How WNY's tax politics miss the future

If the New York State legislature doesn’t re-authorize the 1.75 percent “extra” sales tax, then Erie County government, the three cities, the 25 towns, and the 29 school districts in this county will be short a couple of hundred million dollars. Discussions are underway about whether state elected officials should just rubber-stamp County Executive Chris Collins’s request to keep the sales tax going without any further ado or whether Assembly Democrats and Republicans should do to Collins what they did to his predecessor and make approval of this revenue conditional on Collins and the Erie County Legislature, dedicating some of the sales tax for some specific purposes.

In 2006, when Joel Giambra wanted the sales tax reauthorized, state legislators commanded him to “share” $12.5 million with town governments. Nowadays, the supporters of cash-starved libraries and cultural organizations are nudging state leaders to do a version of that same command. Albany should tell Erie County to take, say, the last quarter-percent of sales tax revenue—which will be about $36 million next year—and create a fund for regional assets whose budgets Collins has slashed but that lived before his tenure and need to live after he leaves. The Buffalo area’s libraries and culturals, under both Dennis Gorski and Joel Giambra, used to get about $31 million in County revenue. This year, Collins budgeted them both at a total figure of under $25 million, thus wiping out funding for dozens of theaters, dance troupes and other small organizations entirely, notwithstanding evidence that County cultural spending of $6 million leveraged more than $240 million of economic activity. Collins slashed culturals and libraries after he politicized the previously sacrosanct Erie County Cultural Resources Advisory Board. Advocates of the culturals are scrambling to plug the $2 million hole. Librarians, meanwhile, are circulating their resumes anywhere but here. A library board member has rather queasily inquired whether the board may have any legal recourse to the 20 percent cut libraries have already sustained and expect to recur.

Sales tax receipts grow at about three percent a year, so dedicating some of the sales tax to keep libraries, culturals and, say, parks, funded within historic budget parameters, would be an act of sensible stewardship. Faced with a county leader who will destroy the community’s inherited assets in order to save his own job, maybe the sales tax discussion will go somewhere among his potential challengers.

But there’s hesitation. “Culturals don’t poll well,” said one elected official at a recent coffee klatsch. “Collins might just wipe them out entirely this coming year,” said another. The discussion went on: “Anything Albany makes Collins do will give him an excuse to spend $500,000 on TV ads complaining about more Albany mandates,” was the rejoinder. “But if Albany does nothing, even the Albright-Knox, the Philharmonic, and the big culturals might get zeroed out,” said a person who knows Collins’s thinking.

More on the dithering later. This little drama is about a big question in a democracy: Do local voters, who get to answer the question of how they want to shape their collective future, actually want to do so any more? Voter turnoff was so high in the special election held last week in Rochester that three out of four voters stayed home. A populist, pro-regionalism former mayor with broad labor support got 10,000 votes; a former corporate lawyer who took a $10 million golden parachute from the utility company he ran got 12,000 votes. The Green Party candidate got 2,000 votes. Democrats were the overwhelming majority of participants; a plurality of them chose the corporatist over the populist, and the progressives splintered.

A shared future?

Don’t blame the Rochester weather for the low turnout. Yes, turnout in the frosty March special election was only 25 percent. But the last time Buffalo held a race for mayor, in sunny September 2009, only 24 percent of eligible voters bothered. By contrast, Barack Obama versus John McCain in 2008 brought 80 percent of eligible voters out.

Will that happen again? Perhaps. But enthusiasm for Obama waned considerably in the 2010 midterm elections, as evidenced by the number of Democrats who got, in Obama’s word, “shellacked.” Even in the hotly theatrical race for governor last year, with provocative Carl Paladino stirring interest in his home county, turnout here was only 54 percent. Without a very strong, definitive candidacy that is all about hope and uplift and transformation—if folks have not soured on those notions—voters, especially at the local level, voters act more like money-grubbing dwarves than like noble Nibelungs.

So when a pallid, tepid, squeamish Democratic candidate runs for Erie County Executive in 2011, the folks who came out of their hidey-holes to vote in 2008 probably can’t be counted on doing so in a race that is actually going to decide the community’s quality of life for years and years to come.

That leaves policy-makers with a choice: Given that no candidate for Erie County Executive is going to boldly commit to funding the libraries, culturals, and other community assets, should Albany exercise its power to command a local elected official to do so? Albany was there in 2006 to spank Joel Giambra and hand out extra county sales tax revenues for the town governments that thwart regional cohesion: Will Albany be there in 2011 to protect a dispirited, leaderless community from an Alberich?

