We retired Tax Justice Blog in April 2017. For new content on issues related to tax justice, go to www.justtaxesblog.org
Some Americans respond positively to the anti-tax message of the Tea Party, but is anyone willing to accept the cuts in public services that must logically follow? The Tea Party has been specific about cutting taxes but vague about what programs must be slashed in order to balance the government’s books. So what will happen if the Tea Party takes power? The recent experience of Nassau County, New York, shows us that the result will be a disaster.
When Tea Party-backed Edward Mangano won his election for the Nassau County Executive as a member of the Tax Revolt Party, it was on a platform of vague promises to cut spending and to repeal a $40 million dollar energy tax.
The voters of Nassau County got what they asked for. Mangano immediately repealed the energy tax, but failed to actually pass any of the substantial spending cuts that he had promised. In doing so, he may have stayed true to his Tea Party roots, but he also drove the second richest county in the nation into fiscal disaster.
With a $175 million dollar gap in the $2.6 billion budget plan, the Nassau County Interim Finance Authority (NIFA), a New York State oversight board, was forced to take control of the county’s finances. NIFA is tasked with stepping in to correct the county’s finances whenever there is a gap of larger than 1 percent, which the current gap dwarfs by almost 7 times.
The situation is so dire that Moody’s is putting the county’s municipal securities on watch for a downgrade, a move that portfolio managers said is rare considering how safe these investments are usually considered.
Despite this, Mangano has refused to yield and in recent days filed suit to stop the takeover, citing his worries that NIFA may force him to raise taxes.
The consensus against Mangano even transcends normal ideological lines, with the New York Times and New York Post editorial pages finding themselves in rare agreement over the irresponsibility of his actions.
In a comprehensive special report, Reuter’s called Nassau County’s experience a “cautionary tale,” saying that the fiscal collapse in Nassau and the subsequent takeover represents a “black eye for the Tea Party.”
As one observer put it, “A lot of people who got elected on this type of anti-tax platform are running into the brick wall of fiscal reality.”