Uniformed Services: Census Bureau State and Local Government Finance Data for FY 2004 and FY 2014

The big revelation when former Mayor Bloomberg put all the costs for most big New York City agencies, including pensions and fringe benefits, on one page, and deducted federal and state aid to show city-funded expenditures, was how expensive the so-called uniformed services – police, fire, correction and sanitation –are for city taxpayers. While health and welfare and education cost as much and more overall, there is substantial federal and state funding for those services. In FY 2014, according to New York City’s February 2014 Financial Plan Budget Summary, the uniformed services cost $17.4 billion, 23.5% of the $73.8 billion in total spending by the City of New York. As for city funds, however, these services cost $16.5 billion, 31.5% of the $52.25 billion in total city costs.

Many other city services, moreover, are provided by private, often non-profit organizations, or other agencies such as the Metropolitan Transportation Authority. What is spent on these services in a given year is what they cost that year. The uniformed services and the public schools, on the other hand, have retirement benefits that are much richer than those of other city workers, let along private sector workers, and these benefits that can be gamed or suddenly increased by the state legislature. Thus we are actually still paying more today, and will pay still more tomorrow, for work provided by the uniformed services in FY 2014, as a result of pension spiking and retroactive pension increases. But how much did they cost at the time, how did that compare with FY 2004, and how does this compare with the national average, the rest of New York State, and other states? That is the subject of this post.

This is yet another post in a series based on state and local government finance data from the U.S. Census Bureau for FY 2004 to FY 2014. The first post, which explains where the data comes from and how it was tabulated, and includes a spreadsheet with data for all the states and all the categories, is here.

https://larrylittlefield.wordpress.com/2017/02/20/state-and-local-government-finance-census-bureau-data-for-fy2014-compared-with-fy-2004/

A separate, reorganized spreadsheet with a table showing expenditure data for state and local government police, fire protection, corrections and sanitation expenditures for all the states, and the charts in the rest of this post, is here.

Uniforms All State

As for the spreadsheets in the other posts in this series, I left in a tab with a table from the 2012 Census of Governments, with data for every county in New York and New Jersey and selected counties elsewhere in the U.S.  This data, the most recent available, is mostly by state, for FY 2014 and FY 2004, but with New York City and the Rest of New York State tabulated separately.

As noted in my review of March 2014 public employment data for most of these categories last year,

https://larrylittlefield.wordpress.com/2016/04/17/state-and-local-government-employment-in-2002-and-2014-police-correction-and-fire/

New York City had 2.8 times as many police officers per 100,000 residents as the U.S. average that year. In the past it had three times the average and more. New York City also had far more former police officers collecting pension benefits than those still on the job, something that has been true for decades. Given these facts, the cost of New York City’s local government police expenditures may be considered something of a bargain, even though it is higher than just about anywhere else.

Chart1a

The NYPD cost $9.94 per $1,000 of New York City residents’ personal income in FY 2014 according to this data, 67.3% higher than the U.S. average of $5.94, despite a crime rate that is just about average. Local government police expenditures are below average in other places nearby, at $5.79 per $1,000 of personal income in the Rest of New York State, $5.47 in New Jersey, $3.85 in Connecticut, $3.87 in Massachusetts, and $4.24 in Pennsylvania. So is the number of police officers relative to population.   Police spending equaled $7.14 per $1,000 of personal income in California. Police officer cash pay tends to be higher there. Spending is also high in lower income, higher crime Florida, at $8.00 per $1,000 of personal income.

In most states State Police expenditures are a low share of state-local expenditures on police, and equaled just $0.95 per $1,000 of personal income in FY 2014. But state police expenditures tend to be higher in the Northeast, particularly in geographically small states, at $1.04 per $1,000 of state residents’ personal income in New Jersey, $1.00 in Connecticut, $1.97 Massachusetts and $1.52 in Pennsylvania. Spending on the Texas Rangers is also high, at $1.26 per $1,000 of personal income.

New York State’s state police expenditures, on the other hand, are relatively low $0.68 per $1,000 of personal income. The chart assumes that the state police are evenly distributed between New York City and the Rest of New York State. In reality I can’t ever recall seeing a state police officer south of I-84. I was unable to find data showing where New York’s state police are stationed by county. But most of them are in Upstate New York, and if New York’s state police expenditures were compared only with the personal income of Upstate residents, instead of all state residents, the State of New York would end up near the top in state police expenditures per $1,000 of personal income.

Despite what the Census Bureau’s “direct expenditures” on police would imply, the New York City local government police are, in reality, no bargain at all. They are probably one of the most expensive police forces in the United States. Based on the table of page 19 of the February 2014 Financial Plan Budget Summary, the NYPD cost $9.2 billion. The Census Bureau data only includes $5.2 billion in its direct police expenditures. As noted in my overview of how the data is presented, the City of New York lumps the employee benefits of nearly all agencies into “General Other” in Census Bureau data, a category of expenditures for which NYC is vastly higher than the U.S. average. While it is uncertain how other places report this data it likely varies. This makes New York City’s local government expenditures by category seem lower, relative to the U.S. average and other places, than they actually are, in any government function for which fringe benefits account for a large share of total expenditures.

