State of the [NY] City
In a phrase — not good
In a preview to Mayor Bloomberg’s “State of the City” address, ABC’s NJ Burkett said that Bloomberg will not raise property taxes. While that is good news for owners of homes, condos, and co-ops, it’s terrible news in other ways. First, it will mean budget cuts for the city payrolls, i.e. police officers, firefighters, teachers, and other city employees. Which leads to less disposable income, causing belt-tightening. Which eventually leads to less discretionary and luxury spending. Which either leads to less purchases, keeping things like cars and appliances longer rather than replacing them. Which eventually leads to layoffs in the retail sector. Which leads to……..etc,
And all this happens as NYers are looking at higher mass-transit fares, still-expensive gas, and higher tolls on NJ roads. OR, it COULD lead to more buying on credit, and bills they won’t be able to pay later. The ramifications for the NYC Metro area are endlessly scary! But what I question is who were all these people mobbing the Queens Center Mall just before Christmas spending all that money!! I would be interested to know if there are other NYers out there who find this as frightening as I do…
Are you seriously saying that _not_ raising property taxes will lead to less disposable income available to residents of NYC?
If the taxes are raised, what do you think happens to the disposable income of those who pay the taxes? It either goes down, or the property owners increase the rents they charge their tenants to make up for the difference. And increased commerical rent leads to increased consumer prices, etc etc…
In case this somehow isn’t obvious, most people that live in NYC are not employees of NYC. So while lower taxes may suck for those making a government wage, the rest of us (renters or owners) will have more money in our pockets. The retail sector would be much more adversely affected by higher taxes (i.e. higher rents) than by city employees not spending as much in their stores.
I don’t mean to diminish the importance of city employees, but what you’re saying just doesn’t make any sense. If you had made the standard "lower taxes means less city services available, which leads to more crime, …" argument I would’ve agreed with you, but saying that lower taxes = less disposable income is ridiculous.
Rondell is right, unless all this money is comming from outer space–government employee income is just a transfer from other residents of the city/state/country or in the case of debt –future residents or employers. To the extent that it pays for something vital and valuable, it’s worth it but it’s not free money.
The falling dollar makes one realize that the market is starting to wonder about where the money is going to come from.