In many ways our current budget crisis, a crisis that seems to deepen by the hour, was always going to necessitate at least a modest increase in the income tax rate at the very top. There just isn't any way to close the gap without asking the New Yorkers who can most afford to pay, the same ones who have benefited most over the last decade or so while seeing their real tax liabilities decline, to endure a slight increase in their state income tax burden. Now, it looks as if that reality is finally taking root in Albany.
Democratic leaders in the State Senate will seek income tax increases on at least some affluent New Yorkers and a sales tax increase of a quarter of 1 percent to help balance the state budget, a Senate official with knowledge of the plans said in an interview over the weekend.
"The hole is too deep to dig ourselves out by cuts alone," said the Senate official, speaking on the condition of anonymity because the details of the proposal were still being hammered out. "The debate now is over where to start."
The move by Senate Democrats, who have a slim majority, will significantly increase pressure on Gov. David A. Paterson, who has said he would consider raising income taxes only as a last resort and only after the Legislature had agreed to steep cuts in state spending.
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The Senate official said discussion within the leadership had moved in recent days from whether such a tax was needed to what contours it would take.
Among the questions were the income level at which it would kick in, the amount of the tax and whether it would include a sunset provision.
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"It's better to tax the rich than crucify the poor," said Dan Cantor, executive director of the Working Families Party, a union-backed group that has lobbied aggressively for higher taxes on the wealthy to help close the state's $14 billion budget gap.
"The Senate is signaling that it needs to balance the budget in a balanced way, meaning smart cuts and fair taxes," Mr. Cantor said.
And while this move was in many ways always inevitable, the Working Families Party has helped greatly to bring it about by creating the space necessary to allow lawmakers to pull the trigger. As Crain's points out, their "outside game", as I like to call it, was key and it should be considered another rather large notch in their belt. It indeed was "textbook".
New York's chattering classes are no longer debating whether state income taxes will be jacked up on high earners. Now the only question is by how much. And the credit-or blame-for successfully framing the debate goes largely to a minor political party that's starting to have a major impact on state government.
The left-leaning Working Families Party has orchestrated a tax-reform campaign straight from the textbook of retail politics. Last week, it staged eight simultaneous rallies that drew nearly 100,000 people statewide, including 50,000 at City Hall. It has knocked on 42,000 doors, generating 7,000 handwritten letters to lawmakers. Radio advertisements saturate the airwaves in Albany. Its YouTube video "highlighting how easy the state's tax system is on millionaires," as a party spokesman put it, is being watched a thousand times a day.
"It certainly has made a difference," says Assemblyman Jonathan Bing, D-Manhattan, pointing to identical bills in the Assembly and Senate that would raise rates on people with adjusted gross incomes above $250,000.
It is not just the advocacy campaign, Mr. Bing says, but the Working Families Party's ability to oust incumbents that grabs legislators' attention. Indeed, the party campaigned relentlessly for months before last November's elections to evict state Senate veterans Serf Maltese and Caesar Trunzo, resulting in the Democratic takeover of the chamber. That, in turn, has made the tax increase achievable.
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"We haven't won anything yet, but I feel like we're winning the debate," says Mr. Cantor, who has run the party since its creation.
State Sen. Eric Schneiderman, D-Manhattan, who is carrying the bill in the Senate, says: "They've been moving public opinion. And they have been effectively reaching out to those of us in the Legislature to encourage us-to show that not only is this the right thing to do, it's the politically popular thing to do."
The opposition has been meek by comparison. A conservative political action committee, New Yorkers for Growth, started an online petition, and the Real Estate Board of New York put together a group called Taxpayers for an Affordable New York, which includes the Business Council of New York State. The latter group sent a mailing to 125,000 high-earning households and launched a Web site that has generated 1,000 e-mail messages to legislators.
And take note of a key part of WFP's campaign, something they haven't done much of in the past. They are finally using using new media tools to augment their already impressive ground game, and doing so with great success. The video mentioned above was a huge hit and the Fair Share Tax Reform site has been very, very successful.
The Fair Share site, meanwhile, has generated 25,000 e-mails in addition to arranging the rallies, letters, commercials and personal meetings with lawmakers.
"They have a system, a very powerful system, for raising money and taking over the airwaves," says Kenneth Adams, president of the business council. "Millions of average New Yorkers across the state don't have those systems-and frankly, neither does the business community-to mobilize to oppose this."
Mr. Schneiderman says the Fair Share campaign has tapped into the growing public sentiment that "the redistribution of wealth to the wealthy went too far." But Mr. McMahon says the Working Families Party and its allies have used "class warfare" to "create the illusion of a mass movement."
Here's what Mr. McMahon does not get: That video cost next to nothing to produce and was distributed for free via YouTube, not by "taking over the airwaves". It was spread virally (it was a big hit on twitter, for example) by folks sympathetic to its undeniable message. Anyone of those supposed "millions of average New Yorkers" could have done the same. They didn't.
It's also rather insulting to the 100,000 or so folks who rallied from one of the state to the other to refer to their movement as an "illusion". As for the "class warfare" swipe, one of the things that makes WFP's video so potent and poignant is that it very simply and effectively illustrates that there has indeed been class warfare engaged in for the last few decades. Guess who has been winning? It's certainly not those "millions of average New Yorkers". This is obvious to everyone when they learn that they pay their state income taxes at the same rate as Donald Trump and Bernie Madoff.
The big takeaway for me is that WFP's game is getting stronger by their embrace of these new tools. Now, they haven't abandoned the "inside game" by any stretch. Trust me, I'm sure they are bringing the heat to lawmakers personally as well. But, they've added new tools to further increase the effectiveness of their outside game. If they can fully integrate an effective new media communications strategy with their already formidable ground game, watch out. This may be but the first example of an even more robust combined effort on their part. |
