N.Y. State is NOT broke!

Dr. Andy Coates Division 231Public Employees Federation, AFL-CIO

Artwork and slide design by

PEF Graphic Artist Mario Bruni

New York State faces a budget deficit of$10 billion in 2011 ~ 1/13th of

a total $132 billion operating budget

Public employees are blamed (for a crisis we did not create)Threatened with 9,800 layoffs

WHAT’S HAPPENING?WHAT’S HAPPENING?

WHAT’S HAPPENING?

A major assault A major assault upon upon

public education, education, public health health

and and public safety safety

A major assault A major assault upon upon

public education, education, public health health

and and public safety safety

An offensive An offensive against public workers, public workers,

led by the nation’s led by the nation’s Governors Governors

and lawmakers, and lawmakers, state by statestate by state

An offensive An offensive against public workers, public workers,

led by the nation’s led by the nation’s Governors Governors

and lawmakers, and lawmakers, state by statestate by state

ANTI-UNION LEGISLATION INTRODUCED IN OVER 20 STATES

RIGHT-TO-WORK LAWS INTRODUCED IN 14 STATES

WISCONSIN AND OHIO HAVE PASSED SWEEPING ANTI-UNION LAWS

TEACHERS’ UNIONS TARGETED… States with bills to limit or eliminate collective bargaining for teachers, or otherwise target teachers' unions include Wisconsin, Ohio, Tennessee, Indiana, Nebraska, Texas, New Hampshire, Michigan, Idaho, Massachusetts, Oklahoma, Pennsylvania, Alabama, Florida, Minnesota, Missouri, Utah, Arizona, and others

Public employeePublic employeeunion membersunion members7.6 million.7.6 million.

Private sector Private sector union members union members 7.1 million.7.1 million.Source: Source:

““(Government) workers of the (Government) workers of the world unite! Public-sector world unite! Public-sector unions have had a good few unions have had a good few decades. Has their luck run decades. Has their luck run out?” out?”

The EconomistThe Economist, 1/6/11, 1/6/11

www.economist.com/node/17849199www.economist.com/node/17849199

A major assault A major assault upon organized labor,upon organized labor,an offensive against an offensive against

all of the unionsall of the unions

A major assault A major assault upon organized labor,upon organized labor,an offensive against an offensive against

all of the unionsall of the unions

We need to take We need to take our own pulse! our own pulse!

Remember the Remember the adage: “the best adage: “the best defense is a defense is a good offense.”good offense.”

We should ask: We should ask: Who are they defending?



We should ask: We should ask: Who are they defending?

BILLIONAIRES! BILLIONAIRES!

THE ASSAULT ON THE

UNIONS IS REALLY A

DEFENSE OF THE BANKERS

AND

BILLIONAIRES

THE ASSAULT ON THE

UNIONS IS REALLY A

DEFENSE OF THE BANKERS

AND

BILLIONAIRES

In the universe there are 1,210 billionaires

In the universe there are 1,210 billionaires

412 Billionaires in the USA! 412 Billionaires in the USA!

How many Billionaires in

New York?

68!

New York

IS NOT BROKE!

68 Billionaires

in New York

The wealthiest New Yorker is no longer Mayor Bloomberg…

(he’s now the 2nd wealthiest)…

The wealthiest New Yorker is no longer Mayor Bloomberg…

(he’s now the 2nd wealthiest)…

XX

Today the richest New

Yorker isDavid Koch,

worth about $22

Billion!

Today the richest New

Yorker isDavid Koch,

worth about $22

Billion!

During the heyday of America’s middle class (1950-1980) the top 1% had about

10% of total income.

They now take 25%!

During the heyday of America’s middle class (1950-1980) the top 1% had about

10% of total income.

They now take 25%!

Top 1% Income Share 1914 to 2006Top 1% Income Share 1914 to 2006

^ ^ Eisenhower Reagan

Growing income inequality

James Parrott, Ph.D., Fiscal Policy Institute, “Grow Together or Pull Farther Apart? Income Concentration Trends in New York,”

http://www.fiscalpolicy.org/FPI_GrowTogetherOrPullFurtherApart_20101213.pdf

We have the most unequal income concentration of any state in the

nation.

New York’s wealthiest 1% get more than

35% of all income in New

York State.

Income shares and household incomes in New York 1980 compared with 2007

(2007 dollars)

Shares of Total Income (AGI) % change1980 -Top 5% - 22%2007 - Top 5% - 49%

1980 - Bottom 95% - 78%2007 - Bottom 95% - 51%


(2007 dollars)

Shares of Total Income (AGI) % change1980 -Top 5% - 22%2007 - Top 5% - 49%

1980 - Bottom 95% - 78%2007 - Bottom 95% - 51%



Since 1990,the top 5% have

GAINED.

