Governor Cuomo’s approval ratings have taken a dive this past year because of the many issues involving the Metropolitan Transit Authority (MTA). With so many problems dogging this institution, it’s time for New Yorkers to demand a new approach to the transportation industry.

There is a problem when you have one person, or even a governing body, making decisions regarding something they know very little about. The lack of knowledge regarding transportation, engineering, and other related fields is not under criticism; politicians aren’t expected to know what makes every industry thrive. But their lack of knowledge should disqualify them from deciding what to improve within the MTA. This important role should fall to the engineers—the people who know the technology—who can assess which upgrades are needed. Unfortunately, because the MTA is funded by taxpayers, government makes the decisions, not the knowledgeable industry leaders.

The First Step Toward Innovation

Government stifles technological innovation, which happens especially when enforcing monopolies. Allowing the subway system to exist within a free enterprise would be ideal for improving rail technology and even customer satisfaction. The argument against a decentralized subway system is that it would mean that one corporation would become an abusive monopoly. But isn’t that what the MTA is now? It is a government-run monopoly that abuses the consumers all the time. Fires have started. Trains have swerved off the tracks. A train even broke down in the middle of the subway leaving hundreds of people stranded in the dark for 45 minutes. If the MTA was owned, funded, and operated by a non-public corporation, they would have incentive to make customers happy. This is something that doesn’t happen within government programs, and it is exactly what the MTA is lacking. Moving the MTA to the market would be an extensive step and not one that should necessarily happen in one swoop. However, there are steps we can take to get to that point.

Take Hong Kong, for example: they use a public-private partnership for their subway system, the Mass Transit Railway (MTR). Hong Kong and New York transit systems have roughly the same number of regular riders, yet there is an incredible difference between revenue, profit, fare prices, and consumer satisfaction. In 2013, the Hong Kong MTR spent about $2.18 billion in transit revenue (about a quarter of the MTA’s $8.4 billion), charged, on average, $1USD per ride (compared to MTA’s $2.75), yet has a 99.9% on-time rating for train schedules (MTA is at about 72%). Not only that, but they make a profit: more than $1 billion per year! Compare that to the MTA’s $38 billion debt that has been lingering for 30+ years. Why is there such a stark difference between the two (including the remarkable differences in cleanliness and aesthetics)? A large part of it is because there are shareholders involved who have a profit incentive to do well by consumers or risk losing a lot of money.

Options Lead to Innovation

By loosening the bureaucratic stronghold on the MTA, there would be less waste and we would start to experience real improvements and eventually see progress with cosmetic upgrades (but the internal problems would need to be dealt with first and foremost). The subway system currently uses technology decades, and in some cases over a century, old and is in desperate need of an overhaul. Of course, another issue is that rail infrastructure itself is becoming obsolete due to technological advances of electric driverless cars and buses. Instead of spending an obscene amount of money fixing antiquated railways, companies could eventually use the already built subway tunnels for electric busses. This is just one of many possibilities.

What makes a business perform well? Incentives and choices. The MTA has neither of those. They don’t have any profit incentive because most of the funding comes from taxpayer money and government subsidies. And of course, there is no competing subway system. Because of this, it really doesn’t matter how poor of a job it does; people still need to use it. Companies like Uber and Lyft help commuters to a certain extent, but traffic congestion is its own issue and isn’t necessarily an option for those who need reliable transportation. But with Uber and Lyft, we can see how opening the market to allow more companies to participate gives consumers a lot more options and at lower prices. If the MTA was subjected to the market, because of the enormous debt it currently has, it would have filed for bankruptcy years ago and been forced to fix the issues instead of just throwing more taxpayer money at the problem. As Larry Sharpe has said, “The MTA needs more competition. It’s as simple as that.”

An example of choices within the transportation market is with busses. Chariot, a Ford-based shuttle service, opened in New York recently to provide competition to the bus system. You simply set up the starting and ending addresses as well as an ETA, and a shuttle bus picks you up with a guaranteed seat. This leaves more room on city buses and forces the city busses to lower fares to attract consumers. Who knows what other possibilities there are when we let the professionals handle the industry, not the bureaucrats.

