A FAIR, OPEN AND DEMOCRATIC ECONOMY
New York is an extraordinary state, and we should have an economy that matches our capacity. Yet Governor Cuomo’s economy works primarily for a few big businesses, one that enriches the rich and strangles opportunities for the rest of us. Extreme consolidation has enabled a few giants to hike prices, squeeze supply, and unfairly trample competitors. The game is rigged, and the evidence is all around us. We face staggering inequality of wealth and opportunity, at levels unseen since the Gilded Age. Unemployment continues to soar even as corporate profits are booming.
Rather than work to reverse these inequities, Governor Cuomo has made them more severe. He has consistently supported short-term policies that enrich a few, and that leave behind workers, the middle class, and poor families.
Within his first year he modified the millionaire’s tax to benefit some of the wealthiest earners in New York State: those with an annual income between $500,000 and $2 million received a tax break of almost 25 percent, costing the state over $1 billion a year. He has raised the estate tax exemption from $1 million to a whopping $5.25 million– a huge giveaway to the richest in our state. And even though corporate tax revenues make up a much smaller percentage of total state tax revenues today than they did 30 years ago, the Governor cut their contribution even further. In this year’s budget, he reduced the corporate tax rate from 7.1 percent to 6.5 percent, the lowest rate since 1968. What’s more, he eliminated a separate bank tax entirely, which means our biggest commercial banks pay taxes on only 8 percent of their securities income, even though New York’s share of investment banking is 39 percent.
Who pays for these giveaways to the wealthy? The rest of us. Scrapping the bank tax and reducing corporate taxes alone will cost New York over $700 million a year in lost revenue when those cuts are fully phased in. New York is paying for these cutbacks by slashing spending on social services and public education. Governor Cuomo has handed more money to the rich, in other words, by shortchanging our children. There are tens of thousands fewer teachers in our public school since the Governor took office. The share of state funding for our public schools is at a 65-year low.
Even when Governor Cuomo has moved to serve the people of New York, his policies too often come with a catch. He agreed to raise the minimum wage some – but it won’t come into effect for three years. Governor Cuomo pushed to ensure tax cuts for the wealthy keep apace with inflation, but wouldn’t demand the same for minimum wage – exposing the buying power of low-wage workers to inflation. He claims his tax policies benefit the middle class – but the tax burden on middle-income New Yorkers is still one- and-a-half times higher than what the richest New Yorkers carry. He takes credit for reducing the unemployment rate – but when you take into account the thousands of workers who’ve given up on looking for a job because there’s nothing around, the unemployment rate is actually a full point higher than what the Governor proclaims.
Playing around with numbers can’t mask the facts: Governor Cuomo’s economic policies have mostly enriched the few at the expense of the many.
We can have a people’s economy, one that puts the working people and middle class back at its center. We can restore the people’s economy in New York. We can challenge the great concentration of wealth and power that rigs our economy and corrupts our democracy, so we can recover the foundations of our common prosperity.
My economic policy would rest on four platforms: economic fairness, a 21st century Internet, stopping consolidation, and building infrastructure.
a. Economic Fairness
I would push to raise the minimum wage, so that nobody who works full-time lives in poverty. I am completely committed to local wage authorization. I strongly support paid sick days and paid family leave insurance, so that no parent has to choose between paying the bills and nursing a sick child. I support making it easier for workers to unionize. If a banker can join his ten friends to form a corporation, why should it be any harder for a factory worker to join his ten buddies to form a union?
The centerpiece of my economic policy would be to level the playing field between independent business and big business. Franchises are being squeezed by the corporate McDonald’s or Yum Brands at the top, while family stores – an anchor of immigrant communities – face huge pressures in an economy geared towards benefiting the big and the rich. I would push to enforce our antitrust laws, so that we have markets with real competition and real opportunity for entrepreneurs and small business – the engines of our economy – to create jobs and thrive.