THE bottom 95% have LOST.

Since 1990,the top 5% have

GAINED.

THE bottom 95% have LOST.


(2007 dollars)

Average Income (AGI) % change1980 -Top 1% $446,507

2007 - Top 1% $2,730,973 +511.6%

1980 - Bottom 50% $16,0742007 - Bottom 50% $14,045 -12.6%


(2007 dollars)

Average Income (AGI) % change1980 -Top 1% $446,507

2007 - Top 1% $2,730,973 +511.6%

1980 - Bottom 50% $16,0742007 - Bottom 50% $14,045 -12.6%



Top 0.01% Income Share 1913 to 2008Top 0.01% Income Share 1913 to 2008

“Striking it Richer:The Evolution of Top Incomes in the United States”Emmanuel Saez, July 17, 2010http://www.econ.berkeley.edu/~saez/saez-UStopincomes-2008

The eve of the Depression

0.01% of householdsThat’s 1/10,000th! take more than 5%

of total income

This isUNSUSTAINABLE

0.01% of householdsThat’s 1/10,000th! take more than 5%

of total income

This isUNSUSTAINABLE

The Wealthiest 1% (80,000 households) together pull in

over $200 billion annually, more than 1/3rd of all income in NY.

The state budget deficit is 5% of $200 billion ($10 billion).

Source: James Parrott, Ph.D., “Grow Together or Pull Farther Apart? Income Concentration Trends in New York,” Dec. 13, 2010, Fiscal Policy Institute

The Wealthiest 1% (80,000 households) together pull in

over $200 billion annually, more than 1/3rd of all income in NY.

The state budget deficit is 5% of $200 billion ($10 billion).

Source: James Parrott, Ph.D., “Grow Together or Pull Farther Apart? Income Concentration Trends in New York,” Dec. 13, 2010, Fiscal Policy Institute

Top 1% Income Share 1914 to 2006Top 1% Income Share 1914 to 2006

^ ^ Eisenhower Reagan

Growing income inequality

More income inequality means more health and social problems

More income inequality means more health and social problems

Productivity and hourly compensation Productivity and hourly compensation growth, U.S., 1973-2004growth, U.S., 1973-2004

Figure 3N from: Mishel, Lawrence, Jared Bernstein, and Sylvia Allegretto, The State of Working America 2006/2007. An Economic Policy Institute Book. Ithaca, N.Y.: ILR Press (Cornell University), 2007.

http://creditwritedowns.files.wordpress.com/2008/10/household-debt-vs-savings.png

Why do they say “the recession is over”?

Slide courtesy of Mark Brenner, Labor Notes

Financiers’ bonuses: billions and billions and billions

Slide courtesy Mark Brenner, Labor Notes

No such thing as “trickle down!”

As the rich have gotten richer and the poor poorer,

tax breaks for the wealthy and their corporations have

set us up for state fiscal crisis.

Corporate taxes have gone down for 75 yearsShifting burden off corporations and onto individual taxpayers.

Corporate taxes as a percentage of total taxes.

Corporate taxes have gone down for 75 yearsShifting burden off corporations and onto individual taxpayers.

Corporate taxes as a percentage of total taxes.

Graph courtesy Mark Brenner, Labor Notes

“In 1972, New York State had a personal income tax with 14 brackets, ranging from a

low of 2% to a high of 15%

New York now has a 5-bracket / 5-rate system.

All five of New York's current rates arebetween 4% (the current lowest rate) and

6.85% (the current highest rate).”

Source: Frank Mauro, “A Little Bit of Tax History,” Fiscal Policy Institutehttp://www.fiscalpolicy.org/taxhistory2.htm

“In 1972, New York State had a personal income tax with 14 brackets, ranging from a

low of 2% to a high of 15%

New York now has a 5-bracket / 5-rate system.

All five of New York's current rates arebetween 4% (the current lowest rate) and

6.85% (the current highest rate).”

Source: Frank Mauro, “A Little Bit of Tax History,” Fiscal Policy Institutehttp://www.fiscalpolicy.org/taxhistory2.htm

Reinstituting the 1972 income tax structure

would yield $8 billion more in income tax revenue for

New York,

while reducing income taxes for 95% of us!

http://www.fiscalpolicy.org/taxhistory2.htm

Lost revenue: billions & billions & billionsNY’s tax-cutting binge from 1994-2000, has lead to the current fiscal crisis.NY’s tax-cutting binge from 1994-2000, has lead to the current fiscal crisis.

