Fortunate Prospects

If there were ever any doubt that misery loves company, surely it would be dispelled by the enthusiasm with which New York’s politicians greet the news that many other cities and states around the country are in fiscal trouble too. New York’s leaders love to point out that they can hardly be blamed if New York shares in the effects of a national recession. We’re just the same as those other places, see.

Well, not quite. As several of the pieces in this issue show, the most important fact about the governments of both New York State and City is how atypical they are. Not unique, of course: As Gerard Mildner points out in this issue, though New York City certainly has the highest tax rates on apartment buildings and commercial properties of any major U.S. city, it does have a rival: Detroit. This rivalry, suffice it to say, does not detract from Mildner’s thesis that New York’s property taxes are helping to destroy the city’s housing stock and contracting the tax base, especially in poor neighborhoods.

New York State is neither the highest-taxing nor the highest-spending state in the nation on a per capita basis, though it ranks in the top ten for both. Add in local spending, however, and it is far and away the national leader (excluding Alaska and Wyoming, which produce weird numbers because they have lots of mineral royalties and nobody lives there). Among states with high state taxes and spending, New York is virtually alone in also having high local taxes and spending. One reason for this, as Edwin Rubenstein shows, is that New York State by far leads the nation in the use of state "mandates": programs the state designs but then requires localities to implement and help fund. Thus in New York an increase in state spending usually produces a corresponding mandated increase in local spending, ensuring that Albany and its local governments will all go bust together.

As Lawrence Mead points out, New York City leads the nation by far in welfare dependency, with almost 15 percent of the population on some sort of public assistance. New York State, however, also leads the nation in resistance to welfare reform. We particularly resist the idea that welfare recipients should be required to work for their checks, though such requirements not only get people off welfare but improve their lives and their behavior even while they remain on the rolls. Yet New York so resists this idea that it has been willing to risk hundreds of millions in federal aid to avoid enforcing work requirements.

Professor James Jacobs of NYU law school dwells on a different category of New York exceptionalism: New York’s criminal justice procedures. In most states, of course, crime victims, police, and prosecutors complain that the federal courts keep them from pursuing criminals as zealously as they would like. New York, however, is virtually unique in that its criminal procedures offer far greater protection for suspects than do the federal rules. If New York’s procedures reflected simply those rules imposed by the federal courts, it would be far more difficult to get away with murder, among other crimes, in this state.

Life is tough all over; we have chosen to make it tougher here—and far more expensive. Rising crime is a national problem and New York is not the most dangerous place in the country. But by its own choice it is far more dangerous than it need be. All inner cities are ravaged by the pathologies of the underclass, pathologies nurtured by a welfare system that has long exempted the poor from the normal rules of American life. New York, however, does not have the poorest population in the nation and need not have the nation’s worst welfare problem.

If New York’s combined state and local spending were reduced, not to anything like the national average but simply to the average of the next five most spendthrift states, both New York State and City would be comfortably in the black, and the fiscal crisis would be something happening in Connecticut or California. If New York City’s commercial or multi-unit property taxes were merely the fifth highest for major American cities, they would be 25 percent lower, and thousands of abandoned and decayed buildings would be sheltering low-income families today.

The worst thing our leaders can do in the current crisis is to blame "conditions beyond our control." Pleas of helplessness are counsels of despair. Precisely because our problems are caused not by "conditions" but by our own mistakes, this state and city still have wonderful prospects. What we have done we can undo, what we have made we can change.

Pride and despair are constant companions, coupled vices. If we can develop the humility to give up our exceptionalism and learn that even a place as great as New York cannot always spend the most, tax the most, or defy common sense and get away with it, the reasons for despair will vanish too. We need neither pride nor despair but a healthy dose of realism, for in reality we are still a fortunate people in fortunate circumstances which, with a bit more honesty about our own mistakes, we should long enjoy.



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