Last week, much of New York’s attention was focused on financially illiterate liberals derailing the economic future of the metropolitan area by sending 25,000 Amazon jobs and $27 billion in tax revenue fleeing from the city.
That was worthy of notice, but it needs to be understood as part of a disturbing whole. We are seven weeks into the state’s era of single-party Democratic rule. We are seeing city-centric and ultraprogressive control of both chambers of the State Legislature in Albany that many Democrats promised wouldn’t happen. And it is shaping up to be more of a disaster for the state as a whole and the people of Long Island in particular than even the most frenzied Republicans warned before the election.
The Amazon misfire made New York a national laughingstock. It also introduced us to the magic-beans economic theory: When a company granted a 10 percent reduction in the massive tax bills it was going to pay upon locating here flees, the state can use all the billions captured from not reducing that (now nonexistent) tax bill to build subways and schools.
By this logic, imagine how much extra money we’d have if we could get all the big corporations in New York City receiving tax breaks (practically all of them) to leave. We’d be rolling in magic-bean cash!
The Amazon deal died for several intertwined reasons. Control of the State Senate gave Majority Leader Andrea Stewart-Cousins a pick on the Public Authorities Control Board. Stewart-Cousins hails from Yonkers and had promised to run the Senate with love for her suburban moderates. But she gave that board spot to Deputy Leader Michael Gianaris, whose fear of an uber-liberal primary opponent made him a fierce Amazon opponent.
So as soon as the “there will be a suburban coalition” Democrats took the Senate, the most liberal voting bloc in New York City (which is to say, in the world) took over the state.
Need more proof?
While everybody was talking Amazon last week, Senate and Assembly Democrats introduced their 2019 New York Health Act, which is not to be confused with the version that has passed the Assembly four years running and died in the Senate. That version costs a measly $139 billion a year. The new plan adds at least $40 billion a year by fully funding long-term health care and home health care for all.
To be fair, much of this would be paid by redirecting money that goes into existing health insurance. But even before this year’s hefty additions, a study by the Rand Corp. that plan architect and Assembly Health Committee chair Richard Gottfried embraced concluded that the top 5 percent of earners would pay about $150,000 more a year.
Except many of them wouldn’t. State officials say the top 1 percent of taxpayers in New York, or 93,000 filers, pay 46 percent of the income taxes. Which, starting in 2018, were mostly no longer federally deductible. Many such high-earners, faced with the kind of tax hike single-state single-payer would demand, would simply “do an Amazon” (copyright 2019), leaving the state with their often-portable income.
That suburban coalition also hasn’t achieved its main priority: making the property-tax cap permanent. That’s not surprising. The public employee unions that have funded the Democratic Party for decades don’t want the tax cap. What they want, after all these years of contributions, is a payoff: more government spending at every level.
To achieve their progressive goals, New York Democrats need votes to empower their party and wealth to fund their initiatives. Thus far, they are driving away both.
Lane Filler is a member of Newsday’s editorial board.