Money And Politics, New York Edition

A big election is only a month away.  Here in New York, the Governor, Comptroller, Attorney General, and the entire state legislature are up for election.  Needless to say, nothing of what I consider important is getting any mention whatsoever.  

The big issues, without question (not in any particular order) are (1) way overspending on K-12 education, almost double the national average per pupil, for far worse results, (2) way overspending on Medicaid, again almost double the national average per beneficiary, with no measurable benefits in life expectancy or any other metric, (3) unsustainable pension promises, and (4) thoroughly incompetent housing meddling leading to artificial shortages and a huge population trapped in "poverty" despite living in housing that costs the taxpayers a multiple per year per beneficiary of what is said to be the poverty level.

We are the highest taxed jurisdiction in the country, and everybody seems to believe that it's because we provide lots of services that other places don't.  Actually not.  Instead, we spend far more money to provide the same services, but of worse quality.  You would think that that would be a gigantic issue in the upcoming election. 

I'm not meaning to be too critical of the Republican candidate for Governor, who is Rob Astorino.  He is a serious and hard-working guy, and doing his best in a tough situation.  But his message is getting completely drowned out in a campaign where the other side has an unbelievable money advantage, highly illustrative of the powers of incumbency in our state where an activist government meddles in everything.

The State Board of Elections publishes information on the fundraising and spending of the two campaigns.  The two reports for the Astorino campaign indicate that he has raised a total of under $5 million for the campaign -- and this is a rather large state.  Currently he has $1.2 million cash on hand going into the last month of the campaign.   Cuomo has raised at least $43.6 million.  Cuomo's list of major donors contains one after another of the large government employee unions and unions (like health care workers) whose jobs are government-funded:  Patrolmens Benevolent Association, Sergeants Benevolent Association, Emergency Medical Services Local 2507, Service Employees International Union, Uniformed Fire Fighters Association, Transit Workers Local 100, etc., etc., etc.  Funny, but I can't find a single union contribution (even private sector) to Astorino down to contributions of as little as $2000.

But that piece of the money advantage is only the beginning.  In a serious contrast from anything I recall from past elections, Cuomo has been completely shameless in spending vast sums of taxpayer money right in the middle of the election cycle to promote his signature programs, and thus to keep himself in the public eye.  According to Capital New York here New York State has spent no less than $161 million during Cuomo's term promoting "business and tourism," large amounts of that prominently featuring the Governor's signature programs with which he has gone to great lengths to be sure his name is associated.

Exhibit A of this vast taxpayer spending in support of Cuomo is something called Start UP NY.  The program is classic New York crony capitalism.  The idea is that if you move a business to New York you can get a ten year exemption from all state taxes.  This has been Cuomo's signature economic development initiative, and he has invested gobs of his time associating his name with it.  For example, here is a video of Cuomo speaking at Cornell University to kick off the Start UP NY initiative.  According to the Capital New York article, no less than $28 million of taxpayer money has been spent on the Start UP NY advertising campaign, recently averaging $5 million per month.  This represents almost as much as Cuomo has spent on his re-election campaign during this period, and a multiple of almost 6 times the total that Astorino has raised.  These taxpayer-funded ads flood the airways every evening, shamelessly promoting the Governor's signature project in the midst of the election contest.  So good luck with your $1.2 million, Rob.

To those who continue the campaign to "get money out of politics" (New York Times? Larry Lessig?  Harry Reid?) I ask, what is your plan to deal with the problem of incumbents causing the government to spend vast amounts of taxpayer money in support of the incumbents and of the ongoing growth of the government?  When you drive all other money out of politics, that will be all that is left, with nothing to counterbalance it.

What's the chance that Cuomo's Start UP NY initiative will have any measurable positive impact on the distressed economy of upstate New York?  I would say about zero.  The various sorts of crony-capitalist initiatives that governments have made to bring business to distressed areas have a history of total and abject failure.  Here is a roundup on the subject by Steve Malanga in the City Journal back in 2005.  From urban renewal to urban development action grants to urban development corporations and in every major city across the country, government initiatives to promote business have uniformly made the situation worse.  By contrast, when New York City's government started focusing on controlling crime and (somewhat) controlling spending and taxes, we suddenly got a massive economic revival in the formerly depressed parts of Brooklyn and Queens, Harlem and the Bronx, almost entirely with private capital.

But Start UP NY is not really about economic revival.  It's about getting lots of taxpayer-funded support for Cuomo's re-election.  Oh, and to the extent that any companies actually move into these tax-free zones, they will be totally dependent on the government program to continue their existence when their tax exemption runs out.  That will be a great source of political contributions!

The best news I can find on the money-in-politics front in New York is that at least one group of players has figured out the game.  According to an article in Chalk Beat back in January, supporters of charter schools had contributed at least $800,000 to the Cuomo re-election even by that date, far outstripping his contributions from the teachers unions.  Actually guys, that was rather strategic!