PRESS RELEASES

Release Date: December 13, 2002
CONTACT: Lenore Neier, CSSNY, 212/614-5425

Community Service Society of New York Warns that Increased Taxes Will Drive the Most Vulnerable New Yorkers into Poverty

CSS Recommends Measures That Can Mitigate Impact on Low-Income Communities

New York, NY, December 13, 2002 – Upon analyzing the Bloomberg administration’s plan to reduce the city’s budget shortfall, the Community Service Society of New York (CSS), a 150-year old anti-poverty research and service organization, has issued recommendations that will help cushion the effects of the proposed tax increases, service cuts and higher transit fares on the city’s most vulnerable communities. CSS recommends:

• A stronger reliance on progressive rather than regressive taxes;
• Providing low-income renters with a tax relief program;
• Ensuring that low-income neighborhoods are not disproportionately affected by the service cuts;
• Federal assistance to offset the impact in the form of unrestricted counter-cyclical revenue sharing.

“CSS recognizes that corrective measures must be taken to deal with the budget shortfall, but what is missing from the administration’s proposals are policies that will protect individuals that are at risk,” stated David R. Jones, president of CSS. “The impact of higher taxes on communities living at the brink of poverty will spell more hardships, hunger and homelessness among poor New Yorkers.”

A recent survey conducted for CSS by Lake, Snell, Perry of 600 low-income New Yorkers found that nearly half of poor New Yorkers faced three or more serious hardships over the past year, including loss of employment, falling behind in rent or mortgage payments, and even postponing needed medical care. “We are concerned that any increased financial strain will tip the balance and push low income New Yorkers over the edge,” Jones commented.

The Bad Gets Worse

We need to rely on progressive taxes - such as the personal income tax - pegged to the earnings of taxpayers, rather than regressive taxes like property taxes to close the budget gap. The Mayor has actually proposed a decrease in the income tax, that would result in the wealthy paying less while the poor and working classes pay more. A transit fare hike coupled with service cuts on subways and buses are also in the works. This is just another form of regressive taxation – where the brunt of the increase again falls on low-wage workers who have no alternative but to pay.

"Unfortunately, when there are budget cutbacks and shortfalls, it is our neediest communities that are the hardest hit," Congresswoman Nydia Velázquez (D-NY) said. "In my district alone, several firehouses were going to close due to lack of funds. I joined with the community to fight against losing these valuable services. But the fight doesn't stop there. Other services -- such as youth programs and senior centers, which serve vital purposes in underserved communities -- are also on the chopping block. "With our economy in a slump and funding being tight, a disturbing trend is developing -- both on the federal and state level -- in which those who need help the most are getting the least."

New York City’s Poor Already Living on the Edge

One-third of New York City’s voting age citizens are considered poor or near poor, with family incomes below 200% of federal poverty level, or about $28,538 for a family of three. According to the CSS survey, nearly half of poor New Yorkers living below the federal poverty level endured at least three serious hardships during the past year. Twenty-nine percent lost their jobs; 25% postponed or failed to get needed medical care; 22% went hungry because they lacked money to buy food; 31% fell behind in rent; 23% reported having their utilities or phone turned off.. Even among the 42% who were working full time, employment was not enough to protect many from experiencing serious hardships.

“We must protect the 27% who already are in rent arrears. The proposed property tax hike will force low-income families out of apartments, shrinking the amount of affordable housing in the city. The result will be a spike in homelessness at a time when the homeless population is at an all-time high,” said Mr. Jones.

Low-income families and people on low fixed incomes should be exempt from the increase. There is precedent for such an exemption. The Senior Citizens Rent Increase Exemption – SCRIE – was instituted by the New York State Legislature to provide exemptions from all or some increases in rents or carrying charges for New Yorkers 62-years or older, with yearly incomes below $20,000. According to CSS, there is the danger that by instituting a high property tax, we will revert back to the 1970’s when disinvestments, rent arrears, and abandoned housing were rampant.

“With the possibility of the increase in the number of desperate families living on the streets and proposed cuts to the police force, we could see an increase in crime, landlord neglect resulting in additional housing slipping into disrepair and an overall decrease in New York City’s quality of life,” stated Jones.

Federal Help

New York, along with other states facing similar revenue shortfalls, can only address the deepening budgetary problems by spending cuts and tax increases that will likely deepen the recession. New York financier Felix Rohatyn, was quoted by The New York Times as saying “…if states are left to their own devices to close their gaps by cuts and by taxes, it’s going to be very deflationary and recessionary.” The federal government should see the states through this crisis by providing aid in the form of a counter-cyclical revenue sharing program.

For over 150 years, CSS has pursued a mission that is aimed at the poor but which benefits all: to identify and eradicate the problems creating and perpetuating poverty in New York City. CSS is an independent, nonprofit organization that assists those in need to defeat the problems of poverty and more fully participate in productive community life.

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