For many years now, the hefty income taxes paid by a handful of high earners in the financial industry have been helping prop up the public finances of two of America’s most populous and politically powerful states: Big Labor-dominated New York and California.
It is largely thanks to the willingness of executives of banking and investment firms to stay put and keep forking over huge sums of tax money to state and local government coffers, year after year, that the grossly fiscally mismanaged Empire and Golden States have managed to keep their budgets afloat, more or less.
Unfortunately for current union-label Democrat Govs. Kathy Hochul and Gavin Newsom, it seems even state-proud bankers and money managers won’t tolerate getting bilked forever.
On Aug. 21, financial journalists Lindy Lin and Tom Maloney reported for Bloomberg that, over the three-year, three-month period beginning in January 2020 and ending in March 2023, New York and California each lost financial firms managing “close to $1 trillion in assets” due to forced-unionism. Overwhelmingly, these businesses and the jobs they furnish have fled to Right-to-Work states.
In a considerable understatement, Lin and Maloney observed that the financial business and jobs exodus from New York, California, and other government union boss-ruled states in the Northeast and along the West Coast is “straining city and state finances by sapping state revenue.”
Here is a blunter and more accurate way of putting that: As a consequence of the recent departures of firms like Icahn Capital Management, Elliott Management, ARK Investment Management, Allspring Global Investments and Charles Schwab, New York and California politicians will in the very near future have to 1) cut back spending dramatically, 2) find massive new sources of revenue or 3) face fiscal catastrophes.
Of course, since government union chiefs like teachers union bosses Randi Weingarten and Becky Pringle effectively own Albany and Sacramento, significant spending reductions will be New York and California politicians’ last choice.
Indeed, even as the vast depth of the budget shortfalls they face becomes apparent, legislators in both states are continuing to hand out expensive new perks to Big Labor as if they had tax money to burn.
For example, in 2022 union-boss puppets in New York’s capital rammed through, with Hochul’s help, a counterproductive mandatory cap on class sizes that will keep taxpayer costs for Big Apple government schools soaring even though enrollment has plummeted by a flabbergasting 200,000 over the past few years. And now Sacramento’s union stooges are poised to jack up payroll costs for all kinds of businesses by making unionized workers eligible for unemployment benefits whenever they are called out on strike.
Instead of rolling back government union bosses’ special privileges so their states will be able to weather their imminent fiscal storms, Hochul and Newsom are clearly pinning their hopes on President Joe Biden and his ability to shift the costs of their reckless policies to taxpayers across the country — especially taxpayers in relatively fiscally responsible Right to Work states.
This is no pipe dream. It’s happened before. In March 2021, using the COVID-19 pandemic as an excuse, Congress rubber-stamped and Biden signed an omnibus spending bill including roughly $500 billion for government schools and other state and local government agencies that was obviously designed to help Big Labor politicians paper over huge fiscal shortfalls caused by union monopoly-bargaining abuses, not COVID-19.
Fortunately, in the current Congress, unlike in 2021, Biden doesn’t have a Democrat House speaker like Nancy Pelosi around to join with pro-forced unionism Democrat Senate Majority Leader Charles Schumer in helping him get a congressional rubber-stamp for all of his costly handouts to union bigwigs.
But there remains a substantial danger that, once the next Big Labor bailout scheme comes before Congress, it will be adopted with the support of a handful of Republicans from the mendicant states in addition to union boss-backed Democrats from across the country.
To prevent this from happening, it’s critical that concerned Americans start communicating with their elected officials now about why a repeat of 2021’s “American Rescue Plan” fiasco must not happen: The genuine fiscal solution for New York and California is reducing government union bosses’ special privileges so spending can be curbed — and not another bailout from hard-working taxpayers in Right to Work states.
Greer is senior research associate for the National Institute for Labor Relations Research.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact email@example.com
Agree/Disagree with the author(s)? Let them know in the comments below and be heard by 10’s of thousands of CDN readers each day!