Crain's Business Breakfast
October 5, 2010 I'm Carl Paladino. I'm a builder, not a career politician. I may not always say things in the most delicate or diplomatic way, but I will always tell you the truth and the truth is New York State is in a death spiral.
Our economy is being choked to death by high taxes, spending and debt are wildly out of control and politicians in Albany would steal a hot stove. On those rare occasions when Governor Paterson has asked for budget cuts, our legislature, controlled by giant public employee unions, simply refuses. Their votes having been bought by union campaign contributions.
I want to use this opportunity to tell you a little more about my thoughts on bringing our government under control.
I've said I'll cut taxes by ten percent, cut government by twenty percent, provide our businesses relief from the onerous taxes and regulations strangling them today - and I'll cut Medicaid by twenty billion dollars.
New Yorkers across the State are saying, great ideas, Carl - but can you do it?
My answer is an unequivocal yes. Absolutely, positively and let me tell you how.
Andrew Cuomo wants to maintain the status quo on the MTA Payroll Tax. Did you know if we repeal this onerous tax, taxpayers would save one-and-a-half billion dollars every year? I will start by repealing this tax burden on the suburban taxpayers who don't benefit from the tax and who will save a good portion of that money. In my administration, I will pay for it by cleaning up the waste, fraud and abuse at the MTA to assure taxpayer money is not flushed down the MTA toilet like it is today.
MTA is a mess and I'll reform it.
Cuomo says he wants to slow the growth of personal income taxes. That's more career politician double-talk - what he means to say is he'll raise taxes. Me? I will cut personal income taxes across the board.
Last year Albany raised income taxes ten percent, with a sunset in 2012. I will accelerate that sunset to 2011 and I will continue to cut taxes every year.
Will Andrew Cuomo make that unequivocal statement? Don't count on it.
Cuomo wiggles around on corporate taxes too. He says he wants to freeze current corporate income tax rates and create a new refundable tax credit for newly hired workers. How will this work in today's economy, where the government designed by Andrew's father, is driving jobs out of the state every day?
I will eliminate corporate franchise taxes and capital gains taxes drowning our manufacturing businesses today, not just freeze them. This will save New York manufacturing businesses one billion annually. This means real jobs.
As governor, I will also work to require supermajority approval for any tax increases to insure the tax cuts we impose stay in place long after I'm gone.
When it comes to state spending, I will cut twenty percent from the general fund over an approximate two year period. Based on the 2011-2012 budget, projected to be sixty-six billion dollars, I will cut seven billion dollars in 2011-2012 and seven billion dollars in 2012-2013 to achieve fourteen billion dollars, or approximately twenty percent in budget cuts.
First, to stop the bleeding right away, I will implement a broad cap on state spending and freeze hiring. Andrew Cuomo says he wants to slow State spending - in human language - he wants to increase spending. I want to cut it.
I've pledged to cut the state bureaucracy as governor. I will immediately lower the compensation costs of all non-union personnel by ten percent and require employee contributions to healthcare and pensions.
I've already asked the state workforce to give me their suggestions on how to make offices more efficient and effective. I've asked them to tell me where the political class are woven into the fabric of our government. These exempt patronage workers will go.
I will examine and privatize management of state assets and functions - like the OTB - that have no business being run by government anyway. The profits after management fees, of course, would remain government revenue.
I will create a Sunset Review Commission to review twenty-five percent of state programs and agencies each year and recommend elimination or consolidation of these agencies and programs. In my view, plenty of unnecessary departments and agencies can be eliminated, even in my first budget.
For example, eliminating the Adirondacks Park Agency, the Lower Manhattan Development Corporation, the Division of Housing and Community Renewal and the Department of Economic Development - which ought to be renamed the Department of NO Economic Development - would save taxpayers nearly a billion dollars.
There are many more. What little valuable functions these taxpayer sinkholes conduct will be absorbed into other departments.
And pensions. What a mess. All those chickens are coming home to roost. I will work to create a new pension tier including an annual cap on benefit amounts and a higher retirement age. I'll change the base from "best three years," to the "entire career" and require employee contribution.
No more pension padding. New York taxpayers are drowning in it.
No more defined benefit plans; the taxpayers want a defined contribution plan. We will immediately change the pension plans for non-union exempt employees to defined contribution.
Property taxes are not a state function - but state mandates run up property taxes to today's record levels. I support a broad cap on property taxes including school taxes without exceptions.
I know, this sounds a lot like Andrew Cuomo - if you think you can believe him - but I support capping before cutting just as I support learning to walk before you run.
Here's the basis of my platform; our state needs to be running, not walking. So I will set a cap and then move resolutely to cut state spending deeply.
In my mind, capping is gutless - cutting takes courage - and courage is what I bring to the table.
I will require a freeze on property taxes for a two-year period while we restructure New York State finances. Then, in response to cuts in Medicaid spending and transformation of our inefficient public schools, actual real property tax reductions can be realized.
On schools: My idea is to bring school spending in line with the national median.
