E.J. McMahon

Mayor Bloomberg's proposal to raise the city’s cigarette tax to $1.50 from 8 cents per pack is expected to cut taxable consumption in half, as many more smokers quit, cut back, or turn to alternative sources out of state or on the Internet. This would undermine the financing for Governor Pataki’s health care programs, which depend partly on revenue from the state’s cigarette tax. Read More

A majority of City Council members has called on the council leadership to back a city income tax surcharge of up to 55 percent on high-income New Yorkers. This $1.23 billion tax increase would have a devastating impact on the city's economy, leading to the loss of another 48,000 jobs, according to the Manhattan Institute’s tax policy analysis model. It would boost the combined state and city income tax rate to a maximum of 12.5 percent—nearly double the next-highest rate in any neighboring state. Read More

The collective bargaining table will be the most important field of action for Mayor Bloomberg over the next 18 months. Bloomberg's tenuously balanced Executive Budget assumes little change in the size of the city workforce in the year ahead and no net wage increase for city workers in the three years after current contracts expire. If this assumption proves overly optimistic, next year's budget will be knocked out of balance, and huge projected budget gaps in subsequent years will grow by another $1 billion or more. Clearly the mayor cannot bring city finances back under control unless he wins significant concessions from municipal unions—and reduces the employee headcount in the process. Read More

Mayor Bloomberg could realize more than $1.2 billion a year in city budget savings if he can get municipal employee unions to agree to proposed labor givebacks and productivity reforms including a health insurance co-pay, a longer work day for teachers, more scheduling flexibility for cops and firefighters, and less vacation and leave time for newly hired workers. But it all starts with ‘the zero option’—a pay freeze after current contracts expire in fiscal year 2003. Read More

For all the hue and cry about the ‘cuts’ needed to close New York City’s $4.9 billion budget gap, a funny thing happened on the way to the 2003 fiscal year: the first adopted budget of the Bloomberg era does not reduce overall city spending. The nearly $800 million increase in the "city funds" portion of the budget is the key to understanding why New York City continues to face massive potential deficits for as far as the eye can see. Read More

New York City's new schools chancellor, Joel Klein, kicked off his introductory news conference with the observation that ‘resources are scarce.’ True enough—although you wouldn't know it from looking at the Board of Education's budget for 2002-03. Even after the latest round of budget cuts ordered by Mayor Bloomberg, spending will keep pace with inflation. And adjusting for cost-of-living changes, per-pupil expenditures are up 57 percent since 1983. Read More

New York City’s impending property tax hike will lead to the loss of another 62,000 private sector jobs, re-accelerating a downward economic spiral that dates back to the end of 2000, according to a forecast by the Manhattan Institute's econometric model. Read More

If the new transit workers deal is used as the “pattern” in the next round of collective bargaining with New York's public employee unions, the result would be $725 million in added labor costs for the state and $1.2 billion a year in added costs for the city, not including any offsetting productivity concessions. Read More