The bureaucratic answer is always more subsidies. But with subsidies, wasteful spending is pretty much guaranteed. At what point do we say: “Throwing money at the problem isn’t helping; let’s try something else!” We could try a private-public partnership at first. Or we could simply have more subway options sharing a rail. There are many possibilities if we let industry leaders innovate.  Larry Sharpe is willing to try something new. Are you?

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The post Reinventing the MTA: Improvement through Innovation appeared first on Larry Sharpe, Libertarian.

Bloated New York government needs money. They use our mobile phone bills as a quiet way to support their own waste and corruption, while they hit us with the third-highest taxes in the U.S.—50% higher than average. We get little in return.

In New York, sales tax on most purchases of is 8.875%. But for some reason, tax on mobile phone service is almost 3 times that—almost 25%. Why?

I can find no good answer to that question.

High tax rates are usually reserved for “sins:” cigarettes, big boats, alcohol, etc.

Whether or not you agree with the premise that “sins” should be heavily taxed, do mobile phones belong in this group?

These days owning a mobile phone is a necessity for running one’s life. In many states, necessities are tax exempt to avoid the regressive punishment against the poor—but not mobile phone service. Phones are hit many times harder than other products. Quietly, enormous telecom taxes have been levied on all of us, disproportionally hitting those most dependent on the technology.

It appears they do it because they can, and because they need money—lots of our money.

“Wireless taxes have long been a fairly frictionless way for states and cities to get revenue,” says Jot Carpenter, Vice President of government affairs at telecom industry association CTIA. He means politically “frictionless”—you and I won’t complain or hold politicians accountable at the ballot box for taking so much of our money for no apparent reason.

It’s as Willie Sutton explained about why he robbed banks: “That’s where the money is.”

When you think like a bureaucrat, it makes perfect sense. And they don’t care who it hurts.

As With Most Tax Issues, New York is Among the Worst

New Yorkers have been hit HARD. The federal tax rate on mobile phone service is 6.3% (that applies to all states). State and local governments then layer on more—much more, an average of 12.2% more. Out of 50 states, New York adds the nation’s third-highest state and local taxes: 18.3%, which is 50% more than the average state. That brings the total cell phone tax rate in New York to 24.6%.

And while telecom companies themselves have competed in a cutthroat industry to reduce their monthly service charges by 17% over the past 10 years, those savings have been more than lost, as cell service tax rates have increased by 22% over that period.

So, as we complain about our cell phone bills going up, many of us blaming the carriers, we need to see that it’s really the politicians doing it to us. Ironically, as carriers improve service and technology and lower costs to us, bloated “public servants” view that as a bad thing, because it takes money out of their hands. And they need our money—it’s already been spent. So, they have to increase the tax rate to make up for the savings that the phone carriers are trying to give us, effectively erasing any savings by putting more of our money in the hands of bloated government.

Infrastructure and Services Don’t Justify the High Tax Rate

You may ask whether New York State provides a lot of infrastructure to assist the public or the telecom industry, which might make the taxes seem more reasonable. But this is not really the case.

State and local politicians will tout things like 911 emergency services, 411 information services, “right-of-way” infrastructure, and franchise agreements for services. But don’t fall for their rhetoric: these are inexpensive services to provide as compared to the massive tax revenue they take from all of us. The FCC found that a sizable portion of 911, 411, and other infrastructure taxes were diverted to other, unrelated purposes, such as coping with localities’ pension crises. Many other taxes and fees don’t even pretend to be related to mobile service.

You must ask yourself: why does New York need so much more cell service tax than other states?

Government officials simply need the tax money to support their waste and corruption. And since New York is so much more wasteful and corrupt than other states, high cell service tax is just another example of where New Yorkers get hit harder.

Just One More Reason Businesses Won’t Invest in New York

In addition to hitting the poor the hardest, higher tax rates discourage investment. Ask yourself: if you were considering bringing your business to New York, with it’s incredibly high income and property taxes, how might incredibly high telecom taxes impact your choice?

The International Chamber of Commerce concluded that such discriminatory taxes not only make doing business more expensive, they also create complexities which make it harder for new telecom companies to offer services, which limits consumer choices. New York is among the worst in all of these areas.

Put Them on a Diet to Make Us All Healthier

To be competitive and attract business and new jobs, New York doesn’t need to dump cash and goodies on companies and college students. Governor Cuomo has tried and it doesn’t work—only wastes. We need our government to get out of the way—stop with the oppressive taxes, stop with undue complexities, stop the need for permission to start a business or get a good job. Just stop!

