Thursday, January 22, 2009

NY City - NY State Rivalry Escalates to All Out War in Face of Apocalypse

New York Mayor Mike Bloomberg testified before the state assembly ways and means committee about what the proposed NY State budget would mean for NYC. In a nutshell, NYC is on the verge of 1970's Taxi Driver status. Mike is cementing his 3rd term with such soundbites as "Economic conditions have deteriorated beyond what anyone anticipated."

Some entertainment: the squabbling between City and State (Bloomberg v Patterson sounds more appealing) is escalating to fever pitch: "[The New York State] budget includes some smart proposals - but unfortunately, it also contains serious flaws. In too many instances, it uses the fiscal crisis as an excuse to shift State expenses to New York's localities - in many cases, permanently. All localities are being asked to take a bitter pill; New York City is being asked to swallow an entire bottle", and "[a pressing item in the State budget] is the Governor's disappointing proposal to exclude New York City - and only New York City - from State revenue-sharing." (much more in the report)

Bottom line of what the current environment will imply for NY residents: "Higher City taxes and also thousands of fewer cops, firefighters, and teachers - all compounding the local effects of the recession. And in the long run, it would make it that much harder for the City's financial services industry to rebuild itself. Make no mistake about it: Raising taxes on those with the flexibility to move their businesses - as was done in previous crises - will lead to an exodus that will hurt us for decades and have devastating consequences for the entire state."

Next item of focus in our opinion: the New York City pension fund. Last time we checked it was down about 50% year over year. Who will be the gutsy one to break the sad new to all the retired NY workers that their pensions are about to be eliminated due to lack of funding. Sphere: Related Content
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