RAGGED THOTS

Bloomberg proposes only a one-year cut. He said yesterday, "It would be great if we can extend this in the years to come, but we can't know that we'll be as fortunate in the future with our revenues and expenses so right now it would not be fiscally sensible to commit to doing so."

Due to this caveat, while homeowners will no doubt put their savings to good use, New York's economy won't benefit from this cut as much as it could.

Why? Commercial-property investors and their tenants, as well as rental-property investors, will still have to budget new projects or renovations using the higher tax rate, since there's no guarantee the savings won't vanish next year.

If Bloomberg is set on property-tax cuts, he'd do better to at least enact a permanent tax cut - and then pledge to keep spending permanently in line to pay for it. But what the city's property-tax structure really needs is complete reform - rental-property owners and condo residents, for example, now pay far more than their fair share of property taxes, pushing costs up for free-market tenants and owners alike.

And in fact, to spur private investment in the city's economy, an income-tax cut would be better than a property-tax cut. A permanent cut in the city's top 3.6 percent income-tax rate, even a modest one, would have two positive effects.

First, it would encourage the creation of the new jobs the city constantly needs. Second, it would reduce New York's dangerous dependence on volatile tax revenue from Wall Streeters. These traders and others directly provide more than a fifth of city in- come-tax cash - but their incomes tend to fluctuate from year to year, creating wild swings in the city's annual surpluses and deficits.

As Nicole says -- make the tax cuts permanent. Whether commercial property or a single-family dwelling, it becomes very difficult to get people to come to NY to raise a family -- if there's not greater year-to-year tax relief. Why would someone move to New York if they knew that the odds were that they'd be facing a de farcto taxe hike, the following year?

Meanwhile, Bloomberg did even better for his ongoing school reform -- including accountability standards for principals, revising tenure eligibility for teachers (yep, that wailing howl you just heard was the city teachers union.

overhaul a decades-old school funding system that, solely for political reasons, rewards some schools over others. You wont believe this, but today, funding gaps between comparable schools can top $1 million, or $2,000 per student, year after year.

That's not right and we're going to fix it.

Starting in September, we're going to fund students instead of schools, basing our investment on the number of students enrolled, and their particular needs. The goal is equitable funding among our schools and ensuring that each school has what it needs to teach its students.

The possible implications for this could be huge.

If the money is going to follow a student, why not let it follow him or her right into a private independent or parochial school?

So far the mayor and his schools chancellor, Joel Klein, have opposed school vouchers, while enthusiastically backing charter schools. But the change they are proposing could one day allow a mayor and schools chancellor who succeed them — perhaps emboldened by the disappointing record of only incremental improvement within the public monopoly system, even under capable management — to try vouchers. Or at least it could give them a wedge for opening up the issue in Albany.

Labels: Michael Bloomberg, New York City, school choice, tax cuts

# posted by Robert A. George @ 12:09 PM