In the case of telecom taxes, we need to immediately stop their growth. We should be telling Andrew Cuomo and the rest of Albany to roll back such taxes and put a cap on local taxes. We should permit just enough tax to cover essential 911 services and infrastructure, but no more. We can check ourselves against other states to see how we’re doing. We can scale back the limit over a number of years to manage the hit to local governments who have, sadly, become dependent on such tax revenues.

We must put New York government on a financial diet, starting with our cell phone taxes.

The post New York Cell Phone Taxes: “High” is an Understatement appeared first on Larry Sharpe, Libertarian.

He likes to spend the hard-earned money of the people on programs that may sound good (to get him re-elected), but which don’t actually work. His Royal Highness considers it treason to lower taxes for citizens, and he makes it extremely difficult for businesses to operate efficiently and at low costs.

IF IT PLEASES THE CROWN, MAY WE CUT EXCESSIVE SPENDING?

When it comes to the increasing debt of New York, instead of claiming responsibility for the insane amount of government spending that happens in the state, King Andrew places the blame with the county and municipal governments (let’s call them his “earls”). He tells local governments to rein in spending, but the King never seems to cut spending for his own projects. 70 cents for every tax dollar collected goes to state-mandated programs.

Soon that amount will be even higher. Spending is consistently rising in the state and doesn’t seem to be slowing down. In 2016, the state received $8 billion in settlements from 20 businesses, and instead of using that money to pay off some of the state debt, it was added to the state budget for capital projects.

NEEDLESS SPENDING IN EDUCATION

When it comes to education, New York spends the most money per student in the entire nation: $20,600 per pupil. King Andrew is proud of that fact because, to him, spending that much money per student shows that he cares about the children. But spending money doesn’t equate to good leadership. And His Royal Highness didn’t always have this mindset. When he was campaigning in 2010, the King held the exact opposite sentiment, claiming that he did not support the traditional answer to education, which has always been to throw more money at the problem. He then said, “we have, and you know what it’s gotten us? A larger and larger bureaucracy and higher salaries for people who work in the education industry.” But now that King Andrew rules, apparently it is good to outspend every other state in the country when it comes to education.

Now add in the Excelsior Scholarship, which offers free tuition to a certain class of the common folk. Free college sounds great and makes King Andrew look good on the surface, but the program doesn’t help who it claims to help. It is a waste of tax money to pay tuition for students who can afford it on their own.

SPENDING MONEY IN THE WRONG PLACES

When it comes to the many problems surrounding the Metropolitan Transportation Authority, King Andrew spends money on nonessential makeovers, not any of the real internal problems. He pressured the MTA to spend almost $1 billion on the Enhanced Station Initiative, which included new lighting, signs, and clocks, as well as other upgrades that were not considered necessary by MTA leaders. But these cosmetic upgrades make the stations look good. The King also pushed the MTA to spend money on adding phone chargers, Wi-Fi, and new logos painted on subway cars. All of these decisions valued flashy projects over necessary maintenance; this seems to be a common theme in King Andrew’s reign as governor.

And like most politicians, the King participates in crony corporatism (see more about corporatism in this past blog post). A few years ago, King Andrew announced that the state would spend $55 million to help IBM set up a center in Buffalo, claiming they’d create 500 jobs for the area and additional jobs throughout the state. Currently, only 165 people work at the center, most of which are help-desk jobs, not the high-paying $70,000+ annual salary tech jobs they promised to create. Millions of taxpayer dollars have essentially been gifted to a multi-billion-dollar corporation for no reason other than to make the His Royal Highness look good for his subjects.

IF IT PLEASES THE CROWN, MAY WE KEEP MORE OF OUR OWN MONEY?

New York state has the highest individual tax burden in the nation. Along with the income tax, the high property, sales, and excise taxes in the state make New York the least tax-friendly state in the country. Because of these high taxes, many people are leaving the state, especially those with higher incomes. This leaves an enormous tax burden with the middle class. If King Andrew would kindly allow New Yorkers to keep more of their own money, less people would be inclined to leave the state.