I would roll-back the tax cuts Governor Cuomo handed the wealthy few. We should extend the millionaire’s tax beyond 2017, to ensure we can fund our schools and public programs for the long-term. We should bring back a form of the bank tax, and review the corporate tax system, to ensure companies pay their fair share.
b. 21st Century Internet
Like electricity, water, and telephones, Internet today is an essential service. In order for New York citizens to participate in our 21st century democracy and economy, we need a 21st century Internet: service that is open, universal, affordable, and world-class.
At present, we are staggeringly far from that reality. Huge swaths of New York State lack reliable broadband infrastructure. Slow and spotty Internet access is a problem in New York City, Long Island, throughout the Southern Tier lakeside, along the St. Lawrence, and everywhere in between. In some commercial districts it's still difficult to get a broadband connection at all.
Poor quality Internet service is due in large part to dramatic market consolidation, which leads to a lack of competition. In New York City, for example, many buildings have only one option for high-speed service. That permits companies to fleece consumerswith oppressive contract terms at high prices for speeds that are still not that fast. Large parts of Upstate and Long Island are similarly beholden to the local cable monopoly that has no reason to offer quality service. It is like AT&T in the 1970s and early 1980s all over again — with no alternatives, a lack of competition in the market for broadband means no innovation, poor quality, and high prices.
In fact, when we compare broadband quality and prices internationally, our options in New York consistently lag behind counterparts in Europe and Asia, sometimes costing more than three times as much for a fraction of the speed. Already, the dismal quality of service is costing New York jobs we cannot afford to lose. Tech entrepreneurs regularly cite slow and unreliable bandwidth as one of the biggest challenges they face in New York.
Worse, deficiencies in this essential service also compound inequality. Inadequate broadband infrastructure and unnecessarily high prices exclude members of underserved communities and low-income residents from accessing resources online in their homes. Yet we know that affordable, high-speed, broadband Internet is critical for finding work in today’s economy.
What's more, dramatic consolidation often means that when service goes out, there's no back-up. Hurricane Sandy revealed how the lack of competition renders broadband infrastructure and service stunningly fragile. In the wake of Sandy, it was decentralized mesh networks that kept New Yorkers connected, showing that more and diverse networks means more resilience.
c. Stop the Consolidation of Power
The $45 billion proposed merger between Comcast and Time Warner Cable will make all this much worse. Both companies have a sizable presence in the state: Comcast has 23,000 digital cable, Internet, and telephone subscribers in New York, while Time Warner Cable has close to 2.6 million subscribers spanning New York City and upstate areas. Merging will make it easier for the new giant to hike prices without improving service. Any remaining incentive to build-out in underserved areas and invest in world-class broadband infrastructure like fiber-optics networks will vanish. The two companies already wield massive economic and political power over the residents of our state; this merger will consolidate that power even further.
The Governor of New York could work to stop this merger. Yet Governor Cuomo’s response has been astoundingly meek. His only act has been to ask the Public Service Commission to review how the deal with impact New York residents. He has signaled he will push the companies to show how the merger promotes the public interest and to improve access and service across the state.
This kind of deal-cutting shortchanges New York. We cannot settle for paltry concessions that companies can renege on or modify later. What we really need is real market competition. We need to unwind the extreme consolidation that is fleecing New Yorkers for third-rate service, and leaving us behind other regions in the US and across the world. And we should ensure the cable giants can’t squeeze the life and profitability out of our TV and film industries, mainstays of New York’s economy and culture.
We should strongly urge the Public Service Commission to challenge the Comcast-TWC merger outright. More broadly, we should push to expand PSC jurisdiction so that the Commission also oversees the provision of Internet service. We need public oversight over what is today a vital public good. We should act, not simply react, by pushing universal, open, affordable, and world-class Internet in New York. We should promote the use of municipal mesh networks, which empower communities to own and maintain their own wireless networks, while making essential communications infrastructure more resilient. And we should make sure Comcast can’t relegate New York’s small businesses and budding tech entrepreneurs to Internet slow lanes, while cutting deals with other corporate giants. We must unleash the innovative potential of truly high-speed and open Internet for businesses and citizens, to ensure everyone can participate fully in our democracy and economy.
