Once again, the New York State legislature in Albany has adjourned without adopting anything resembling “ethics reform.” The reason is obvious: two major public-policy polls conducted after former Assembly speaker Sheldon Silver and former Senate majority leader Dean Skelos were convicted in high-profile corruption trials reveal that the public doesn’t care much about reform. The political class understands this and acts—or fails to act—accordingly.
Silver and Skelos soon will be off to prison, assuming U.S. Attorney Preet Bharara’s convictions survive appeal, and business in Albany will proceed as usual. That is, it will proceed in the manner of a legally sanctioned RICO operation, acutely sensitive to the needs and desires of establishment players—yet not so much to those of anybody else.
While failing to address New York’s systemically corrupt politics, Governor Andrew Cuomo and the legislature’s post-Silver/Skelos leadership instead engineered huge transfers of wealth from one sector of the economy to another—well-serving their own political interests, but with scant regard for the effect on the state as a whole.
This once was known as “raising taxes”—a relatively straightforward and honest practice, but one with a big downside for governors and lawmakers: taxpayers, who tend disproportionately to vote, don’t like explicit tax hikes. Today, the practice is presented variously as “striking a blow for social justice” and “promoting economic development,” among other things. Politicians get to signal virtue while implicating opponents as base profit-mongers or worse. The payoff comes later, at the appropriate point in the next election cycle. Best of all, there is virtually no tax-hike blowback.
Specifically, Cuomo, Assembly speaker Carl Heastie and Senate majority leader John Flanagan conspired this year to hike the state’s minimum wage by approximately 70 percent, then sweetened the pot with a paid-family-leave mandate for private-sector employers. While the full cost of all this isn’t yet clear, the University of California, Berkeley’s pro-wage-increase Center for Wage and Employment Dynamics estimates that when the ripples subside, some 37 percent of New Yorkers will have been given a raise. That ain’t chopped liver.
But while the price will be borne in the first instance solely by employers, the negative effect on employment and the state’s economic climate will be substantial. Respectable estimates of job losses alone run as high as 200,000, and wage inflation inevitably will spread through the entire economy—increasing the cost of doing business in a state that already is arguably the least competitive in America. If that doesn’t amount to an enormous, economically corrosive business-tax increase, then the words have no meaning.
Delighted by the outcome, of course, were the labor unions and left-leaning political organizations that demanded the legislation. And why shouldn’t they be delighted? The new law adds up to even more influence in a state where union power long ago twisted the political process into a corrupt pretzel.
Appreciation day will come soon. While New York clearly doesn’t lack for politicians crude enough to shove loose cash into their own pockets, as did Silver and Skelos, most are more subtle. They’ll enter their respective election cycles flush with union campaign cash, and with activist foot soldiers at their command. Potential opponents rarely can hope to compete with such wealth, so legislative turnover comes mostly from voluntary retirements or federal corruption convictions. This all but ensures that the process will continue in future legislative sessions.
The phenomenon extends beyond artful tax increases. Apportioning tax dollars to support “economic development” initiatives—hometown pork-barrel spending meant to boost the fortunes of incumbent politicians—is as old as democratic government. But not since the glory days of Nelson Rockefeller has pork-barreling been practiced as lustily as in Andrew Cuomo’s New York.
The governor has directed hundreds of millions of tax dollars to the so-called Buffalo Billion project in Erie County, and more to Albany’s SUNY-Polytechnic Institute—both hugely unconventional public-private partnerships, ostensibly meant to create upstate jobs. So far they’ve only saddled state taxpayers with substantial risk while pumping up Cuomo’s already over-stuffed campaign accounts. Perhaps more significantly, the projects have attracted the attention of Bharara’s criminal investigators; they’ve been probing the Buffalo Billion for more than a year, while recently turning their attention to SUNY-Poly—as well as to Cuomo’s one-time closest aide, Joseph Percoco.
The next move is Bharara’s, of course. But both the Buffalo Billion and SUNY-Polytechnic are essentially efforts to reverse the effects of generations of ruinous tax and regulatory policies that have ground the upstate economy to a nub. As such, each involves public spending of the sort that is catnip to unscrupulous politicians and their advantage-seeking allies. Some folks think that is largely the point, so don’t be surprised if Bharara drops the hammer.
In a larger sense, however, all of this—the crudely camouflaged tax hikes and the barely supervised private-public works projects that sprinkle so much cash on incumbents—is both legal and embedded in New York’s political culture. (One is probably a function of the other.) And nothing yet proposed in the way of ethics reform comes even close to addressing such issues.
It speaks volumes that what has been proposed—constricting the ability of limited-liability corporations to make political contributions and adopting taxpayer-financed electoral campaigning, among other things—has itself failed to gain significant traction. In practice, that’s probably a good thing. Cracking down on LLCs would hamper the ability of business to protect itself in Albany, while doing nothing to mitigate the power of rapacious public-employee unions. New York City has had public campaign finance for years now, and its incumbent mayor, who embraced the program ardently, is the subject of at least five separate federal criminal investigations.
Still, New Yorkers seem inured to all this. They appear distressed when an Assembly speaker is indicted and convicted, but not particularly surprised. And while they tell pollsters they generally believe political ethics are important, it’s a different story when asked to assign a priority to reform.
In February, just days after Silver’s corruption conviction, a poll conducted by the upstate Siena College Research Institute discovered that, while 90 percent of New Yorkers believed that their state is thoroughly corrupt, a scant 18 percent considered doing something about it to be a priority. A more recent Quinnipiac University poll reported that 55 percent of New York City voters consider the de Blasio administration to be corrupt, but just 3 percent believe “politicians” to be the city’s top problem, and only one-third of them identified political corruption as their major concern. One can only imagine how Bharara receives news of such surveys.
The numbers could go a long way to explain New York’s shockingly low voter-turnout numbers. If the game is so obviously rigged, after all, why bother to participate? “If angels were to govern men,” James Madison wrote, “neither external nor internal controls on government would be necessary.” Obviously, no angels are guiding government in New York. But effective controls are sorely lacking, as well, and the just-concluded legislative session did nothing to change that. Don’t get your hopes up that the next one will do better.
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