MANDATED PROGRAMS AND HOLLYWOOD TAX BREAKS

As with spending, King Andrew doesn’t take responsibility for the insanely high tax burden in the state and instead shifts the blame to his earls. He said, “When you’re annoyed at high taxes, don’t look at me … the problem has always been property taxes in the state of New York.” What he fails to mention is that 85% of property taxes go toward mandated programs from Albany, like Medicaid and education, not local spending, so when the earls are budgeting for local programs, they only work with 15% of property taxes. It’s hard to believe that King Andrew can’t do more to cut capital spending and lower property taxes.

Although the King considers it treasonous to cut taxes for us lowly plebs, he is more than happy to contribute to corporate welfare by giving huge tax breaks to Hollywood executives. King Andrew wants to walk among Hollywood royalty, and to do so he must offer them $420 million in tax credits. New York City has always been a hot spot for filming because of its beautiful scenery, rich history, and magical ambiance. These tax credits don’t necessary encourage production in the city, but they do encourage the wealthy execs to contribute to Cuomo’s campaigns to keep him on the throne.

IF IT PLEASES THE CROWN, MAY WE CONDUCT BUSINESS IN OUR OWN WAY?

New York is ranked the worst state for economic freedom in the nation. With countless regulations within the market, starting a small business and keeping employees is becoming more and more difficult. Legislation and regulations are combining to hurt the New York economy and the workforce.

REGULATIONS HURT MORE THAN THEY HELP

Starting at the end of this year, minimum wage will be increased to $10.40/hr, and it will gradually increase to $15/hr. Legislating a high minimum wage does not help people earn a living. For one, small businesses cannot afford to pay workers those high wages, so many people will lose their jobs. In fact, these minimum wage increases do the most harm to the low-skilled workers they claim to help. Even established business can’t afford to pay someone with minimal skills $15 per hour, meaning the work force will be cut and jobs will be outsourced or replaced by automation. We all want to help the less fortunate gain experience and increase income, but raising the minimum wage has no positive impact on the rate of poverty and only makes King Andrew appear caring.

Recently, the King has announced new regulations that would require businesses to release employee schedules two weeks in advance. If an employer fails to do so, it must pay the employee for an extra 2 hours of work time. Not only is this paying people for labor not performed, it also means an increase in other costs like social security payments. While it can be annoying to receive last-minute work schedules, these regulations will put a huge strain on a lot of businesses. Many managers are unable to know who will be available for shifts 14 days in advance. It is important for both employer and employee to remain flexible. Like with adding phone chargers and fancy lights on the subway instead of fixing the important problems, His Royal Highness has created this rule so he can appear to appease his subjects, without actually creating jobs or improving the economy.

IT’S TIME TO EMPOWER THE PEOPLE

With King Andrew spends commoner money on outrageous projects, like spending $207 million on advertisements for the state within a 3-year period or reallocating $5 million of the MTA’s budget on bailing out three different ski resorts, the state needs a new leader. Larry Sharpe will empower the people by treating them as equals, not mere peons, by rolling back the Crown and instead allowing New Yorkers to keep more of their own earnings to spend in their local communities where the money is most needed.

If you’re tired of being ruled over, and want the power back in the hands of the people, follow Larry on Facebook and Twitter, and consider donating to the campaign here.

The post The Reign of King Andrew appeared first on Larry Sharpe, Libertarian.

The Excelsior Scholarship is the state-wide program Governor Cuomo recently established, which offers families who earn up to $125,000 per year free tuition for any CUNY or SUNY two- or four-year program. To be eligible, a student must take 30 credits per year, and then stay in New York state after graduation for as many years as he or she took advantage of the program. The scholarship converts into a student loan if the student fails a class or moves out of New York before the required in-state residency time is up. The scholarship is only for tuition, so it does not cover the cost of books, housing, fees, etc. This program is a bad idea for a number of reasons.

Bribing Students Increases Corruption

As Larry Sharpe explained in an interview on Live It Up with Donna Drake, Cuomo is essentially bribing people to stay in New York after graduation. Indeed, Governor Cuomo himself said the concept of the program “is that you’re going to stay here and be an asset to the state,” but if “you don’t stay here, then go to California and let them pay for your college education.” Cuomo looks at students as sources of tax revenue he needs to bribe into staying in state, not as individual humans with their own dreams and aspirations and families to feed.

