Medicaid: The Rest of New York State (Re) Declares War on New York City

After the 1994 election, the one that saw the Republicans take Congress after decades of Democratic dominance, the New York Times published a “portrait of the electorate” based on exit polls. It showed that the 1960s generation was the one most likely to vote Republican that year. “Those hypocrites” I thought. They were “liberals” in their youth when they wanted to get out of serving in Vietnam, and now they are “small government” “conservatives” when they are at their earnings peak and they don’t want to pay taxes, but I’ll bet they’ll be “liberals” again when its time to collect on federal old age benefits. But they surprised me by being even worse than I thought. They still want even more tax cuts for themselves, and even more old age benefits for themselves, such as the Medicare prescription drug benefit. They want to borrow to pay for it. And to ensure our foreign creditors that the money will be paid back by someone else, they also want deep cuts in public services that younger generations need now, and drastic reductions old age benefits — not for themselves but for those to follow them – effective in the future.

With their aging, stagnant populations, the Downstate Suburbs and Upstate New York are now disproportionately occupied by, and almost exclusively represented by, members of Generation Greed. And back in the 1990s I had similar thoughts about their possible upcoming hypocrisy with regard to Medicaid funding, and specifically the local taxpayer share of it. But once again I’ve been surprised, because once again my cynicism was insufficient. They are even worse people than I thought. And it’s past time from them to be called to account for it.

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Metro NY Transit Revenues and Capital Expenditures: Data from the 2015 National Transit Database

I was a mass transit fan when mass transit wasn’t cool. My first job after graduate school was at New York City Transit, in logistics and inventory control in the mid-1980s, and I was a loyal transit rider for decades (though if I had gotten into bicycle transportation sooner, I might weigh 40 pounds less today). And I studied transit systems, read books about them, and after the development of the internet allowed those with similar interests but not much free time to communicate, made the acquaintance of other transit buffs and transit historians.

For much of the time from the late 1970s to today, metro New York’s rail transit system was on the upswing. Management improved, some of the worst labor abuses of the past were done away with (at least on the subway), and money was invested. As a result reliability improved, the inflation-adjusted cost per vehicle revenue hour fell until the mid-1990s, ridership increased and filled the trains, and the cost per rider fell even faster. Today ridership and revenues are vastly higher than 20 or 30 years ago on all major rail transit systems in metro New York, and those transit systems have been the engine of the New York Metro economy. If I and other transit buffs could go back in time 30 years, to the crime and grime and constant breakdowns of the 1980s, and know nothing of today other than how high ridership and transit revenues now are, what would we have thought the transit system would be like in 2017? We certainly would not have expected the disaster we seem to be facing. And collapsing systems despite soaring ridership are present elsewhere in the U.S. as well.

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Metro NY Transit Costs: Data from the 2015 National Transit Database

It has been a few years since I downloaded and compiled mass transit finance data from the Federal Transit Administration’s National Transit Database, so I redid the analysis to see if anything had changed since 2012. Boy, it sure has. Between 2012 and 2013, based on that data, the reported operating cost of the New York City subway soared by 27.2% in just one year, an increase of more than $1 billion.   There were no similar spikes among other major transit agencies in Metro New York. Suddenly the share of the subway’s operating costs that is covered by the fare is merely somewhat better than Metro North and the Long Island Railroad, instead of much, much better. And the wages and benefits of NYC subway workers, per hour worked, are the second highest behind PATH among major U.S. rail systems, instead of lower than those of NYC bus workers.

I’m not saying the figures for either year are false. In fact, as you’ll read, I have a possible explanation. But the new figures sure solve a lot of political problems. For TWU head John Samuelsen, who came out of the bus division and might have been catching heat from subway workers. For Governor Cuomo and suburban politicians, who might have been catching heat for the vastly higher level of subsidy for the suburbs. And for LIRR workers and their unions, who might have been concerned that featherbedding and graft would become more of a public issue, despite their control of – actually I’m not sure which politicians they control.   But let’s take a look at what the data now shows, for 2015 and over the past 25 years. This post will cover operating costs, and the next one revenues.

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Generation Greed: They Aren’t Using Those Words, but Some Folks Are Starting to Connect the Dots

After a three-decade party, with some folks getting to party a lot more than others, there is suddenly no way to avoid the reality other than drifting into closed-eyed fantasy. The generations I have identified as Generation Greed, the richest in American history, are leaving the generations to follow are much worse off in many ways. And, in many cases, those at the back end of Generation Greed are facing old age much worse off then they themselves had been, forced by their prior excess consumption, debts and prior lack of savings to downsize a material lifestyle that for many of them had been the whole project of their lives. As I most recently noted in detail in my previous post.

https://larrylittlefield.wordpress.com/2017/04/25/generation-greeds-last-economic-orgy-federal-reserve-z1-debt-data-for-2016-rising-housing-prices-census-bureau-data-on-worse-off-young-adults-falling-life-expectancy-etc/