Two of the most immediate threats to New York are its aging infrastructure - like bridges, rails, and pipes - and the fragility of its critical systems, like food distribution. As both the gasoline explosion that ripped through two Manhattan buildings in March and Hurricane Sandy revealed, inaction has and will continue to cost us human lives. Governor Cuomo has failed to address these vital issues in a comprehensive and sustainable way, leaving New Yorkers alarmingly exposed to the next disaster.
On the surface, the Governor has made infrastructure a priority. In January he unrolled an extensive proposal to equip New York for disaster preparedness by building a weather detection system, repairing old bridges, and launching a college dedicated to studying emergency preparedness. But it's hard to believe that the Governor is serious about this $17 billion plan, because he has steadily eroded the state's ability to pay for these vital updates. Two rounds of steep budget cuts for 2015 and 2016 have already handicapped the state's ability to pay for school aid, public education, and aid to distressed localities, and the Governor's multi-year tax cut package will further deplete state tax revenues. One of the most telling measures of the Governor’s neglect is how drastically he has reduced capital spending.
Worse, to make his budget work, the Governor is raiding even those funds explicitly designated for improving roads, bridges, and transit. In 2013, the Governor first diverted $20 million from MTA transit funds to balance the general state budget; this year he swept away $30 million, and plans to take at least $20 million from the state's transit fund every year until 2031 – which would rob the MTA of $350 million in funds designated for improving our transit system over the next 17 years. These cuts hit at a time when MTA's margins are dropping, and would make the agency's budget more reliant on volatile tax returns.
New Yorkers lose massively from the Governor's decision to use transit funds as an ATM: the MTA is delaying necessary maintenance and repairs because it lacks the $10.5 billion to fix its tracks and trains. Nor is it just MTA funds: 78 percent of the $3.8 billion that New Yorkers pay in highway taxes and fees each year is diverted to cover state budget costs, leaving crucial highway and bridge projects underfunded. It's difficult to believe the Governor is committed to making New York infrastructure safe when he is robbing it of crucial investment.
What’s more, updating our infrastructure and building safer systems presents a huge opportunity to create jobs in New York and boost local business -- after all, the MTA is the country's largest transit system, and the state houses the largest base of transit-related manufacturing firms in the US. The importance of leveraging these resources to bolster our economy seems obvious. But when awarding the $235 million contract to renovate the Verrazano Bridge, the MTA chose a Chinese company over local steel millers, giving away jobs and money that the state sorely needs.
Importantly, the Cuomo administration has also failed to address one of the main lessons of Superstorm Sandy: that the citizens of New York have only nine meals of food in the delivery pipeline leading to their homes, schools, and hospitals. One of the main reasons for this is that a handful of dominant companies that control the delivery infrastructure on which we depend have drastically consolidated supply, moving food stocks from within the city out into warehouses located as far as the distant reaches of Pennsylvania. Another reason why we remain so susceptible is that these companies have also shifted towards lean supply chains and practices like “just-in-time” delivery, which enables them to keep less storage, save some pennies – and, in times of disaster – leave us exposed to drastic shortages. The pending merger between two of the country’s biggest food distributors – Sysco and US Foods – would intensify each of these threats, by eliminating competition and handing enormous power over our food distribution to even fewer executives.
We should make it a priority to fund crucial infrastructure projects by hiring workers and manufacturers in New York. We should reject any efforts to divert funds from the transit authority, and make sure that Albany doesn’t breach promises to taxpayers about how it will use their money. We should also closely scrutinize the merger between Sysco and US Foods, and ensure that any future consolidation of our food systems doesn’t compromise our safety.