New York Says NO to Budget Cuts
A Statement from the NYC Local of the Socialist Party USA

The NYC Local of the Socialist Party USA protests against the budget cuts proposed by New York State Governor David Paterson. Paterson's proposal seeks to shift the burden of the financial crisis onto poor and working class New York through deep cuts in education, healthcare, transportation and social services. The billion dollar deficits
racked up by NY State are a consequence of the decimation of the manufacturing sector, yearly tax cuts for the wealthy and financial concessions made to corporations by Democratic and Republican administrations over the last three decades. The proposed budget cuts send a clear message to the poor and working class New York - your interests are secondary to those of corporations and the wealthy.

Paterson and his predecessors in Albany have assisted in transforming New York into a monocrop economy. 20% of New York State and 33% of New York City tax revenues come from Wall Street. The securities industry alone accounts for 70% of financial sector tax revenues in New York City. Due to the current global economic crisis, tax revenue from the top 20 corporate taxpayers is projected to fall by $81 million. Wall Street bonuses, another critical source of revenue, are projected to fall by 43%. As a result of the immediate decline in revenue and the long-term structural weakness of the economy, New York State budget deficits are expected to balloon to $47 billion over the next four years.

These numbers are not at all surprising. Monocrop economies always face extreme consequences when markets for their products contract. Allowing 20% of the budget of a state with a population of 19 million people to come from an industry as small (300,000 workers) and volatile as the financial sector is reckless. New York used to have a healthier economic mix which including a base in manufacturing. Throughout much of the 1970s, for instance, the financial sector constituted only 4% of overall tax revenues for New York City. Corporate downsizing in the name of capitalist globalization in a variety of industries in the 1990s devastated large swaths of the Upstate and Downstate economy. Instead of attempting to stem this tide through measures such as punitive taxation on corporations looking to exit the region, Democrats and Republicans offered tax breaks and concessions to financial sector companies.

Financial concessions feed the logic of budget cutting. Liberal Democratic Governor Mario Cuomo initiated the process of cuts in 1989 by targeting public education and social services. The trend continued with Republican Governor George Pataki who combined cuts with deregulation and reductions in a variety of taxes. New York had a brief respite from cuts in the late 90s and into the beginning of the 21st century as the financial and real estate bubble economies expanded. We are now left with the consequences of the failure of this period – a deeply unfair tax structure, an economy with a deep dependence on Wall Street and new rounds of budget cuts.

The children of the financial company CEOs will not attend class in a trailer that passes for a New York City public school. They can afford the highest level of health care offered by the marketplace. Their chauffeur's wisk them past dilapidated subway stops. Their older relatives are cared for by privately contracted health aides. This is not the reality of poor and working class New York. We are already among the 2.6 million New Yorkers who cannot afford health insurance. We use buses and subways to make our way around the city. Our children go off to overcrowded and under funded schools and depend CUNY and SUNY for higher education. Our elderly need state support to maintain their quality of life as they age. Cutting the budget means cutting out things that should be our human rights.

The NYC Local of the Socialist Party USA not only opposes placing the burden of the state's fiscal crises on the backs of poor and working class New York, we propose positive solutions to address the fiscal imbalances created by Democratic and Republican politicians. Immediate financing for the budget deficit can come from a "millionaires tax", a 1% income tax increase on all wealth above the amount of $1 million dollars. Taxing the rich in this manner puts their idle wealth back into circulation through state spending which goes directly into the local economy. This is, instead of budget cutting, a much more effective way of combating recession. Longer term deficit reduction would come through the implementation of higher taxes on capital gains, the creation of a progressive tax structure and a small tax on stock and bond transactions in the state. Funds should also be made available in the form of low-interest loans and grants to non-profit enterprises who propose plans for green-manufacturing projects in New York State. Finally, New York State spending burdens could be greatly reduced by the creation of a national health insurance system as outlined in the bill H.R. 676.

Such a radical restructuring of the New York State economy will only be made possible by the creation of broad social movements capable of mobilizing New Yorkers in support of economic justice. The NYC Local of the Socialist Party USA therefore encourages immediate acts of non-violent protest to defend education, healthcare, transportation and social services. All of these are our rights as human beings and are fundamental to the creation of a democratic socialist political project.

The Socialist Party USA says:
No to budget cuts!
Yes, to fighting back!
Tax the rich to clean up their mess!

For more information on socialist strategy and our larger analysis of the financial crisis we invite readers to visit the websites of our national SP-USA and the NYC Local: