The City Budget Should be a Force for Good

June 24, 2013. In an Op Ed, “The City Budget Should Be a Force for Good,” which was recently published by The Chief-Leader, FPI’s Deputy Director and Chief Economist James Parrott argues that the annual budget process should be about planning for the future and not just managing expenditures. He identifies and discusses four areas where the budget can be used to produce meaningful outcomes for all New Yorkers.

  1. The city needs to re-think the social-safety net and policies to combat poverty.
  2. City resources should be used to grow the economy by investing in human capital and infrastructure.
  3. The city should enhance the overall progressivity and efficiency of the city’s tax structure.
  4. Engaging the city workforce is more a question of management than one of budget.

Good fiscal stewardship means not only balancing the budget but investing in long-term solutions, re-thinking spending priorities, and enlisting labor as a partner. A more detailed version of Parrott’s critical analysis of the budget challenges facing the new administration is available on the website of Toward a 21st Century City for All, an initiative of the Center for Urban Research at the CUNY Graduate Center.

Gannett News Service article on “Tax-Free New York” plan cites FPI report

June 23, 2013.  A Gannett News Service article on the NYS legislature’s adoption of a somewhat revised version of Governor Cuomo’s “Tax-Free New York” quotes from FPI’s recent report on this proposal on this proposal:

“New York State’s past experience with geographically-targeted business tax incentives should raise huge red flags regarding the efficacy of the proposal as an economic development strategy,” according to a report last week from the Fiscal Policy Institute, a labor-backed think tank.

The article by Gannett’s Albany Bureau Chief Joe Spector was published by several Gannett newspapers: Ithaca Journal, Elmira Star-Gazette, Poughkeepsie Journal, and the Rochester Democrat & Chronicle.

Report: Immigration Reform Will Create A More Productive Economy

June 19, 2013. Von Diaz reports on FPI’s analysis of the economic effects of immigration reform.

The FPI report perhaps isn’t the most provocative to come out in recent months, but it takes a balanced approach. Kallick doesn’t claim that legalizing undocumented immigrants will be the saving grace of the struggling U.S. economy. Rather, Kallick describes a measured approach, which he believes could lead to greater economic stability.

“I think that people sometimes exaggerate the potential consequences – positive or negative,” Kallick says. “I hope people will feel like there is a clear gain to all of us to having a context in which everyone who’s here has legal status.”

 

Reflejos – on FPI’s recent immigration report

June 16, 2013. A story by Reflejos on the FPI report about the economic impact of immigration reform.

The economic benefits of immigration reform should not be overstated. This would be a big benefit for undocumented immigrants, but would have modest benefits for the overall economy—we’re talking, after all, about just five percent of the overall labor force. But while the benefits should not be exaggerated, they are very real. As Jared Bernstein of the Center on Budget and Policy Priorities put it, “bringing millions of undocumented workers out of the economic shadows isn’t just the right thing to do. It’s the efficient thing to do.”

Fiscal Policy Institute Makes Strong Economic Argument for Reform

June 14, 2013. The blog Redefining Welcome interviews David Dyssegaard Kallick about FPI’s recent report on immigration.

“Legalization is the right thing to do, not least because it is our only practical option. You simply can’t deport 11 million people. But, I think it’s important to know that this will also be good for the American economy. I wouldn’t overstate the gains. Undocumented immigrants make up five percent of the country’s labor force—that’s enough to matter, but not enough to dramatically swing the economy one way or the other.

“That said, a 10 percent improvement in their wages, a leveling of the playing field for businesses in regions and industries with undocumented workers, full and equal participation in systems for taxation and services—those will all help increase economic productivity.”

NY Suburbs Lead in Minority Population Growth

June 13, 2013. A Journal-News analysis of new Census data showed that Westchester, Rockland, and Putnam all saw a significant growth in the non-white share of the population, “some of the largest ethnic shifts in the Northeast.”

“The whole country is diversifying,” said David Kallick of the Manhattan-based Immigration Research Initiative. “The white population is growing older, and the younger population is much more multicultural and multi-ethnic than the older generation. That’s our future, ready or not.”

Growth among Hispanics, African-Americans and Asians is pushing minority populations higher in Westchester, Rockland and Putnam counties and other nearby suburbs.

