Politics & Policy

Governor Giuliani

The Empire State needs him.

New York mayor Rudy Giuliani’s confident leadership since the September 11 Massacre is the stuff of legend. Giuliani’s local job approval rating stands at 79 percent, according to an October 9 Quinnipiac University poll. With a face nearly as famous as Lady Liberty’s, Giuliani recently walked through Times Square literally to the applause of New Yorkers and tourists alike.

It pains Gothamites to realize Giuliani will not be in City Hall after New Year’s Eve. As arguably the most effective and imaginative public servant in America, Giuliani deserves a higher office in which to devote his enormous talents to his fellow citizens. President Bush could be instrumental in keeping Giuliani on stage in an even bigger part. The Empire State needs a governor with Giuliani’s energy, laser focus on fiscal matters, and enthusiasm for tax reduction.

Before terrorists turned his life and city upside down, Giuliani discussed his supply-side record at a September 5 Manhattan Institute press conference. While Giuliani is know worldwide for slashing crime, he has chopped taxes, too.

“This is a reversal in philosophy of very recent origin,” Giuliani said. Between the 1970s and his first inaugural on January 1, 1994, he said local taxes had been hiked 20 different times. On his watch, 23 different taxes have been cut or eliminated.

Since Giuliani’s arrival, the local personal income tax rate has fallen from 4.46 percent to 3.54 percent — a 21 percent decline in the tax burden.

City tax revenue as a share of personal income has declined from 8.9 percent in 1992 to 7.3 percent today. That number has not been so low since before 1970.

The hotel occupancy tax dropped from 21.25 percent to 13.25 percent. “That was confiscatory,” Giuliani said of the old tax rate. Local politicians “didn’t realize that they were driving away $1 billion in convention business per year.” As supply-siders predicted, the lower tax generated higher revenue. In 1995, the year the tax plunged, it produced $135 million in receipts. Last year, while picking less from each visitor’s pocket, the lower tax yielded revenues of $219 million.

These and other tax cuts helped create 481,000 private-sector jobs during the Giuliani years. Of course, safer streets and — until last year — a booming national economy and thriving stock market also kept the local employment picture rosy. Still, Giuliani said, “I would attribute 30 to 40 percent of the increase in jobs to the reduction in taxes.” Sounding like Jack Kemp on the Hudson, Giuliani added: “If the economy needs a jobs program, reduce taxes to create jobs for poor people.”

With New York now reeling fiscally as well as physically and emotionally, Giuliani unveiled a revised budget on October 9 to reflect the city’s grim, new economic environment. He cut the budget across-the-board 15 percent, except for a 2.5 percent reduction in the police and fire departments and government school system. These savings would offset an expected $1 billion tax revenue shortfall. “You can find $1 billion in a $39 billion budget without affecting a single blessed thing,” Giuliani said. He also refused to postpone or pare any of his $17.56 billion in tax reductions scheduled through 2005, calling such a move “a dumb, stupid, idiotic and moronic thing to do.”

Compare Giuliani’s thrift to Washington, D.C. where Congress has greeted the War on Terror with an obscene spending spree. Atop $40 billion in legitimate expenditures to recover from last month’s attack and defend against future assaults, federal education outlays appear set to grow 17 percent next year alone. While the House voted October 5 to boost farm spending $170 billion through 2011, Senator Harry Reid (D., Nevada) wants some $9 billion for a magnetic-levitation train to link Anaheim, California and Las Vegas. At last, Mickey Mouse will be united with Siegfried and Roy.

Albany is a sleepy, corrupt, free-spending patronage mill. Despite his good ink since September 11, Governor George Pataki has done precious little to reverse this. He normally is as invisible and non-confrontational as a diplomat. Fittingly, President Bush could do New Yorkers a huge favor by appointing Pataki United States ambassador to wherever he wants. Giuliani would trounce the unknown then-acting governor Mary Donohue in a Republican primary and very likely would win the governor’s mansion in November 2002. That would be a fitting reward for his outstanding tenure as New York’s greatest mayor yet.

Deroy Murdock is a Manhattan-based Fox News contributor and a contributing editor of National Review Online, and a senior fellow with the London Center for Policy Research.


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