Reflections on the Year 2008

H. William Batt

[Reprinted from GroundSwell, November-December 2008]

I sit in a strategic spot from which to look out at New York State politics, and one might think that my position here would give me much more access than it does. The reality is that the legislators here are not very available except to those who are able to pay to attend their various receptions and campaign rallies. But even if one does manage to capture their attention, sustaining their interest in an idea so "outside the box" as land value taxation is an even greater challenge. Most of them, frankly, don't have the diligence or interest to really study something so outside their preconceptions; so one is better off talking with one of their staffs. The staffers, in contrast, are often just out of graduate school, intellectually curious and idealistic, just the kind of subjects we should want to reach. Having once served among them in a somewhat comparable capacity, I'm often given entree to talk with them, especially when times are slower. I'd be lots more successful however, if I had better graphics and data to explicate our views; that's why I make continuous appeals to members of our movement for help in assembling such materials.

This year I faced the challenge of getting a commission appointed by the Governor in January to look beyond conventional solutions for property tax relief. Governor Spitzer, who soon thereafter would suffer an ignominious downfall, appointed his erstwhile primary rival, Nassau County Chief Executive Thomas Suozzi, to head a Commission on Property Tax Relief, to recommend to him and the legislature by December ways to mitigate the property tax burdens of homeowners. A mid-year interim report in June foretold what was finally coming in December: a property tax cap of 4% and a circuit breaker, despite their being ineffective in other states.

Four hearings held as the commission travelled the state were replete with stories of poor widows being driven out of their homes, of the incongruities between property taxes and income levels, and of the disparities between one region of the state and another. I testified as long as I was allowed at one of the hearings -- about five minutes -- and wrote about twelve papers for consideration of the Commission's staff under my name). But only one of the staffers had any real understanding of economics, and taking on the forces pressing for relief by conventional means was a daunting at best. But then came the crash in the state's economy, ensuring that little if any action to cut taxes could be enacted this year: the state suddenly faces shortfalls for the next three years amounting to the tens of billions! Not only do governments need every cent they can get to balance its budgets, the crash in property values makes it all but impossible to re-establish tax equity by quick re-assessments. The quandary faced governments at all levels, local, county, and state, will now have little chance of adopting short-run fiscal remedies of any sort.

At the time the conclusions were being finalized, I sought lastly to demonstrate how unreliable and unfair the assessments are, so that understanding these problems might delay the enactment of measures that would compound the difficulties. Fortunately, I've connected with a proficient GIS technical person willing to work with me to address some of the challenges of this order. Together we have created land value maps of cities in the upstate area portraying how haphazardly the land assessments are performed. Given that buildings are continually depreciating and that land accounts for the growth in property values, getting those assessments consistent and accurate is pivotal in the institution of land value taxation, or for the conventional property tax for that matter. We have been able to put several sample cities online - see urbantools.org. -- and also able to present to the association of NYS GIS techies an explanation of what they can do using their tools to help assessors perform their jobs well. This has already yielded two more maps of upstate New York cities by an attendee who rose to the challenge. Seeing these maps puts assessors and revenue administrators on notice that better performance is called for if fair taxation is to obtain. We also managed to use GIS to map land values and simulate LVT in New London, CT.

At the same time, New York State, together with other Northeastern States, instituted an air pollution solution now unique in the nation. Under the acronym RGGI, for Regional Greenhouse Gas Initiative, emissions of CO2 are being auctioned off both to raise public revenue and reduce noxious and climate-changing discharges. For the first round of carbon auctions, the final price of sale was $3.07 per ton. More auctions are to follow. This program deserves more exploration in terms of its Georgist dimensions: it could be interpreted as a simple Coasian payment for polluting. On the other hand, it might also be viewed as rental of air sinks. Either way, it warrants further explication.

On still another front, the overcrowding of airspace and traffic for the New York's three airports -- LaGuardia, Kennedy, and Newark -- has prompted the Federal Aeronautics Administration to press the New York Port Authority to auction off the landing slots that various airlines now regard as their own. The Port Authority has strenuously resisted change, and the date of the first auction has been postponed once already. This difference in market philosophy represents a titanic struggle among some of the behemoths of the airline industry. It has not been viewed at all in Georgist terms, but it deserves to be. Again, it offers the prospect of not only improving the efficiency of airport operations but raising more revenue for their maintenance and operations. But the champion of auctions, Transportation Secretary Mary Peters, will leave office at the end of the Bush administration, and New York Senator Chuck Schumer, a vehement opponent of the scheme, has promised to protect the airline industry. But as air traffic becomes ever more congested, the final hour of decision is fast approaching for resolution of air resource allocation here as well.

Desperate circumstances may offer opportunities to political leaders willing to look with fresh eyes at the challenges. The dilemmas are not likely to be resolved quickly -- if anything, they stand to worsen. Already, some soundings have echoed back to me and to others in our network, showing that there is recognition that present arrangements don't work. There's always a chance that some fortunes will break our way, that one of the several dozen small cities in New York State now in dire financial straits will give up their hope for state or federal bailouts, or for some other mystical solutions to come over the horizon. Resources that are recognizably part of the commons are being pressed to collapse, and methods for allocation and use need to be rethought. Each year it becomes more obvious that the conventional solutions, and the intellectual paradigms on which they rest, are untenable. Each year also, our alternate approach gains credence and momentum to offer evidence of answers we are confident in proposing.

One of the last most exciting experiences to me was meeting a brilliant professor of law from Cornell who gave the Henry George Seminar at The University of Scranton in the spring of this year. Bob Hockett offered to Wyn Achenbaum and me during a breakfast chat that he is ninety percent comfortable with Georgist ideas. In preparing to meet him, we read some of his monographs distinguishing between endowments that were ethically endogenous and ethically exogenous. By this he meant entitlements to which we have a moral claim to, i.e., the result of our own efforts and those that are privileges that we might possess but which our claim to is somewhat problematic. He managed to weave three difficult papers offered to us in advance, each over a hundred pages, into a coherent presentation that was, to us, just beautiful. The exciting part about meeting him was his ability to articulate the Georgist philosophy in both abstract and yet in very operational language. The hope both of us came away with is that we can continue a relationship supportive of Bob?s intellectual pursuits, especially as they relate also to our agenda.

Our philosophy needs both operational demonstration and intellectual grounding. This year I had the chance to see both developments, exciting possibilities even if not all successful.