by Raymond J. Keating
August 30, 2004
New York City has careened from budget crisis to budget crisis for decades. Each crisis has led to a ratcheting up of taxes and reduced economic freedom for New Yorkers. As an entrepreneur, Mayor Michael Bloomberg might have brought innovative changes to the city's fiscal policies, but he has pursued anti-growth tax increases that the city cannot afford in the increasingly competitive global economy. New Yorkers have faced increases in property taxes, income taxes, sales taxes, and tobacco taxes under Bloomberg. The mayor argued that tax hikes were needed to balance the budget. But the mayor's latest projections show that a large budget gap will open again in fiscal year 2006. Clearly, recent large tax hikes have not solved the city's deficit problem, yet some officials are already pointing to the future budget gap as an excuse for further tax increases. Budget cuts represent a formidable challenge for New York policymakers but are necessary if the city wants to reestablish itself as a leading center of growth and opportunity in America. The city can no longer coast on its impressive business history and must cut taxes to attract new employers. Mayor Bloomberg and other officials need to find creative ways to downsize the budget to increase private investment in the city and the economic freedom of New Yorkers.