Mayor Bloomberg says a move by Connecticut officials to lure away some of New York's top hedge funds has already gained ground and is placing most of the blame on Albany lawmakers. NY1's Bobby Cuza filed the following report.
When Albany lawmakers last month proposed a tax hike on hedge-fund managers, Mayor Michael Bloomberg called it the best thing to ever happen to Connecticut. Sure enough, Connecticut governor Jodi Rell is now making a personal pitch to New York-based hedge funds, inviting them to relocate.
"She’s doing what she should do. And we should be out there doing the same thing -- making this a more attractive place to do business. There’s some things the city can do and we’re doing those, I think. the state is not doing its job," said the mayor.
What the state is considering would target hedge fund managers who work in New York but live out-of-state. Right now, the money they earn from managing investments is taxed only in their home state. Under the proposal floated by Governor David Paterson, that money would be taxed in New York like ordinary income, raising an estimated $50 million a year.
After Bloomberg made his feelings known, Governor Paterson seemed to back off the proposal. But several weeks later, state lawmakers have still not come to an agreement on a final state budget, which means the idea is not completely off the table.
Rell made note of that in a letter to hedge-fund managers, and invited them to an intimate dinner at a Darien, Connecticut steakhouse. One of the letter’s recipients was Tim Selby, an attorney at the firm Alston & Bird and president of the New York Hedge Fund Roundtable.
"I think Connecticut is showing a greater appreciation for the hedge fund industry than New York seems to be. So, you know, Governor Rell’s solicitation is a welcome one," Selby said.
When asked Thursday if he would ask Rell to back off, Bloomberg said it was no laughing matter.
"What am I going to say to her? I’m gonna say to her, Raise your taxes? She’s gonna say to me, 'Hey bozo, you guys should cut it.' What is this? This isn’t funny. This is our jobs," said the mayor.
As to whether he will accept the dinner invitation, Selby says it’s under consideration.