GOVERNOR'S TAXING ERROR

Governor Paterson proposed a slew of tax increases on New Yorkers last week, even if he wasn't anxious to use that particular three-letter word.

The package would require those who live here to pay more for cable TV and movie tickets, for non-diet sodas and music downloads, and it would reinstate a sales tax on clothing costing less than $110.

All of these hikes, if approved by the State Legislature—and many of them undoubtedly will be, given the desperate budget situation—will have their greatest impact on middle-class and working-class New Yorkers, since they have less disposable income than the wealthy. Although none of them are essential to people's lives the way that food and shelter are, they are so ingrained as part of daily living that few would think of them as luxuries.

Given that kitchen sink of new levies, it seemed incongruous that the Governor had not proposed an income-tax surcharge on New Yorkers making more than a million dollars a year, as several union leaders have been urging as part of the solution to the budget crisis. It became doubly so because of his call, along with Mayor Bloomberg, for scaled-down pension rights for future city and state workers, even though the savings from such changes would be negligible for the next couple of years.

Given his reputation while a State Senator as sympathetic to working people and their unions—which he lived up to during the tense discussions with the Mayor six months ago that led to the state takeover of the New York City Off-Track Betting Corporation—Mr. Paterson seems to be going against type. He may believe that he needs to talk tough to labor and eschew income-tax hikes on the wealthy to overcome perceptions of him as too much of an old-style liberal.

But this is unlikely to become his President Nixon goes to China moment. The unbalanced scales of his deficit-cutting plan are not going to inspire any union leaders to carry the weight of the reduced pension provisions, regardless of the fact that incumbent members would not be affected. And without the unions falling into line, it's hard to imagine state legislators taking marching orders on the subject. Mr. Paterson is popular, but he has yet to gain the stature of the two previous Governors who pushed through reduced pension rights—Nelson Rockefeller and Hugh Carey—during the 1970s. And the unions arguably have more influence now over the State Legislature than they did during that era.

The fact that newspaper editorial boards are lining up in favor of the proposition is unlikely to change the calculus. If Mr. Paterson has any doubts about that, he might consult Mr. Bloomberg, who got a rude awakening after the city's three major dailies blessed his bid for a third term and the public at large failed to get in line.

There is no question that public-employee pension costs are sizable for both the city and state. But the rollbacks the Governor and Mayor are seeking are less-reflective of legislative giveaways to friendly unions than they are the product of negotiations between chief executives and the unions over the years.

The Daily News editorial board, which still retains a soft spot for Rudy Giuliani, managed a broadside on the subject Dec. 22 that never mentioned that our former Mayor agreed to many of the key provisions that Mr. Bloomberg is now seeking to eliminate for future employees. He did so as part of the give-and-take eight years ago that produced the needed approval by municipal unions of a reduction of $850 million in city contributions to the five pension systems.

Public-employee unions long ago recognized the value of decent pensions in encouraging workers to pursue careers in civil service. They may be more generous than those provided in private industry, but that merely compensates for the fact that public-employee salaries are not as good. (One reason for that disparity besides the higher premium that government seems to place on having a career workforce is that editorial writers generally get most exercised when public workers are being well paid, and so government officials have found it easier to give them more in the area of fringe benefits than in salary.)

Mr. Paterson may believe that ultimately the prospect of massive job losses will bring union leaders around on the issue. That might be a mistaken assumption— more than a few union leaders share the view of our philosopher-Mayor that it could be preferable to have a smaller, better-paid workforce.

And all of them understand the backlash they would receive from their members if they agreed to any concessions without an income-tax surcharge on the rich as part of the program. Labor's argument for such a hike is compelling: those are the people who benefited disproportionately from the Bush tax cuts over the past eight years. As a class, it is also the group most likely to have been part of the financial shenanigans that have helped create this mess.

And so the idea that on top of a series of sales taxes that will hit union members harder than wealthy New Yorkers there must be a further imposition on public employees is something that would be as hard to swallow as it is to breathe in.

There is no doubt the state's budget problems are real. But until the unions see how much help the Obama Administration is going to provide, there is no reason for them to act in haste. And until the Governor offers a more-equitable proposal for spreading the pain, he is unlikely to see them offering much cooperation.