Fiscal Crisis Manufactured by Politicians for Bankers, Green Gov Candidate Says

Howie Hawkins - Green for Governor 

Media Release -

For immediate release: June 28, 2010

For more info:
Howie Hawkins, 315 425-1019
Mark Dunlea 518 860-3725

Hawkins Says Schools Need Full Funding, Not Mayoral Control


Rochester NY—Howie Hawkins, the Green Party candidate for New York Governor, said today that the major party politicians are manufacturing the state's fiscal deficit at the behest of the big financial firms that fund their parties.


"The state fiscal crisis is due to the politics, not economics, to money-drenched politicians, not impersonal market forces. New York State had the money from the Stock Transfer Tax but gave it back to Wall Street," Hawkins said.


"Replacing the democratic model of publicly-elected school boards with the corporate CEO model of mayoral control is part of the same ginned up corporate agenda responsible for the politically motivated fiscal crisis. Mayoral control was initiated by corporations that want to tap public revenues, not a popular movement," Hawkins added.


"While the corporate-sponsored think tanks and political parties portray the state budget deficit as a problem of excessive spending, it is really a revenue problem. Part of the revenue shortfall is due to the economic recession, which public spending cuts will only worsen by reducing consumption and investment. But the underlying cause is the long-term tax cuts given to wealthy New Yorkers in recent decades. The tax cuts were supposed to stimulate productive investment. Instead, the rich took their tax cut money and speculated in paper assets. Now we need to make them pay their fair share of taxes so we can direct that money to public needs and productive investments," Hawkins explained.


The state collected $16 billion from the Stock Transfer Tax last year, but rebated it all back to brokers. The tax was instituted in 1909, but the state has been rebating it since 1981. The tax is less than 1/20th of 1 percent of the value of a trade.


"Instead of a $9 billion deficit, we would have a $7 billion surplus next year if we kept the Stock Transfer Tax. If New York went back to its more progressive income tax structure of the 1970s, 95% of us would get a tax cut and the state would still collect $8 billion more in taxes. With Wall Street handing out over $20 billion in 2009 cash bonuses, a 50% Bankers' Bonus Tax on cash bonuses over $50,000 would generate another $10 billion for the state treasury. With these three progressive tax reforms, the state would have about $34 billion more in revenues next year," Hawkins said in summarizing his proposals to erase the state fiscal deficit and increase funding for jobs, schools, and environmental protection.


Hawkins noted that Democrat Andrew Cuomo and all of his Republican opponents have explicitly ruled out higher taxes on the rich while calling for a state spending cap and a freeze on state workers' pay and benefits.


"With Democrats like Cuomo, who needs Republicans? Cuomo's fiscal and economic policies, coupled to the federal freeze on all discretionary spending except the military, are a recipe for a vicious circle of depression, deflation, and debt. Cuts in public spending to reduce demand, the economy contracts, tax revenues decline further, and the deficit grows. Cuomo and the Democratic leadership have abandoned their New Deal legacy and gone back to Hoover's economics," Hawkins said.


"Instead of taxing the rich up front for operating expenses, the state is borrowing money from them, paying interest on it, and cutting spending at their behest. The rich prefer a deflationary environment that yields higher real interest rates for the bonds they own, even if it means an economic depression for the rest of us," Hawkins said.


"The basic issue in this campaign is whether state fiscal and economic policies will serve the people of New York, or the special interest of the bond market, the shadow government of big bankers. There is not enough economic surplus to keep bailing out bankers for their bad loans and provide decent public services. Something has to give. The bankers and their two corporate parties say public services have to be cut. The Green Party says the bankers have to pay their fair share of taxes," Hawkins added.


Schools Need Full Funding, Not Mayoral Control


Turning to the local Rochester issue of mayoral control of public schools, which is already in effect in New York City and has been proposed by the mayor of Syracuse, Hawkins' home town, Hawkins said he opposed the bill before the state legislature for dissolving the Rochester school board and establishing mayoral control.


"Where did this demand for mayoral control come from? There are no petitions and demonstrations for it. There is no mass movement for it. This is coming from the corporate world. Accountable, elected, democratic bodies are an obstacle to their plans to siphon public revenues to their private coffers," Hawkins said.


Hawkins noted that in every city where elected school boards have been replaced a top-down executive administration, whether by a state takeover as in Newark, Philadelphia, Oakland, St. Louis, and Detroit or by a mayoral takeover in New York City, Boston, Washington DC, and Chicago, major privatization of public school property and expansion of charter schools followed.


