When you send your children to school, one of the first subjects they learn is math. At an early age they learn that two plus two equals four. When government officials promote their programs, they attach a cost to them, and in many cases the numbers and the claims don’t add up. We call it fuzzy math.
In Washington, there’s a lot of discussion these days about tariffs. Tariffs are the charges that are imposed on goods from other countries that come into this country, and on our products when they arrive in other countries. If you listen to President Trump, he would have you believe that the federal government is making a lot of money on the tariffs we impose on goods shipped from China, Mexico, Canada and European countries.
The idea that tariffs pour tons of money into the federal treasury is simply false. In fact, if your local plumber pays more for copper piping because of tariffs, he passes that cost on to you. Early in the game, when the increases in tariffs were small, many manufacturers and suppliers decided to absorb the cost. But as the months have gone by and the cat-and-mouse game between China and America has ramped up, businesses aren’t swallowing the costs anymore, so you are paying them.
How about the 2018 federal tax reform bill? The president claimed that only a handful of taxpayers would have to pay any additional taxes. That’s partially true. The very wealthy saw their taxes go down. As to the rest of us, if you live on the East the West Coast, you paid a lot more than ever before this year, and next year things will get even worse. And the tax bill that was supposed to bring in trillions has fallen far short. So much for fuzzy math.
Here in New York state, we are getting a fresh dose of fuzzy math. Recently, there were major announcements that our mass-transit system would be blessed with billions of new dollars to rehabilitate our subways, commuter lines and bus operations. There is no question that the Metropolitan Transportation Authority is desperately in need of money. Long Island commuters want a renovated Penn Station, direct access to Grand Central Terminal, newer cars and better stations.
If you live in New York City, you want modern subways, new buses and reliability. Subway stations are grimy, unpleasant and in many places feel unsafe. There are large parts of the city where the commute to work is measured by hours, not minutes. To be kind, the citywide system is a disaster. The problem is that all of these systemwide improvements are conditioned on getting more state money from Albany and new money from congestion pricing.
The State Legislature is the body that is responsible for setting aside money for our transportation needs. Next year will be a tough one for legislators, because all that money from corporate settlements is gone and tax revenue is down. A growing number of New Yorkers are leaving the state for lower taxes and nicer climate. We’ll miss them, and miss their tax dollars even more.
According to a new congestion-pricing plan, additional revenue will be collected from cars and trucks that use Manhattan streets south of 60th Street. The experts predict that the plan will raise billions of dollars, but there is no accurate way to measure exactly how much will be collected. One thing is certain: Companies that pay extra to deliver food or services to city residents will pass the costs on to consumers.
So, the next time some public official announces a new initiative, make sure to ask how much it will cost and where the money will come from. Note to Sen. Elizabeth Warren: That includes your “Medicare for All” program.
Jerry Kremer was a state assemblyman for 23 years, and chaired the Assembly’s Ways and Means Committee for 12 years. He now heads Empire Government Strategies, a business development and legislative strategy firm. Comments about this column? JKremer@liherald.com.