“Back on Track: Why Progressive Tax Reform is an Essential Part of New York’s Budget Solution,” March 2009, Fiscal Policy Institute

http://www.fiscalpolicy.org/CWFandFPI_BackOnTrackPersonalIncomeTaxReform_20090323.pdf

• The tax cuts enacted since the mid 90’s continue to have a negative impact on state revenue.

• In this fiscal year these tax cuts have reduced revenue by $13.5 billion.

• This means if we had the same tax rates as the mid 90’s we would have a $3.5 billion surplus rather than a $10 billion deficit.

• Only the wealthiest New Yorkers have benefited from these tax cuts as the rest of us have seen property tax increases wipe out any savings we have received from reduced income tax rates.

• Reinstituting New York’s 1994 tax structure would yield $13.5 billion in annual state revenue.

• The tax cuts enacted since the mid 90’s continue to have a negative impact on state revenue.

• In this fiscal year these tax cuts have reduced revenue by $13.5 billion.

• This means if we had the same tax rates as the mid 90’s we would have a $3.5 billion surplus rather than a $10 billion deficit.

• Only the wealthiest New Yorkers have benefited from these tax cuts as the rest of us have seen property tax increases wipe out any savings we have received from reduced income tax rates.

• Reinstituting New York’s 1994 tax structure would yield $13.5 billion in annual state revenue.

If New York’s corporate tax breaks wererestored to 2000 levels, the state would have

an extra $1.3 billion annually.

But, Gov. Cuomo wants $450 million in concessions

from public employee unions.

New York’s temporary high-income tax surcharge:

• Enacted in 2009 due to the financial crises of ‘08-’09

• Impacts those who benefited from Bush tax cuts

• Created 2 new tax brackets at the top for 3 years: 7.85% for married taxpayers making $300,000 and 8.97% for those with over $500,000 in annual income (instead of the top rate of 6.85%*). *6.85% is the top tax rate in NY. You reach it if you’re single and make over $20,000 or married and making over $40,000!

• In effect for ‘09, ’10, ‘11: set to expire at the end of this year

• Gov. Cuomo steadfast AGAINST continuing it

• Keeping this tax would bring $5 billion in revenue next year

New York’s temporary high-income tax surcharge:

• Enacted in 2009 due to the financial crises of ‘08-’09

• Impacts those who benefited from Bush tax cuts

• Created 2 new tax brackets at the top for 3 years: 7.85% for married taxpayers making $300,000 and 8.97% for those with over $500,000 in annual income (instead of the top rate of 6.85%*). *6.85% is the top tax rate in NY. You reach it if you’re single and make over $20,000 or married and making over $40,000!

• In effect for ‘09, ’10, ‘11: set to expire at the end of this year

• Gov. Cuomo steadfast AGAINST continuing it

• Keeping this tax would bring $5 billion in revenue next year

Even with the surcharge on wealthy incomes, the richest 1% still pay a smaller percentage in taxes than the rest of us.

Janitors and security guards at the Helmsley Building pay a larger share than the building’s residents!

Catherine Rampell, "The Little People Pay Taxes," New York Times, February 23, 2011http://economix.blogs.nytimes.com/2011/02/23/the-little-people-paytaxes/

•State employees are not the cause of this crisis

•State employee compensation did not cause the crisis

State Payroll Disbursements since 1985 adjusted for Inflation.

Payroll disbursements have not grownPayroll disbursements have not grown

New York does not have more state employees than other states.

NYS has 150.2 state workers for every 10,000 persons living here

New York is 31% LOWER than the National AverageNew York is 31% LOWER than the National Average

NYS government agency Full Time Equivalalents (FTEs) dropped 24% since 1988.

We have been doing “more with less” We have been doing “more with less” for a long time now!for a long time now!



•State employee wages and benefits (not just union members) amounts to LESS than 14% of total state expenditures.

•Even if New York laid off half its workforce the present deficit would not be closed!

Matched for age, gender and education we are NOT better paid than those in the private-sector

Jeffrey H. Keefe

http://epi.3cdn.net/1c76a91816cb93c747_uum6b5slz.pdf

QuickTime™ and a decompressor

are needed to see this picture.






Jeffrey Thompson & John Schmitt:

"The Wage Penalty for State and Local Government Employees in New England," September 2010

Political Economy Research Institute, University of Massachusettsand Center for Economic and Policy Research

http://www.cepr.net/documents/publications/wage-penalty-2010-05.pdf


Public vs. private In the public sector, entry-level jobs for those with a high school education, tend to

come with benefits and a livable wage. In the private sector, entry level jobs for those coming out of high school tend to be temporary-part time jobs, without benefits and

starvation wages. Advanced skills and degrees get you quickly to the wage ceiling in the public sector. In the private sector the sky is the limit. The wage structure of the

private sector should emulate the public sector, not the other way around!



