Collapse of a County

by Michael I. Niman, ArtVoice 2/24/05

Prelude

This is a story about Erie County, New York – home to the city of Buffalo. Recently, Erie County closed all of its parks, fired all the school nurses, shut down all of its public health clinics, severely curtailed snow plowing and police patrols, defunded the arts – and basically eliminated most of what is good about government. Erie County’s story is America’s story. Every local government in the United States is facing similar challenges in the Bush economy.

Blame Hillary, Not the Poor

Since Ronald Reagan became president in 1980, the number of Americans forced into bankruptcy by health care expenses has shot up more than 2,200 percent. We can now add the government of Erie County to that statistical heap of fiscal carnage—taken down by skyrocketing Medicaid costs.

The roots of Erie County’s problems lie in the United States’ unique position as the only industrialized nation without a national health care program. Republicans have historically opposed government funded universal health care, referring to it as “socialized medicine.” Democrats such as Hillary Clinton, rather than champion the right to health care taken for granted by citizens in other countries, instead fought for a compromise plan that would keep private insurers in the picture, thus making universal health care an expensive bureaucratic nightmare. In the end, voters decided they’d rather spend their money killing Iraqis than giving themselves health care.

This brings us to Erie County’s problem. With no national health care program in place, state and local governments are left paying the bill to provide basic minimal health care to indigent residents. The typical knee-jerk (emphasis on the “jerk” part) reaction is to blame the poor—as if they’ve chosen to be both poor and sick, leaving the rest of us to pay for their enviable sojourns to the doctor. This “I’ll never be poor so why should I give a fuck about the poor” attitude, aside from its moral repugnancy, also misses the point that Medicaid isn’t just for the untouchable class born into poverty—it’s also for middle and upper-middle class people impoverished by disease. It works like this: first you get sick—too sick to work —then you lose your job. Barbaric as it sounds, when Americans lose their jobs, they usually lose their health insurance, if they had any to begin with. After they spend their life savings on health care, in kicks welfare and Medicaid to provide the bare medical essentials and keep the rest of us from having our quality of life diminished by the sight of sick, dying beggars living in the streets.

Erie County is demographically a bit poorer and sicker than other places, hence our welfare and Medicaid costs are higher—and here’s the rub—our overall income tends to be a bit lower than wealthier healthier places who can better afford to help the poor and sick. For example, Erie County’s per capita income of $20,357 is about $3,000 lower than the New York State average of $23,389 and almost $2,500 lower than that of Rochester’s Monroe County.

The problem is exasperated by the fact that the pharmaceutical industry is a major source of campaign funds for both the Democratic and Republican Parties. Therefore, politicians are loath to reign in skyrocketing drug and health care costs, since they’re, well, whores on the corporate payroll. Hence, the cost of health care is out of control, as evidenced by the fact that Erie County’s share of Medicaid costs is rising at about 11 percent per year.

Why Erie County is Unique

The fact that local governments have to pay for skyrocketing indigent health care costs because our federal taxes are squandered on war doesn’t explain Erie County’s rather unique situation among equally challenged counties. This county’s problem is more complicated—and here’s where the local Republicans and Democrats enter the picture. First there are the Republicans. Republican County Executive Joel Giambra, faced with long-term projections of rising costs, and enjoying a relatively small budget surplus inherited from his predecessor, decided to cut property taxes by 31 percent. Woweee! We all cheered that year. Since Giambra’s tax cut kicked in, however, our entire tax levy has fallen below the basic cost of paying the county’s Medicaid bill. Of course, none of this should have come as a surprise to anyone.

Then there’s the “spend like drunken sailors” ethos of county government. Here’s where the Democrats jump into the sack with their Republican floosies. The Democrats and the Republicans in county government view our tax dollars as pirate’s booty to be divided among the crew. In a system we call “patronage,” they openly hire their often-incompetent cronies for county jobs—often creating specific jobs for specific cronies, where there was previously no job and no need for a worker. In extreme cases, our elected officals go as far as to hire their political enemies in an effort to silence or otherwise neutralize them.

Rather than keeping each other in check, the Democrats and Republicans have formed into two opposing teams both playing in the same game. When Democrats learn of an incompetent Republican hired or promoted into a county position, rather than blow the whistle and demand prosecution for misappropriation of tax funds, they instead use the information as leverage to get one of their own incompetent cronies hired. The Erie County District Attorney, who is now bellowing against making cuts to his staff, turned a blind eye to this misappropriation of public funds during successive Democratic and Republican administrations. The result is an obese kleptocratic county government. The Medicaid problem is so big, however, that even if our county government was lean, mean and honest, we’d still be facing most of the budget shortfalls that we’re currently facing.

The Socialism of Snow Plowing

The solution proposed by the County Executive and much of the legislature is to raise the county sales tax to a point where the combined state and county levy would add up to 9.25 percent. The problem here is that this is what we call a “regressive tax,” in that it falls disproportionately upon the poor. When a working single parent or a welfare recipient buys diapers or toilet paper, they would pay the full 9.25 percent. When a wealthy person pays the rent on their luxury condo or the mortgage on their second home, there is no sales tax. When they do pay sales tax, they would pay the same 9.25 percent as do paupers.

