Gov Trashed New York State

When Nelson Rockefeller was born 100 years ago today, New York state was America’s economic powerhouse – with its best years still ahead.

By the time Rockefeller died in 1979, New York was a state in decline, struggling to cope with an exodus of people and businesses stemming from the overwhelming burden of state taxes, debt and spending he had imposed during his 15 years as its governor.

State and local government across the country expanded rapidly during the 1960s and early ’70s – but under Rockefeller, New York’s government growth was exceptional.

When Rocky first ran for governor in 1958, the Empire State’s tax burden was 12 percent above the US average (relative to personal income). By the time he left office at the end of 1973, it had swelled to 28 percent above average, as illustrated by the chart.

Rockefeller quadrupled the state budget and doubled the state income-tax rate. He created scores of new public authorities and let state debt explode – giving birth to a culture of fiscal recklessness that persists in Albany to this day. In countless ways, New Yorkers are still paying a stiff price for Rocky’s tenure.

Rockefeller would have done far less damage in New York if he hadn’t been such a gifted and energetic (not to mention wealthy) politician – certainly among the most consequential of the state’s governors. Quite aside from his gubernatorial record, his achievements on the national and international stage, capped by two years as vice president, would suffice to make his centennial a noteworthy milestone.

But Rockefeller’s admirers are seizing the opportunity to go even further – glossing over his spendthrift record to recast him as a centrist worthy of emulation in the 21st century.

The revisionist view is typified by the historian Richard Norton Smith, now working on a Rocky biography. In yesterday’s New York Times, Smith wrote that Rockefeller deserves to be seen as a “futurist,” a man whose “zeal for big, bold ideas put New York in the vanguard of civil rights, mass transit, urban housing, labor law, mental health” and other areas.

Rockefeller’s ideas were big, all right – but they were hardly original. For example, while he pushed an already moderate GOP to more fully embrace the civil-rights movement in the 1960s, it was his predecessor once removed, Gov. Thomas Dewey, who blazed a trail in New York by boldly enacting the nation’s first state anti-discrimination law a decade earlier (as documented in Smith’s own fine biography of Dewey).

And while Rockefeller’s Metropolitan Transportation Authority stabilized the region’s bankrupt suburban railroads, the MTA failed to stem the rapid deterioration of the city’s subways during the same period. The Urban Development Corp. (UDC), created by Rockefeller to finance inner-city renewal while overriding local zoning laws, would evolve into an all-purpose vehicle for financing prisons and “economic development” projects of every description – without voter approval, of course. And UDC’s default on a bond payment in 1975 would trigger the city’s fiscal crisis.

Capital spending by the UDC and other authorities provided extra grease for the governor’s legendarily close relationship with construction trade unions. Rockefeller’s 1967 Taylor Law effectively saddled New York with a public-sector labor cartel that dominates its politics and inflates its budgets to this day.

As for mental health, Rockefeller’s “vanguard” programs failed to prevent the horrific abuse and neglect of patients in state institutions for the developmentally disabled, as exposed by the Willowbrook scandal the year before he left the governor’s office.

Rockefeller’s expansion of state welfare programs – eagerly abetted by Mayor John Lindsay in New York City – made the state a magnet for the dependent poor by the late 1960s. The governor’s belated attempts to stem the tide with tougher work requirements in the early ’70s were unsuccessful. The welfare reforms of the ’90s finally tamed that problem – but Rockefeller’s Medicaid program, the nation’s costliest, endures.

A man of seemingly boundless vision, energy and ambition, Nelson Rockefeller demonstrated that there are, indeed, limits to what government can and should try to do. Overlooking his mistakes increases the risk that they will be repeated – which already seems in danger of happening.

State spending over the past five years has surged to unsustainable levels, with annual increases peaking at the highest rates since Rockefeller’s last term. The public-sector labor unions that ultimately owe their power to Rockefeller are now pushing for the most massive state tax hikes since the early 1970s.

Focused on a national audience, Smith concluded his Times piece: “For better and for worse, Nelson Rockefeller was ahead of his time. So it’s back to the future: We don’t admit it, but we’re (mostly) Rockefeller Republicans now.”

If that’s the case, we’re in more trouble than we thought.