Meanwhile, up north

Last week, the Conservative Party mayor of Toronto joined with the Liberal Party premiere of Ontario to announce an eight-year, multibillion-loonie plan to build a 15-mile-long crosstown subway that will connect Toronto’s east and west sides through the middle of the city. Folks who dream of a streetcar-enabled renaissance in greater Buffalo, listen up: There are new streetcars coming to Hamilton, too. It’s true that the population in Greater Toronto has been growing and will continue to grow, per official estimates, as immigrants flock in and babies get made. The subway is an acknowledgement that they need to cope with traffic congestion that already leaves some Toronto workers and students with oppressive commutes. Visitors looking for Little Italy or the cluster of Portuguese restaurants and bakeries on the west side of town are best advised not to drive or take a trolley at rush hour. But at every other time of day, the combination of subways, trolleys, electric buses, cars, and bikes works without delay. The crosstown subway is all about the future, but it’s also about a continuity of vision about how a city should work. Toronto was either too smart or too poor a few decades ago when it had a chance to do what Buffalo did, which was to rip up its streetcars and replace them with buses. Now those streetcars are one of several transportation options, and even the Conservatives salute the idea of adding to them.

The new consensus about the subway is a bow to Toronto’s new reality: It is, in the words of two scholars from the Wharton School, a “superstar city,” which is how they describe big, rich cities that keep getting bigger and richer. Some rents are indeed high in Toronto; in some neighborhoods, modest 2000 square-foot bungalows that look like 1950s Tonawanda or West Seneca go for $700,000, though there is still a lot of immigrant-friendly, cheap, kinda un-pretty housing right next door downtown. Density is by design: The skyline is crowded with construction cranes as even more condos and apartments are being built. In-migration is regional as well as global, as several of the less-attractive cities and regions of northern Ontario are losing out to the allure of the biggest, most polyglot and most sophisticated place between New York and Montreal—or, as Toronto folks are wont to think, between New York and the Arctic Circle.

Public policy guides this change: Toronto’s success was not inevitable, any more than Buffalo’s decline was. In Toronto today, there may be vigorous discussion of options on how to fund things like subways, and indeed, everything is on the table: fare increases, property taxes, sales taxes, public bonds, and private investments, too. What is striking is that there is a baseline consensus: Everybody gets it about the need for public investment. The question is not whether there should be public services, including publicly-funded healthcare—the question is about how to make it better.

So it’s beyond funny that American conservatives point to Canada these days. The Right has recently started a campaign to lower the US corporate tax rate to Canada’s 15 percent level, citing Canada as the model (Canada should be newsworthy because a Canadian general is now running the NATO campaign in Libya, or because Canadians are in the second week of their six-week national campaign to choose a new prime minister, but nobody here cares about that stuff). What American conservatives don’t ever mention is that the pro-business, pro-growth Canadians pay a top personal income tax rate of 48 percent compared to 35 percent in the USA, and that 48 percent rate kicks in at about $80,000 of income. Nobody in Toronto gets to deduct mortgage interest on their taxes, either. And there are both provincial and national taxes on consumption that ding you for 15 percent on most purchases.

Back home in New York State, we in 2011 will walk into our local and regional elections with a tepid, squeamish and no-longer-inspiring leader of the American public realm setting the tone for our public choice-making. Our consensus about taxes and public investment is decidedly different than in Toronto, to be sure, but it’s even different than it was barely two years ago.

While Democrats split ever farther from labor and from economic populism, the result is that Democrats and Republicans today have a new anti-public consensus. Both Democrats and Republicans ignore the colossal increases in income for people who take their income from capital gains rather than from wages or salaries. Democrats and Republicans alike sound like they agree with the idea that public spending of any kind is all downside and no upside. President Obama, Governor Cuomo, and indeed any elected officials other than Vermont Senator Bernie Sanders and Ohio Congressman Dennis Kucinich evidently believe that asking high-income individuals to foot part of the bill for public services, infrastructure, transit, culture, libraries, or healthcare will hurt the public interest.

So I am inclined not to wait for a brave, well funded, articulate woman or man to buck the Obama example and emerge as a candidate for Greater Buffalo’s future, because there is neither a statewide nor a national discourse about how community uplift, cultural advancement, scientific innovation, and social peace can be supported and directed by sensible, evidence-based, long-term planning and public investment. We are not Toronto. We are not Ontario. Erie County voters, what few of them bother to turn out, apparently cannot produce a candidate for public office who will stand for what so many customers of culturals, so many community gardeners, so many library constituents and parks users want—someone who will boldly advocate for public support.

Thus it’s a good thing that we have a multi-level government, and specifically, a federal system. Our federal system guarantees that when local thugs and dimwits undermine the broad public interest, a higher level of leader can step in. So here’s the pitch to Albany: You screwed up when you filched $12.5 million from Erie County in 2006 to give to the town governments that only subtract from regional sustainability and now have more money with which to do so. Fix that error, Albany, but if you can’t, then at least step in in 2011 and provide the Buffalo area with the cultural, intellectual, and environmental stewardship that the current Ccounty leadership won’t provide. It’s this region’s sales tax money, after all: Just make sure that it gets spent on sustaining this region’s quality of life.

If Albany sets an example of enlightened stewardship, it will actually be a demonstration of Albany’s self-interest, because a stronger Buffalo regional community will suck less revenue from state coffers. Should that happen, then who knows, perhaps a more courageous candidate for county executive will emerge. Changing the national discourse on the public dollar’s role in community sustainability, however, will take more than one election cycle. But while we await that change, our community shouldn’t have to suffer any further.

Bruce Fisher is visiting professor of economics and finance at Buffalo State College, where he directs the Center for Economic and Policy Studies.