The Excelsior Scholarship will trap people in state even if they can’t find a job after graduating. And it will also force people who are offered a great opportunity out of state into either foregoing the opportunity or being suddenly saddled with an incredible amount of debt they didn’t expect to have to pay back when they signed up—all so Cuomo can use them for their tax dollars. Worse, Excelsior incentivizes graduates to lie about living in New York on paper to avoid the pitfalls that are built into the system, adding yet another layer of corruption to a government program.

Free Bad College is Still Bad College

As Larry has said, free bad college is still bad college, if nothing is being done to address quality. The offer of free tuition will increase class sizes, which almost always decreases quality. Spending money to give individuals a poor education that does not prepare them to enter the workforce is a waste of taxpayer money.

Schools need to have skin in the game in order to have incentive to do better. By innovating and building better educational programs, universities can court students and earn the tuition dollars that students choose to spend. Giving colleges a guaranteed income in the form of millions of taxpayer dollars only rewards underperforming schools and makes them complacent. Just like in life, money doesn’t solve all problems. Yes, schools need funds to operate, but throwing money at the problem is never a good solution.

Target Students Aren’t Reaping the Benefits

On the surface, it seems like the Excelsior program benefits the poorest students who would otherwise be unable to attend school. But the scholarship doesn’t really help the people it’s claiming to. It might be a good deal for the middle- and upper middle-class students who can afford the other costs needed for school without also working a lot, but it doesn’t benefit the lower-class students who still need to work full-time (or close to) to afford housing, books, and other fees. Moreover, if a busy poor student juggling work and school slips and gets an F, the student must pay back the scholarship as a loan.

Known as the “last dollar program,” the scholarship only applies after Pell grants and other financial aid options have been exhausted. Most students who qualify for those other programs need the money for books, housing, and other expenses. But because Excelsior only applies after those other grants, the poorest students get the least amount of money.

We see this in other states that offer free 2-year community college. In Oregon, middle-class students are receiving most of the money— about 60% of the total Oregon Promise budget— because they’re ineligible for Pell grants and financial aid. So oftentimes, students who could afford tuition on their own get free college at the taxpayers’ expense. This defeats the purpose of the program—middle- and upper-class students can already go to college regardless of whether it is “free,” and the economically disadvantaged students aren’t getting the help these programs claim to provide.

Excelsior Economics Belie the “Free” Claim

We all know that “free” college isn’t really free. The taxpayers foot the bill, and since we can’t expect current state leaders to cut spending elsewhere, tax increases are inevitable. Not only that, but these free college promises that are being pushed throughout the nation are far from economically sound.

NPR asked 22 economists about Bernie Sanders’ free-college-for-all proposal, and 20 of the 22 called it a bad idea because it is wasteful to spend money on students who can already afford tuition. Sanders’ plan is a bit different than the Excelsior Scholarship, but similarly, the benefits go to people who aren’t truly in need of the funds.

Let’s look at basic economics: if a service is free, the demand for it goes up; when demand goes up, the cost increases. This means that free college programs are creating more demand for higher education, which is driving up the cots of tuition and fees. So those who don’t qualify for the program end up paying more. We already see this pattern of rising educational costs reflected in the enormous number of student loans.

In addition, offering free college also makes the education market imbalanced. It is incredibly difficult for private schools to compete with “free.” Once private schools start losing students, thus losing tuition payments, they will begin to disappear from the market, which hurts the diversity of education and lessens choices for future students. The wide range of different schools is extremely important in a state as diverse as New York.

Free College Devalues Degrees

If tuition is free, it will no doubt attract more students to apply for college. Morley Winograd, an advocate for free college programs like Excelsior, told NPR that these programs have the power to get more students to apply for college, regardless of whether the free college programs are able to deliver on their promises.

But flooding the college system will only devalue the college degree, like we see with high school diplomas. In his 2015 State of the Union address, President Obama said, “I want to spread that idea . . . that two years of college becomes as free and universal in America as high school is today.” We all agree that college should be more affordable, but devaluing the degree the same way free high school devalues the high school diploma won’t necessarily help graduates get into the workforce.

To learn more about innovation in New York education, check out this past blog post and Larry’s video here.

The post The Price of Free College: How Excelsior Pushes Education Costs Ever Upward appeared first on Larry Sharpe, Libertarian.