the past year. It was your job to find 3 comps, 3 homes as similar to yours as you can find in your neighborhood that sold for less than the amount your home is currently valued by the Town Assessor. The same process an appraiser uses to qualify the value of your home. You were given the opportunity to use the computer again to verify the 3 homes you had chosen to get additional details to complete the application. You could also attach a recent copy of an appraisal if you had one. The final step was for you to value your home based on the comps that you picked and that was it.

Your application then goes to the Assessment Review Board for approval. I was concerned that some of the comps that I picked had higher assessed valuations than my house. However, the state of New York sets the rules for property tax grievance. Only the current market value of your home and other homes in the area can be used to determine if your house is overvalued. I hope that I am approved for this year. It will be a great help. If not, I will definitely try again next year. I couldn’t believe that there were so many firms and agencies making so much money for a process that was so simple, at least in my town.

Suffolk County Police Overpaid?

Steve Levy, Suffolk County Executive, published an editorial in The Smithtown News on May 8, 2008 in response to the Suffolk County Police union (PBA) propaganda that the County was placing the public in jeopardy by understaffing the police department. In this letter he put in the specifics of what Suffolk County police officers earn.

“It costs the county an average of $144,000 in wages and benefits (not including overtime and up to 12 percent in night differential pay) to place a single police officer on the street.

Police Officers get up to 89 paid days off a year, including five personal days, 26 sick days, up to 30 vacation days and 28 chart days. These paid days off do not include the 13 holidays.

The law enforcement contracts allow some individuals to collect up to $300,000 in unused sick, vacation days and other paid time upon their retirement.”

These numbers are outrageous. I know police officers have a tough job but these are suburban police officers, they are not working in a major city. Levy states that the PBA union has been getting its way in negotiations for decades and that these generous contracts have “made us one of the highest taxed regions in the nation. It is my intent to put a stop to these [contract] giveaways that have been crippling our local economy and forcing so many of our families off of Long Island.”

The PBA has run amok with its demands and claims. I certainly do not feel like the police department is understaffed. Everywhere I go I see plenty of Suffolk County police vehicles. Every time I pass a traffic accident these days, there are at least six to eight police cars responding and blocking the road. We cannot let unions like the police, teachers’ and others continue to gouge the public purse.

School Budget Increases Approved without a Fight

How is it possible that the majority of school budgets with increases of 4% and above were passed when the price of gas, heating oil and food have risen so sharply? How could anyone vote to increase taxes on top of the increases of everything else? Last year school budget increases were resoundingly defeated. Now with the economy on the verge of recession, we don’t put up a fight. The only people who win here are the teachers and administrators. They get their cost of living increases and continued stellar benefits while those in the private sector contend with stagnant wages and eroding benefits. Why are we so helpless when it comes to the school budget? Everyone wants the best teachers and educational experience for their children. But should it come at such a high price?

In Suffolk County the average teacher pay is close to $70,000. I don't know if people do the math but that is for 10 months work and I know I'm being generous about the actual time worked considering the myriad of school vacations. Based on a 12 month scale that amount would be the equivalent of $84,000 a year not to mention the generous benefits and pensions. Years ago teachers were dedicated to the education of our young people and did so for low wages as did most who worked in the public sector. In return for their dedication and the apparent economic sacrifice of giving up a more lucrative private sector job, they received lifetime benefits and pensions. Now the tables are upside down. Not only are they are making much more than the average private sector worker, they are still getting the lifetime benefits and pensions. The teachers union claims that these wages are necessary to attract good teachers. Now we pay so much more in taxes than the rest of the country so our children can supposedly get a better education which is now making the tax burden so high that these same children can’t afford to live here once they graduate. This does not make any sense.

Long Island was a middle class haven where for decades those with decent employment could live and raise their families in a comfortable existence. Now the average middle class family struggles to have a lifestyle they can no longer afford, where they live in homes that they couldn’t afford if they were to purchase them today and where their children graduate from college and return to the family home to take up residence in the basement because they can’t afford any other place to live. In the public sector, there is no incentive to trim costs, check the bottom line or boost productivity when you can just keep raising taxes.

Public Sector Payrolls Getting too High?

The following excerpt is from the Newport News, Va., Daily Press reprinted in Newsday May 13, 2008:

Local government employees should tighten their belts, too
Once upon a time, government employees traded high salaries for job security, time off, and better health insurance and pensions. Now, they have it all, earning more on average than private-sector workers and getting regular raises, while workers in private enterprise have seen their earnings lag behind inflation.

Some local officials get their obligations confused, and dwell too much on preserving the jobs and salaries of local employees. Certainly, attracting and inspiring good public servants is vital, but the job of elected representatives is to deliver the best services at a price taxpayers are willing and able to pay. When elected officials put employees' interests before taxpayers' interests, payroll costs can push budgets — and taxes — so high they drive away the businesses and middle-class workers who provide the lifeblood of a locality's economy and work force.

That's the kind of thinking that threw Vallejo, Calif., into bankruptcy last week, the kind of thinking that it took New York City years, and massive bailouts, to recover from. It's the kind of thinking that's burdening taxpayers in many localities with excessive bills for payroll and benefits.

Government employees must be treated with fairness and respect. But their needs must be balanced with the larger mission of government, which is to provide needed services without breaking the taxpayers' financial backs.

This article makes many good points. And, if you don’t think this applies to Long Island, here is the data for Long Island from 2005:

The following excerpt is from a research bulletin by the Empire Center for New York State Policy 9/1/06

Average Annual Salary in 2005
New York State & Local Government v. Private Sector
Region	State Government	Local Government	State & Local Government	Private Sector
Long Island	$49,354.00	$52,682.00	$52,256.00	$43,161.00
Nassau	$52,567.00	$55,335.00	$55,194.00	$44,449.00
Suffolk	$48,652.00	$50,118.00	$49,837.00	$41,846.00

and the following conclusions:

• The region with the greatest differential between public and private salaries is the Mohawk Valley, where state and local government jobs pay 124 percent more than private-sector jobs, on average. The runner-up in this category is Long Island, where the average state-local salary is 121 percent of the average private-sector salary.
• The highest-paying local government jobs in New York State are found in New York City, Long Island and the lower Hudson Valley.

This is absolutely unsustainable for the rest of us in the private sector to bear. These public sector employees get job security, cost of living increases, generous sick and vacation days, generous health insurance benefits and in some cases vehicles, gas and cell phones. Not to mention the mother of all bonuses, pensions with lifetime benefits. We hear the same justification for their high salaries and benefits - how can they continue to provide these vital community services if they cannot afford to live on Long Island? If we continue to accept this argument, we in the private sector definitely won’t be able to afford to live on Long Island either.