I will allow for regional contract negotiations, work to repeal the Triboro Amendment and institute a salary freeze on the entire education system until we can bring it back in line.
And I will work to consolidate maintenance to operations, keeping curriculum and policy decisions at the local school board. In some counties, this could eliminate one hundred or more redundant school superintendents and vice-superintendents, who are the highest salaried employees in the system.
When it comes to Medicaid, New York State spends more than any other state per capita. And California, the second worst state, has half the size of our spending on Medicaid.
Clearly, our Medicaid costs are out of control. It will be a multi-year challenge to unwind this complicated mess.
My goal is to bring New York's spending in line with the national median. I will cut spending by revising reimbursement rates. I will also cut optional services down to the California level, hardly an inhumane move.
I will promote managed care and innovative solutions, like home care for the ill and the elderly, to stop forcing families to drop grandparents off at the nursing home. This can save more than fifty percent of the cost of long term care.
The big money lobbyists donating to Andrew Cuomo's campaign won't like this much, but he's beholden to them, I'm not.
And you can bet I will increase investigations of waste, fraud and abuse. As Attorney General, Andrew Cuomo has practically ignored this core function of his office.
In Chemung County, County Executive Tom Santuli has a computer program that detects fraud and abuse which has enabled him to cut county expenses by forty-two percent.
Do you know he took that computer program to Albany seven months ago and showed them how the program worked? Paterson and his guys said - Great! We'll get right back to you.
Tom is still waiting by the phone seven months later.
I will pursue administrative streamlining and form a "BRAC Commission" type of approach for Medicaid reform. Just like they carefully closed the military bases we no longer needed after the Cold War, we will carefully scale back Medicaid spending.
I will institute tighter regulations and more investigation of asset transfers for eligibility purposes and spousal refusal.
Any talk of Medicaid begs for a frank discussion about Obamacare. Anyone who tells you anything different is probably serving as Attorney General.
Clearly, the President is trying to turn the whole country into New York. But he will he will also make it much worse here in New York for the working man.
Unfortunately, the Obama Administration seems to view healthcare as simply a cost. Obamacare aims to restrict overall healthcare spending, even as it seeks to expand the number of those covered. Meantime, the trial lawyers are still free to wreak their havoc, hampering research at every step. It's easy to see how this leads to deteriorating care for rich and poor alike.
Obamacare is a disaster for the whole country, but the damage is especially great in New York, where the healthcare sector - medical schools and their affiliated hospitals and research centers - accounts for one out of every thirteen dollars in our economy, as well as one out of every eleven jobs.
Today, dozens of states have joined a lawsuit to stop Obamacare. Every single one of these forward-thinking states know their populations will bear an unfair burden. Where is Andrew Cuomo on this? He won't come out and say whether he is for or against Obamacare. Where are you Andrew?
I think of healthcare as more than just a cost or benefit. I see healthcare as a cylinder in the engine of economic recovery in New York.
Not mere maintenance care, but the kind of scientific-medicine-based care that heals and cures - and extends the productive life of all Americans. For example, if we could cure or even push back the onset of Alzheimer's Disease, people could work longer if they wanted to. Would that save money? Of course it would.
Alzheimer's is projected to triple or even quadruple in the next forty years. Given the epidemic-like rise, a cure would be not only compassionate, it would be a lot cheaper than maintenance care.
The polio vaccine provides a 20th Century example. It would have been hideously expensive over the last half century if we were caring for millions of Americans in wheel chairs and iron lungs. Instead, we developed the polio vaccine in 1955. Ever since, not only have Americans been far healthier, but we have saved vast amounts of money.
Jonas Salk, creator of the vaccine, was born in East Harlem, attended New York City public schools. Yet even after decades of failed public leadership here in New York State, we still have the greatest collection of minds anywhere in the world.
So, with the right policies, better tax laws, better coordination of research, even a comprehensive "legal enterprise zone" to protect researchers and entrepreneurs from opportunistic tort lawyers, the breakthrough we need on Alzheimer's would quite likely come from New York State.
It would come from an established company such as Pfizer here in New York City or maybe from a new startup in Long Island, where entrepreneurship is alive and well. There are plenty of other killer diseases too, from cancer to Lou Gehrig's Disease, which should be similarly targeted.
Let's do it now and let's do it here in New York. Let's make and sell next-generation wonder drugs and export them to the world. Let's generate right here, cure-related jobs and profits.
Now, many of you are going to say, Carl, this all sounds great, but how will you get the legislature to buy it. I'll tell you how. If I can't get them to see the light, I will get them to feel the heat. You see, the people are mad as hell and they aren't going to take it anymore. Legislators who won't back reform will find themselves out of the legislature unless they get on board. You see, I also have lobbyists to work over the legislature. My lobbyists are called, "The People."
Let me summarize, it will take bold action to get New York moving again. I don't agree with those who say our problems are intractable, who say New York's best days are behind us. We can restore economic opportunity, growth and prosperity to New York State. I have a plan, a bold and innovative plan, and I am ready to lead.