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Cuomo's valiant effort? still has long way to go

Gov. Andrew M. Cuomo would deserve a silver medal for even thinking about challenging the overwhelming power in Albany of public employee unions. For actually doing it, we're awarding him gold.

He stared them down in a struggle to begin pension reform, and put off another wave of benefits. But New York has a long way to go to avoid the tipping point passed by states like Rhode Island, where that regime is so desperate for revenue it plans to tax private schools.

The prospect of Cuomo getting more support from Democrats for any future challenges is being made more difficult by the Obama campaign, which is placing a big bet on generating prejudice in the electorate against the very concepts of private investment, risk-taking and profits.

Concern about business and taxes is, of course, prompted by last week's announcement by Greatbatch Inc., of Clarence, creator of the pacemaker, that it is moving its headquarters and top brass to Texas. There is no state income tax there.

Rhode Island lost its big industries, its private employers, decades ago because of its high state and local taxes and strong industrial unions.

Today some of Rhode Island's public employers, facing bankruptcy, are abruptly slashing benefit programs and may soon start taxing people for breathing.

Politically and financially, Rhode Island and New York have too much in common. They top the national lists in tax rates, per capita government debt and generosity in public employee benefits. Most voters think government revenues come from thin air.And in neither state is there a vigorous Republican Party. Public union bosses dominate both statehouses.

Financially, Rhode Island is unsustainable. New York threatens to become that way. A non-partisan research organization, GovernmentSpending.com, ranks New York tops among the 50 states in borrowing for state and local government: 26 percent of budget.

The Tax Foundation ranks New York State sixth highest in debt per capita, $6,700, almost twice the national average. In Rhode Island, it is $9,000.

The debt in New York is driven mainly by pension and health benefits that teachers unions and other public employee unions have wrung out of their friends in the Legislature. Take the example of the teachers unions, as laid out by the non-partisan Citizens Budget Commission.

Spending per pupil is $17,746 compared to a U.S. average of $10,590. Teacher health and pension benefits per pupil in New York cost $3,311, more than double the national average of $1,449. The trend is even more alarming: In the years 1999 to 2009, the cost of teacher benefits rose 100 percent. In New York, they grew 169 percent.

A couple of years ago, the Wall Street Journal described the tipping point where an economy risked its future as the moment government employment exceeded manufacturing jobs. New York passed that mark long ago.

According to New York's Labor Department reports of April, three times as many work in government as in manufacturing. T he 1,450,000 public employees actually outnumber all those working in construction, finance and manufacturing combined. Government employees provide extremely valuable services, but do not produce net revenues or wealth. Only private investment does. Believing otherwise is pure socialism.

Cuomo has made a heroic attempt to stop a process in New York that broke the Soviet Empire, is destroying Greece and threatening Spain and Portugal. But it's only a start. Where he'll get support to continue the effort is anybody's guess.

Last week marked the 75th anniversary of the Supreme Court's 5-4 ruling to uphold Social Security. Attorney General Robert Jackson, for whom the Buffalo Federal Courthouse will be named, argued for the winner.

email: dturner@buffnews.com