Most politicians run for office because they want to make things better. However, when we look at some of the latest legislative achievements by New York Gov. Andrew M. Cuomo, it would seem that his accomplishments, although laudable, are not as game-changing as they may appear at first blush.
Over the years, the political leadership in New York has been so terrible that when the current governor begins to enact common-sense reforms, he looks like a genius. In reality, Cuomo's genius may be more in the political arena than as a manager of the state's finances.
The outcome of two negotiations, one with a union, and the other with the Legislature, demonstrates this point. It was recently announced that the largest state-worker union, CSEA, accepted a five-year contract with no wage increase during the first three years of the pact. It receives a $1,000 increase in year three and 2 percent increases in years four and five.
Only in New York can workers with frozen wages make more money. How is this possible? Through the magic of longevity step increases. Most civil servants such as state employees and teachers receive a pay increase negotiated in their contract, in addition to an annual raise for fogging the mirror for another year. The governor has frozen the wage increase, but not longevity step increases.
One of the major reasons for the struggling upstate economy is the massive tax burden placed on homeowners. A press release by the Buffalo Niagara Partnership states that "Studies show that property taxes have the strongest negative impact on business, because they are paid regardless of profit In upstate New York you'll find nine of the 10 top counties in the nation when comparing property tax rates measured against home values."
Contrary to popular belief, snow is not the major reason for the population exodus from upstate New York; it is the snow job that local politicians have sold us that we can tax ourselves to prosperity and a better life.
The Cuomo administration has recently announced an agreement on a 2 percent cap on property taxes that is scheduled to begin next year. Specifically the cap is the lesser of the rate of inflation, or 2 percent. There are some exceptions to the cap, such as pension contributions or large lawsuit settlements.
One particular problem with the legislation is the very significant loophole that a school district can override the cap with a plurality of 60 percent of the voters. Low voter turnout for school elections may eviscerate the property tax cap.
As is often the case, the devil is in the details. Let us hope that the governor's good intentions are not undermined by seemingly small details. Time will tell if this legislation lives up to its advanced billing.
Anthony J. Ogorek is operating manager and founder of Ogorek Wealth Management LLC.