Sunday, May 24, 2015

Cuomo in Quid Pro Quo with Hedge Funders in His School Bill

[UPDATE, From the HedgeClipper blog's HedgePapers No. 15: "Cuomo’s Latest Scheme: Tax Refunds for Billionaires Who Donate to Elite Private Schools and Privatized Charter Schools"]
Don't let the group name fool you: Cuomo's 1%er friends are getting a payback.

*Resist the Trojan Horse hype: Don't let Cuomo's bill's enticement of tax credit for teacher out-of-pocket spending for classroom supplies keep you from seeing what this bill is: a massive shifting of public money to private schools. This is a distraction. The state government ought to provide adequate money for classroom supplies within the schools. Teachers should not be obliged to pay to pay for the supplies.

The real education progressives can keep on waiting for U.S. District Attorney Preet Bharara to put New York Governor Andrew Cuomo in cuffs for the perp walk. In his boldest pay-back to his hedge fund patrons, he has pushed a new education bill that serves their interests.  Yet, in this age of the U.S. Supreme Court Citizens United decision Cuomo can probably get away with this as there are no restraints on political donations to candidates. Short of finding a recording of Cuomo and hedge funders in an explicit "I'll do this if you do this for me" conversation, Cuomo will be able to get away with this brazen give away to his hedge fund patrons.

The United Federation of Teachers (UFT) reported on their website (a day after "The New York Times" beat them to the punch in "Cuomo Promotes Tax Credits for Families of Students at Private Schools") that Cuomo in his new tax credit bill "Parental Choice in Education Act" will lower the taxes of large donors to private schools. Read also this UFT site on his pay-back/kick-back to his political contributors.
Quid pro Cuomo; somebody else is always to blame.

To dispel any doubt that Cuomo has benefited handsomely from the largesse of hedge funders, read, "Andrew Cuomo Has Taken Nearly $5 Million In Contributions From Hedge Funds: Report" from "The International Business Times," March 4, 2015.

On a closely related issue, read Juan Gonzalez' column, "Hedge fund executives give 'til it hurts to politicians, especially Cuomo, to get more charter schools," New York "Daily News", March 11, 2015.

To the UFT's credit it noted that Cuomo's proposal is a blatant give-away to elite donors.
The program allows for dollar for dollar write-off of donations to private schools.  For instance, someone donating a million dollars to a private school would have his or her taxes reduced by $1 million.

In his public pitch for the tax credit program in television ads, Cuomo is pitching this with social justice language, "giving every child an opportunity to excel" and similar rhetoric. Of  course the actual details are not in the ads. Yet, the actual intended beneficiaries of the program are private schools, for in order for the schools to receive the funds they must have foundations. Also, public schools can only get up to $20 million in tax credits, and tax credits to private schools can total $70 million.
As the UFT noted, this stands in irony, as the state owes more than $5 billion to schools, according to the Campaign for Fiscal Equity lawsuit settlement. The governor has balked at paying this money, yet in the meantime he has found the funds to give $150 million per year to underwrite the private schools and Cuomo's donors.

The UFT closed its article with the following criticism. [It is all valid, but it is disingenuous, as the Unity caucus-dominated UFT was solidly allied with Cuomo up through the challenge that he faced last year from upstart Zephyr Teachout: recall that the UFT (i.e., Michael Mulgrew and company) and other major state unions threatened to dissolve the Working Families if they would shift their allegiance from Cuomo to Teachout. Furthermore, Mulgrew's proxy Andy Pallotta paid $10,000 for a table a year ago at Cuomo's birthday fundraiser.]
Most telling is that Cuomo’s proposed tax credit bill bears striking resemblance to model legislation by the American Legislative Exchange Council, a right-wing group that wants to destroy public education and whose funders include the Koch family.

Our governor is in step with ALEC’s right-wing ideology against public schools. But he is far out of step with New York State residents, as recent polls show.

The state Legislature must reject this destructive proposal.
Michelle Rhee's group's link and legalized corruption
Former Washington, D.C. schools chancellor Michelle Rhee has moved on from her post-D.C. schools stint, StudentsFirst. Yet, the organization lives on. It is ever so active, in alignment with Cuomo and the Eva Moskowitz orbit of Democratic politics and "reform" education policies. Teachout last year excoriated the hedge-funders' influence as "legal corruption." From "A guide to what the big Cuomo donors want in 2015," Capital New York, December 8, 2014:
New Yorkers for a Balanced Albany, an independent expenditure committee formed by the pro-charter organization Students First NY, spent $4.2 million this past election cycle to help Republicans re-gain control of the Senate.

The bulk of that cash came in the final weeks of the campaign and was given by a dozen donors, most of them current or retired hedge fund managers like Paul Singer, Dan Loeb, Julian H. Robertson Jr., and Paul Tudor Jones II.

The alarm about this sector’s given has been sounded most aggressively by Zephyr Teachout, Cuomo’s Democratic primary opponent, who has now mended fences with the labor-backed Working Families Party (which first floated her as a candidate but ultimately endorsed the governor) to take on wealthy charter school backers.

According to Teachout, these donors are trying to undermine public education in New York by buying support for charters. In her mind, this is tantamount to “legal corruption.”