The supposed alternative to this regressive sales tax is what the County Executive calls the “red budget.” It’s a draconian and rather arbitrary series of cuts that essentially shuts down most of county government, while, ironically, leaving many of the heavy patronage hitters wallowing in their pricey county jobs. Today we’re living under the red budget. Two thousand mostly hard working, mostly essential county workers are being laid off. Gone are school health programs, senior programs, the public health lab, the rodent control bureau, the STD clinic, community heath clinics and programs for handicapped children, for starters. County parks and auto registration bureaus are now closed. Potholes are going unfilled. Sheriffs are being laid off. The socialism of snow plowing on county roads is being reigned in. And forget the arts.

In essence, this is the radical Republican agenda – to do away with most government services while maintaining a strong military. It’s unpalatable on face value. But as I’ve written previously, the public will begrudgingly accept it as the inevitable outcome of government bankruptcy – without questioning why every level of government seems to be going bankrupt.

In the case of Erie County, the cuts even hit favored Republican programs that support business development and generate revenue, such as the Convention and Visitors Bureau and the Convention Center. It seems that the only entity spared the axe is our soon to be built government subsidized bait and tackle shop – Bass Pro.

The Invisible Alternatives

There are two other alternatives to closing the county budget deficit that are conspicuously absent in the local media debate. The most obvious solution is to consider restoring the county property tax rate to its pre-Giambra levels and factoring mandated expenses such as Medicaid onto that base. According to the County Executive’s office, a 64 percent property tax increase, amounting to an average of $210 per home, would pay off all Medicaid expenses and allow us to have luxuries like snow plowing, cops, parks and maybe even a smidgeon of culture. This is one responsible, grown-up way of paying our bills. If homeowners don’t like it, they should register to vote and turn their ire toward the real culprits in Washington who are ultimately forcing New Yorkers to choose between having basic services or providing minimal health care to the infirmed poor.

 

When I contacted County Legislature Majority Leader, Lynn Marinelli, she told me that the property tax option was pulled off the table by the Legislature’s Republican Caucus. Hence, she argued, whether or not we should have restored the property tax, is “hypothetical,” since it was not an available option.

The other alternative is a local income tax, already in place in five downstate counties facing similar Medicaid expenses. In the five counties of New York City, this tax ranges from 1.9 percent of income for poor workers, to 5.82 percent for wealthier workers. According to U.S. Census figures, the combined income of all workers in Erie County is slightly over $19 billion. Taxing this income at New York City’s minimal rate of 1.9 percent would raise $364 million—more than three times Erie County’s $108 million budget shortfall (the income rate can be adjusted to be progressive while averaging 1.9 percent). This revenue would not only meet current and future Medicaid obligations, but could at the same time bury the county’s outstanding $386 million debt in less than two years while maintaining Giambra’s 31 percent property tax cuts indefinitely. After two years, the income tax revenue could fund a sales tax rollback while still paying off increasing Medicaid costs!

Marinelli told me that the income tax option also wasn’t on the table – not because the Republicans opposed it – but because it never came up in discussion. She, along with many of her colleagues, seem unaware that an income tax is a viable option already employed for decades in other New York counties as well as in the city of Yonkers.

The Big Question

The big question, then, is why aren’t these two options—property tax hikes and an income tax—part of our regional discussion? Why didn’t county residents discuss these options with the same serious vein in which we discussed the ludicrous “red budget” or the regressive sales tax hike? In a democratic society, shouldn’t we be informed about all of our options?

I mentioned a few weeks ago, in the course of a movie review, how I received a call from a calling machine purporting to be news anchor Scott Levin of Channel Two News. The Levinatron wanted to record my opinion about how to close the Erie County budget gap. Option one was to fire 3,000 county workers. Option two was the sales tax hike. Option three was a hybrid combination of options one and two. And option four was the “I dunno” option. When it came time to speak, I said, “Are those my only choices? What about options five and six – property tax hikes or income taxes?” The Levinatron responded in monotone: “I’m sorry – I do not understand your answer.” We went a few more rounds before the machine cut me off without recording any response. My response, it seemed, was outside of the allowable boundaries of the discussion. I called Channel Two News to verify that this was in fact their Levinatron and not someone else’s “push poll” impinging on the Scott Levin trademark, designed purposely to reinforce the current limited parameters of the debate. Lo and behold, it was their “poll.” And these were the limits our local newscasters used to frame the debate. Likewise, a Lexis/Nexis database search of the Buffalo News for the past six months found that they too failed to report on the income tax option already in place in other parts of the state.

So here we are—with a government that is unable to provide basic services, and with a media unwilling to host a true discussion as to how we got here and what options we actually have to move forward. Then there are the successive bands of criminals that occupy the White House—who are ultimately responsible for this mess.


 


ęCopyright 2005

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