Data point #1. Metropolitan Transportation Authority executive director Elliot Sander and the authority’s board members attracted more than 600 people to their marathon six-and-a-half-hour fare-hike and service-cut hearing in Manhattan last night. Here’s a piece of information nobody brought up:

When fully phased in, the MTA’s “draconian” service cuts, including the elimination of important bus routes, would save $130 million annually. But pension and health-benefit costs at the MTA’s New York City Transit — the unit that runs subways and buses in the city — are set to rise by the exact same amount of money over the next two years.

What’s the point? The MTA cannot attack its deficits with service cuts, nor can it solve these ever-rising costs solely with new revenue sources. Taken to the ultimate absurdity, in fact, the MTA could end all service, and still face huge out-year deficits, because of the unsustainable pension and health benefits promises that state and city politicians have long made to the authority’s workers.

Data point #2. Same-store sales at robin’s-egg-blue-box luxury retailer Tiffany were down 35 percent in the U.S. during the holiday shopping season. The luxury customer has disappeared.

What do these two points of data have to do with each other? If history is any guide, New York City and State is likely to want that same luxury Tiffany customer — that is, “the rich” — to pay more in taxes over the next few years to help close city, state, and MTA budget gaps. But the customer cutting back on Tiffany purchases is the same person who’s not sure if he can afford to keep his family in high-cost New York anymore.

The bottom line: If Mayor Bloomberg, Governor Paterson, and the rest of them don’t want assets and services at entities like the MTA to fall apart, they’ve got to cut future pension benefits costs and current healthcare costs for municipal employees.

There is no deep-pocketed robin’s-egg-blue taxpayer this time around who is going to save the pols from this reality.

You may also like

Thanks to Unions, NYC’s School Reopening Deal Was Costly and Educationally Hazardous

New York City schools reopened this fall under terms dictated by the city's teacher and principal unions. Now, as city schools close -- once more at the unions' behest -- the city is left with thousands of extra teachers hi Read More

With Hopes Dashed for “Blue Wave” Bailout, Cuomo Needs to Deal With Budget Shortfall

With the national election results still unclear, Governor Cuomo can no longer put off tough decisions on how to balance New York's pandemic-ravaged state budget. Read More

For State Lawmakers, Secrecy May Pay

New York state legislators may get a raise on January 1, 2021—but the people who elect them may not get to find out before voting ends next week. Read More

In Pandemic Recovery, New York’s Tax Base Is More Fragile Than Ever

New York's exceptionally wealthy state tax base is also exceptionally fragile, due to its heavy dependence on the highly volatile (and portable) investment-driven incomes of Wall Street workers and fund managers. Read More

De Blasio’s (Apparent) Good Move Dissolves Into Phony “Savings”

Late Thursday, as hailed in this space, Mayor de Blasio finally made a decisive move—or at least seemed to make a move—in the direction of actually saving some money on labor costs by getting tough with a powerful (and powerfully self-entitled) municipal union. Read More

Cahill Charges Are An Indictment Of Cuomo’s Policies

Yesterday’s indictment of the state’s top construction union official on federal corruption charges raises a big question: if private companies are paying bribes to avoid having to work with certain construction unions, why is Governor Cuomo insisting that the state keep doing it? Read More

A Federal Emergency Rule Is Inflating New York’s Medicaid Enrollment

Strings attached to federal coronavirus relief funding appear to be inflating New York's Medicaid enrollment – and costs – at a time when the state faces unprecedented deficits. Read More

New York State Has Dug Itself Into Its Deepest Hole On Record

"State's Financial Hole Deepens" is the headline on Comptroller Thomas DiNapoli's press release accompanying the August cash flow report. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.