•What is in the budget the Governor signed?

What’s in the Budget?What’s in the Budget?

Public Employee unions would have to make Public Employee unions would have to make over $1 billion in concessions in SFY 2011-over $1 billion in concessions in SFY 2011-2012 to avoid all layoffs2012 to avoid all layoffs

Layoffs dictated by the Budget (at Layoffs dictated by the Budget (at least 1,750 on top of the 9,800 least 1,750 on top of the 9,800 threatened!) threatened!) will make it more difficult will make it more difficult for New York to emerge from the for New York to emerge from the recession.recession.


Public Employee unions would have to make Public Employee unions would have to make over $1 billion in concessions in SFY 2011-over $1 billion in concessions in SFY 2011-2012 to avoid all layoffs2012 to avoid all layoffs

The Medicaid and Education aid cuts The Medicaid and Education aid cuts will result in even more layoffs and in will result in even more layoffs and in turn turn an even greater loss of private an even greater loss of private sector jobs.sector jobs.


The Governor has now started layoffs and has The Governor has now started layoffs and has threatened up to 9,800 layoffs unless the threatened up to 9,800 layoffs unless the unions give $450 million in concessionsunions give $450 million in concessions

On top of an inadequate total state On top of an inadequate total state budget, the Governor demands $450 budget, the Governor demands $450 million in concessions million in concessions recurring over recurring over each of the next four yearseach of the next four years from New from New York’s workforce.York’s workforce.

What’s in the Budget? What’s in the Budget?

The Governor has now started layoffs and has The Governor has now started layoffs and has threatened up to 9,800 layoffs unless the threatened up to 9,800 layoffs unless the unions give $450 million in concessionsunions give $450 million in concessions

9,800 state employee layoffs will 9,800 state employee layoffs will result in the loss of over result in the loss of over $2 billion in $2 billion in economic activity and the loss of a economic activity and the loss of a total of 28,000 private sector jobstotal of 28,000 private sector jobs (two year impact).(two year impact).

The state budget The state budget is ominous is ominous

for all New Yorkers,for all New Yorkers, not only not only

public sector public sector union members.union members.

It can’t happen in New York?It can’t happen in New York?

We must defend the We must defend the Triborough Amendment!Triborough Amendment!

1967 Taylor Law prohibits 1967 Taylor Law prohibits public employee strikes.public employee strikes.

Triborough Amendment Triborough Amendment added to the Taylor Law in 1982added to the Taylor Law in 1982

(with the support of the Governor)(with the support of the Governor)

The Triborough Amendment The Triborough Amendment keeps all aspects of the current keeps all aspects of the current

contract in force until a new contract in force until a new contract is negotiated.contract is negotiated.

Contrary to the propaganda that it gives Contrary to the propaganda that it gives unions an unfair advantage, theunions an unfair advantage, the

Triborough Amendment in fact establishes a Triborough Amendment in fact establishes a labor-management balance of power and has labor-management balance of power and has

prevented strikes.prevented strikes.



Our counter-Our counter-offensive…offensive…



Our counter-Our counter-offensive…offensive…

Alternatives to layoffs and cutbacks:

Stock Transfer Tax ($16 billion): A tax of 1/20th of one percent each stock trade, on the books since 1915 but fully rebated to stock traders since 1981. This tax would have brought in $16 billion in 2009 if it wasn’t given back.


Bankers’ Bonus Tax ($10 billion): $20 billion in bankers’ bonuses in 2009, according to the state Comptroller: one-half of this will : one-half of this will balance the state budget!balance the state budget!


More Progressive Income Tax ($8 billion): According to the Fiscal Policy Institute, if New York State went back to the progressive income tax structure of 1972, the state would raise $8 billion more in revenue while giving 95% of New Yorkers a tax cut.

At Least:

Keep the surcharge! ($5 billion): Higher tax brackets of 7.85% on income between $200,000 and $500,000 and 8.97% on income over $500,000 are set to expire. These temporary tax rates bring in $5 billion a year but Gov. Andrew Cuomo has promised to eliminate them!

Dare We Say It?

Single payer health care would liberate $25 billion* in health spending in New York State! *(Money now wasted on overhead and profiteering.)

And…

End the wars! Bring them home now! Cost of the Iraq war alone to New York taxpayers over $47 billion and counting.

Organize! Mobilize others! Join in protest!

Defend our unions!

(and share this data)

News & Politics

N.Y. State is NOT broke!