The Obama administration's Race to the Top education policy is an expansion of the No Child Left Behind program of the Bush administration, the legislation for which was crafted and had the support of many Democrats. Mayoral control is being pushed from the top as part of the Race to the Top high stakes testing program that sets up schools in poor communities for failure and then closure and replacement by charters, Hawkins said. US Education Secretary Arne Duncan is a strong proponent of mayoral control. He owed his tenure as CEO of Chicago schools to mayoral control. But his tenure was marked by autocratically implemented public school closings and charter expansion as part of a citywide gentrification plan labeled an education reform plan, Renaissance 2010, which was conceived by financial and real estate firms in the city's elite Commonwealth Club. The parent, teacher, and community resistance has been sustained and continues after Duncan's departure, according to Hawkins.


"Mayoral control has been disruptive in every city where it has taken effect. Instead of an elected school board with public meetings and hearings, you get an authoritarian system of management that leaves students, parents, teachers, and the community little avenue for redress of grievances than lawsuits and direct resistance," Hawkins observed.


"One hundred years ago, progressive educational reform was about getting the schools out of the hands of mayors who were using them as patronage resources to hand out teaching and administrative jobs to incompetent hacks and contracts to campaign contributors. Now, instead of taxing the rich their fair share to pay for public education, the Democrats have adopted the conservative Republican position and want to control public education for the profits of hedge funds invested in union-and- accountability-free charter schools," Hawkins said.


Hawkins cited media reports that Democratic nominee Andrew Cuomo had a meeting in April with hedge fund managers who have been mobilizing to support charter schools. Much of the support from hedge funds for Cuomo is being organized by Joe Williams, executive director of Democrats for Education Reform, who include the founders of funds like Anchorage Capital Partners with $8 billion under management, Greenlight Capital with $6.8 billion, and Pershing Square Capital Management with $5.5 billion.


Democrats for Education Reform advocate mayoral control as well as charter schools. The Issues page on their website says: "DFER supports the idea of holding mayors accountable for the successful operation of schools in cities where school boards are ineffective and schools are failing....Examples of successful mayoral control exist in New York City (Mayor Michael Bloomberg and Schools Chancellor Joel Klein), Chicago (Mayor Richard Daily and then-CEO of Chicago Public Schools, Secretary of Education Arne Duncan), and the District of Columbia (Mayor Adrian Fenty and Schools Chancellor Michelle Rhee)."


"What our schools need in order to close the achievement gap is full funding and greater parent, teacher, and community participation, not spending cuts, mayoral control, and attacks on teachers' unions, pay, and benefits. The best predictor by far of student performance is the income level of the students' families. But where schools have improved in poor communities, it has been where the community became engaged in their children's education. We need a bottom-up social movement, not top-down corporate management. We need equitable and adequate funding of all public schools, not the diversion of public funds to union-free, unaccountable charter schools. We need to eradicate poverty and reduce class inequalities, not use low student achievement in poor communities as a new profit center for private gain at public expense," Hawkins said.


Hawkins said that mayoral control of school districts has not resulted in higher student achievement. In New York City, parents complain about the lack of access school administrators to deal with problems since mayoral control took effect, he said. He also said Mayor Bloomberg was undermining his own claim that mayoral control would improve public schools by encouraging more charter schools that take money from the public schools he claims to be improving. Hawkins noted that State Senator Bill Perkins from Harlem had turned from advocate to opponent of charter schools after seeing underpaid teachers, overpaid administrators, the saturation of Harlem but not Westchester with charters coupled to either the closing of public schools in Harlem or to the segregation of charter from public school students whose schools are forced to share the same public school buildings.


Perkins has called for independent auditing of charter schools. Hawkins said that independent auditing was needed particularly in Albany, where charters are now straining to service debts for construction loans with rents that have tripled recently. Without audits, the public does not know how its public money is being used, a concern that is magnified by the conflicts of interest inherent in the often interlocking boards of charter schools and groups that organize and syndicate the loans.


Hawkins noted that mayoral control does not necessarily mean mayoral power. The state-appointed schools manager, Robert Bobb, in Detroit has run up against legal challenges and neighborhood resistance to his implement his foundation-funded plan to "replace, not reform" the public schools by shuttering 45 district schools next year, opening up 70 new charter schools by 2020, and handing control of what's left of public education to Mayor Dave Bing. Students, teachers, parents, alumni have vowed to pursue court injunctions and, if necessary, school takeovers for ongoing teach-ins to keep their community schools open.

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