The consequence of this realization has not been an increase in empathy or an attempt to change the worst aspects of a collective legacy while there is still time. There is still no willingness to make any personal sacrifices in the present for the collective future. The fact that the non-greedy minority of Generation Greed hasn’t stepped up to face the facts and battle for their own offspring is one final disappointment. The desperate desire of some of its rich to insulate their own children from the consequences of a diminished society — by repealing the estate tax — is the only effective example of concern by today’s seniors with what they will leave behind. Rather, the media they dominate remains filled with demands for scapegoats and rationalizations, and one more round of “what about my needs!” Needs that are somehow supposed to be met by latter born generations that are poorer, and yet are having large economic burdens shifted to them that will diminish their entire future.

But if one uses the right search terms, one can find some examples over the past year of younger generations beginning to resent the country they have inherited, albeit not enough to get off the couch and do something about it.

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Generation Greed’s Last Economic Orgy: Federal Reserve Z1 Debt Data for 2016, Rising Housing Prices, Census Bureau data on Worse Off Young Adults, Falling Life Expectancy, Etc.

The problem with socialism is that you eventually run out of other people’s money” – Margret Thatcher in 1976

The problem with capitalism is that given enough inequality, eventually businesses trying to sell things run out of other people’s money” — Larry Littlefield, 2016

For 35 years, generations of Americans born after 1957 or so have been paid less but sold more, with the difference covered first by more household members in the workforce, then by inadequate requirement savings, and then by soaring public and private debt. The richest and most entitled generations in U.S. history worked hard and were very creative, but they over-consumed what even they were able to produce and expected too many years in retirement with too little in savings, at the expense of the poorer generations that have followed them. With some members of those generations grabbing far more than the others. With too much money in too few hands, the whole world economy has become dependent on Americans spending more than they had. And since America finally started to go broke with millions retiring into poverty, the world economy has faced a global crisis of demand.

When you put all the trends together, as I have below, it adds to a shocking picture that puts every current debate in context. Today’s young adults paid less than Generation Greed was paid at the same age in 1975, and forced by government policy to pay more for housing. Life expectancy falling. Personal and federal debts once again soaring, all the mistakes of the 2000s being repeated. Topping it off, we now have Donald Trump as President. Does this mean that the U.S. is finally prepared to admit, face and tackle its problems? Or does it mean that the most over-privileged and entitled members of the most over-privileged and entitled generations in U.S. history are just grabbing more, in one last economy orgy before the final collapse?

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Local Government Employment in New York: Annual Average Data for 2016

About a month ago, the U.S. Bureau of Labor Statistics released 2016 annual average employment data from the monthly Current Employment Survey. It isn’t the most detailed information with regard to local government, but it is the most timely, so I once again put together a series of charts showing the trends.

The data shows that after a period of austerity, local government employment is rising again in New York State. The increases are not large, and in New York City local government employment is still rising more slowly than private sector employment. But in the Rest of New York State the increase in the ratio of private employment to local government has halted. Moreover, elementary and secondary school employment, which soared in the Rest of New York State under former Governor George Pataki’s “everybody onto the payroll to get a pension” policies, is rising again despite (at least according to the latest data I’ve seen) falling school enrollment. And in New York City, private sector (but presumably mostly Medicaid-funded) home health care employment has soared at a pace and to a level that raises questions about what the heck is going on.

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Bureaucracy: Census Bureau State & Local Government Finances Data for FY 2004 and FY 2014

This, the final post a this compilation of the most recent state and local government finances data from the Census Bureau, is about administrative functions I have grouped together as “bureaucracy.” It includes data on the most governmental of government functions: the kind of activities one might expect to find taking place in city and town halls, county seats, county courthouses, and state capitals. Reviewing applications, keeping records and doing inspections, rather than providing services. The functions included are, as delineated by the U.S. Census Bureau, Judicial and Legal, Financial Administration, Protective Inspection & Regulation, Central Staff, General Public Buildings and, at the state level, Social Insurance Administration (state Departments of Labor). I also include Health, because it overlaps with these categories, as it includes not only “provision of services for the conservation and improvement of public health, other than hospital care” but also “health related inspections – inspection of restaurants, water supplies, food handlers, nursing homes, agricultural standards or protection of agricultural products from disease” along with animal control.

The situation and trend for these public functions is the same as most of the others. Expenditures on public services provided today is going down, when measured per $1,000 of area residents’ personal incomes, as pension expenditures are going up. The result is lower pay and benefits for new public employees, falling state and local government employment relative to population, and – unless there are increases in productivity to offset this – falling public services received. With the rise of information technology, productivity gains in bureaucratic categories are certainly possible, but with public employee unions, civil service laws, and politics they are uncertain to unlikely.

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