PSC President James Davis speaks at a rally outside CUNY headquarters in February. (Credit: Dave Sanders)
Austerity is a policy decision. Overcoming it requires organizing.
When informed of proposed cuts to college budgets, PSC members are told that structural deficits are to blame, that there are only so many levers management can pull to save money. While it is true that CUNY enrollment is down from pre-pandemic levels and the university’s federal stimulus funds are about to dry up, CUNY’s budget gaps are the result not of disembodied structures but of policy choices made by people. We must continue organizing to change them.
New York State has resisted raising taxes on large corporations and moved instead in the other direction. The state’s corporate tax rate has been held below 8% since 2001 and was cut by Governor Andrew Cuomo to 6.5% in 2016, suppressing state revenue. By comparison, the corporate tax rate in New Jersey is 11.5%, Pennsylvania is 9%, and Massachusetts is 8%. In 2021 under Governor Kathy Hochul, the rate increased slightly to 7.25%, but with a provision to revert to 6.5% in 2024, absent further action. According to the Fiscal Policy Institute, this relatively small, limited hike alone generated $3.4 billion in new state revenue over three years. Imagine what could be done for public institutions of all kinds if the corporate tax rate were increased. As a percentage of total state collections, corporate tax revenues yielded twice as much in 1980 as they did in 2020! By declining to fairly tax corporations with over $5 million in annual profits, New York has foregone much needed revenue and failed to properly support the public sector, including public universities.
SUPER-RICH EXODUS
The myth that the super-rich will leave the state in droves if its tax code becomes more progressive has been dispelled. Between 2016 and 2021, the number of New York State taxpayers making $1 million or more per year increased by 48% to 84,366. The wealthiest of these super-rich are the 107 billionaires who reside in New York City; their net worth in 2022 was $640 billion, according to Forbes. Last year, Wall Street bonuses fell 26% from the empyrean heights of 2021, according to the state comptroller, and despite that drop the average bonus was still a whopping $176,600. This bonus alone represents two-and-a-half times the entire annual income of the median NYC family. As a result of these conditions, New York has the dubious distinction of being the country’s most economically unequal state, where the average annual income of the wealthiest 1% of families is more than 40 times the average annual income of the other 99% of families. Wealth inequality is also highly racialized in New York and across the country. According to a November 2022 report by the Fiscal Policy Institute, white households hold 86% of all wealth and 92% of extreme wealth nationally.
The problem is not that CUNY’s needs cannot compete with other areas of acute need, such as affordable housing or home-care workers or pre-K–12 schools or resources for asylum seekers. The problem is that all of these public goods have been made subordinate to New York’s persistent stratification and concentration of wealth.
The governor’s executive budget for fiscal year 2024 sought savings through programmatic cuts to CUNY, including a proposed SEEK program reduction of $1 million and a $1 million cut to mental health services from the prior year. It was audacious and misguided for the governor to propose a 3% tuition hike at CUNY to generate operating funds for our colleges, and for the CUNY chancellor to support this proposal rather than call for additional public investment. CUNY’s own budget request exceeded the governor’s FY 2024 executive budget by $340 million, yet all of the public pressure on the state to fund CUNY has come from the PSC, the CUNY Rising Alliance and allies.
INSURANCE STRUGGLE
The struggle over city health insurance staged a similar dynamic locally. Rather than devise a sustainable, progressive solution to skyrocketing health-care costs, the city is seeking to impose a Medicare Advantage program privately administered by Aetna onto municipal retirees as a cost-saving measure. The Aetna plan is superior to the original Medicare Advantage contract that the city hoped to sign, but that misses a key point. Seeking $600 million in annual savings by destabilizing retiree health care and eliminating the premium-free Medigap insurance supplementing Medicare, the city made a decision not to pursue safer, more durable means of achieving health savings. The Aetna Medicare Advantage plan could have been offered with an option to allow retirees to keep their Medicare and city-provided Medigap plan, an option expressly provided in the Aetna contract that would have saved the city more than $300 million annually.
However, rather than forego the additional savings – less than three-tenths of 1% of the city’s $102.7 billion budget – the Adams administration foreclosed that path in favor of forcibly enrolling all retirees into Medicare Advantage. And for what? Certainly not to avert fiscal ruin for the city. The city is projected to close out FY 2023 with a large budget surplus, according to the NYC Independent Budget Office, and healthy reserves on which to draw in case of a recession. Moreover, the Medicare Advantage plan will not address ballooning hospital charges and prescription drug costs, the main sources of rising city health costs.
DEFINING ‘PUBLIC’
Why are public goods discarded and devalued? It has everything to do with who defines the public and whether that public is understood as deserving, according to our CUNY colleague, Heather McGhee, distinguished lecturer of urban studies at the School of Labor and Urban Studies.
“When the people with power in a society see a portion of the populace as inferior and undeserving, their definition of ‘the public’ becomes conditional,” McGhee writes in The Sum of Us: What Racism Costs Everyone, and How We Can Prosper Together. “It’s often unconscious, but their perception of the Other as undeserving becomes so central to their perception of themselves as deserving that they’ll tear apart the web that supports everyone, including them. Public goods, in other words, are only for the public we perceive to be good.”
The PSC will continue to insist, in the face of prevailing norms and prejudices, that CUNY students – the majority of whom are people of color, and many of whom are immigrants and/or the first in their families to attend college – are indeed deserving, and that state and city funding for CUNY is not a handout but a critical benefit for the entire city and state. We will continue to assert that the faculty and staff who make the university run – those of us who help students to become their best selves and transform their communities – are also deserving of increased public investment.
Published: April 26, 2023