 

Safe Patient Handling in New York State: An Estimate of the Costs and Benefits of Statewide Implementation

June 13, 2013. Nurses and other health care workers have among the highest rates of on-the-job injuries in New York as a result of moving and lifting patients. This report considers what can be done to reduce patient handling injuries in New York. A number of hospital and nursing home facilities around the country have invested in patient handling equipment that significantly reduces the physical strain on health care practitioners. This equipment results in considerable cost savings in reduced lost work time, reduced turnover and lower workers compensation costs, and means that the equipment costs can be recouped fairly quickly. This report reviews several studies that have evaluated pilot projects where safe patient handling equipment has been put in place, and estimates the costs, benefits and payback period for statewide implementation in New York State of such equipment.  Implementation would also improve patient safety and satisfaction, and encourage nursing retention.

Immigration Reform Would Improve Economic Productivity

June 4, 2013. A new report from the Fiscal Policy Institute shows that legalizing undocumented immigrants, paired with labor standards enforcement, would boost economic productivity. Reform would remove barriers to advancement for newly legalized immigrants, create a level playing field for businesses, and align our systems of taxation, social services, and social insurance so that they would function as they are supposed to.

“Immigration reform, done right, would be good for immigrants, but it would also be good for all Americans,” said David Dyssegaard Kallick, the director of the Fiscal Policy Institute’s Immigration Research Initiative. “I don’t want to overstate the gains—we’re talking about 5 percent of the labor force. Still, those gains are real, and they’re important.”

• Press release — Immigration Reform Would Improve Economic Productivity

• Report — Three Ways Immigration Reform Would Improve Economic Productivity

Groups Say Tax Free-NY is Bad Economic Development Policy, Bad Tax Policy and Bad for New York.

June 11, 2013. Frank Mauro of the Fiscal Policy Institute joined with community, student and labor groups at a press conference in the Legislative Office Building in Albany to urge the Legislature to reject the Governor’s ill-conceived Tax-Free NY proposal.  The press conference was organized by Ron Deutsch, the executive director of New Yorkers for Fiscal Fairness.

Mauro distributed FPI’s new report on the Tax-Free NY proposal at the press conference which was covered by a number of news outlets including the (Albany) Times Union, the Legislative Gazette and several television and radio stations.

Here is the press release from the participating organizations.

Tax-Free New York – Bad Tax Policy, Bad Economic Development Policy

June 11, 2013. This brief concludes that Tax-Free New York is bad tax policy and bad economic development policy. From a tax policy perspective, the Tax-Free NY proposal is inconsistent with the two long-established pillars of tax fairness—horizontal equity and vertical equity.  In addition, New York State’s past experience with geographically-targeted business tax incentives should raise huge red flags regarding the efficacy of the proposal as an economic development strategy.

Besides being diametrically opposed to the principles of tax fairness, the idea of exempting the personal incomes of the employees of favored businesses from the Personal Income Tax would also undercut one of the main arguments for state-level business tax breaks—that businesses receiving those tax breaks might not be paying full taxes but by those businesses locating in our state rather than somewhere else, we benefit from a broader and stronger personal income tax base.

But even if the Tax-Free NY proposal were revised to exclude this unprecedented exemption of favored employees from Personal Income Taxation, it would still have more risks and costs than benefits. The claim that Tax-Free NY proposal has no cost is incorrect for five reasons that are spelled out in this brief. For example, by giving very favorable tax treatment to some business activities, the Tax-Free NY plan would reduce the market share of some existing businesses that do not receive this favored treatment.  This, in turn, will reduce the profitability of those existing businesses and, thus, their tax liability. The favored businesses will not be paying taxes on their covered activities; and the negatively affected existing businesses will be paying less because of diminished income or closure. This will mean some combination of tax increases and service cuts for other businesses and for residents—a costly, downward spiral rather than a no-cost nirvana.

The brief also reviews the state’s experience with two previous experiments with tax-free zones. It concludes that, in retrospect, it is shocking that the Economic Development Zones program was established in 1986 only three years after the failed Job Incentive Program was closed to new entrants. And that now, it is even more shocking that a new tax-free zones program is being proposed only three years after the failed Empire Zones program was closed to new entrants. To paraphrase the philosopher George Santayana, those who fail to learn the lessons of history are doomed to repeat the mistakes of their predecessors. Or, as former Assembly Speaker Stanley Fink frequently said, “Fool me once, shame on you. Fool me twice, shame on me.”

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