Chart1b

Data for taxpayer pension contributions is reported to the Census Bureau separately, and including them gives a clearer picture of the cost of the NYPD. This chart includes $7.5 billion of the $9.2 billion in NYPD expenditures in FY 2014.   Expenditures had been falling per $1,000 of personal income from FY 2010 to FY 2014, as the income of city residents began to rise after the Great Recession and the income of New York City police officers began to stagnate as a result of expired labor contracts. Those contracts have recently been settled with retroactive pay, meaning spending in past years was in reality higher than it appears.

Chart1c

Including only the costs reported to the U.S. Census Bureau as specifically police costs, including wages and salaries and non-personnel, non-interest costs, New York City’s local government police expenditures fell slightly from FY 2004 to FY 2014, compared with the total income of New York City residents. The decrease was from $10.85 per $1,000 of city residents’ personal income to $9.94. New York City was not unusual, as local government police expenditures fell in most places per $1,000 of personal income from FY 2004 to FY 2014. The decrease was from $6.03 to $5.94 for the United States, from $6.09 to $5.79 for the Rest of New York State, from $6.02 to $5.47 for New Jersey, and from $4.20 to $3.87 in Massachusetts. This is part of the general shift from spending on actual public services and current public employees to spending on unfunded and retroactively increased costs from the past such as debts and pensions, and past public employees, as discussed here.

https://larrylittlefield.wordpress.com/2017/03/05/overview-of-state-and-local-government-expenditures-fy-2014-vs-fy-2004-census-bureau-data/

There are some exceptions, at least by appearances. Local government police expenditures increased from $3.81 per $1,000 of state residents’ personal income in Connecticut, from $4.01 to $4.24 in Pennsylvania, from $4.86 to $6.23 in North Carolina, from $7.78 to $8.00 in Florida, from $6.81 to $7.25 in Illinois, from $5.06 to $5.36 in Minnesota, etc. This could be the result of weaker income growth, with expenditures rising per $1,000 of personal income for that reason rather than increased spending on the police. Or these increases could actually be increases in public employee pension and other fringe benefit expenditures, counted separately for each government function in these states rather than lumped together as in NYC.

Just based on the data as presented New York City’s local government police expenditures were higher measured per $1,000 of area residents’ personal income than the average for any other state, save for the District of Columbia. And although urban police expenditures tend to be higher, FY 2012 Census of Governments data shows that New York’s expenditures were higher that virtually all major urban counties as well. Given how expensive the NYPD is, how great other needs are, and how high New York’s state and local tax burdens already are, why isn’t there more pushback against the cost of the police in New York City? Why did the City Council demand 1,000 more police officers given that New York City’s police officer employment is already sky high? I think this might explain it.

Shootings RATE PER 100K RESIDENTS

As long as New York City crime is low, but memories of much higher crime are fresh, the NYPD can get away with excess costs and staffing, or so it would seem. But that won’t last forever. The Patrolman’s Benevolent Association has succeeded in getting contracts and pension benefits that cause the total compensation per New York City police officer to be sky-high, even as the starting pay for new officers is rock bottom. With retirement after just 20 years of work, and perhaps 40 years in retirement, a benefit found elsewhere only the U.S. military, where only 17 percent of all soldiers stay around to long enough to collect.

Recently, the New York Times reported on a study of what California police officers and firefighters were “paid,” and shows that most were paid more than $200,000 with many at more than $300,000. No, they weren’t paid that much in cash, although cash pay is higher there than it is here. That included the cost of benefits.

Pensions guaranteed to California police and fire personnel allow them to retire in their 50s and draw 70 percent or more of their peak pay as long as they live. Most private sector employees have no pensions.

This is something the New York Times would never report for New York City. Neither would most local media outlets. Just as the media doesn’t bring up the 2008 retroactive pension increase for NYC teachers, also under Omerta when school funding issues are in the news. Instead the media only reports the “negotiating in the press” statements by the PBA about underpaid officers, based on the rock-bottom starting pay they have arranged. But the total cost of the police in California was once under Omerta too. And pension costs – and taxes — are vastly higher in New York City than in California.

Chart1g

Shown on the same scale as local police expenditures, state police expenditures are much lower per $1,000 of personal income. Nationally they were the same in FY 2004 as in FY 2014, but with increases in some states and decreases in others.  New York’s state police expenditures fell from $0.86 per $1,000 of state residents’ personal income in FY 2004 to $0.68 in FY 2014. In Massachusetts, on the other hand, there was an increase from $1.18 to $1.97. Some time between those two years it came out that the Boston office of the FBI and the Boston city police were in cahoots with the Irish mafia from the 1970s through the 1990s, but the state police were not.

 

Prisons are one of the public few services that are carried out directly by state governments, rather than local governments, with local jails typically used for those awaiting trial or convicted of minor infractions.

Chart2a

For the U.S. as a whole state government corrections expenditures totaled $3.23 per $1,000 of personal income in FY 2014, with local government expenditures at $1.82 per $1,000 of personal income. New York’s state corrections expenditures were relatively low at $2.77 per $1,000 of personal income. They are assumed to be evenly distributed between New York City and the Rest of New York State in the chart. (In reality a higher share of the prisoners come from New York City, but all of the prisons are located elsewhere).

But New York’s local government corrections expenditures were very high at $3.14 per $1,000 of personal income in New York City, and somewhat high at $2.40 per $1,000 of personal income in the Rest of New York State. Nevada and the District of Columbia were the only states were local government correction expenditures were higher, per $1,000 of state residents’ personal income, than in New York City.

Among the states in the chart only California, which has both a high level of incarceration and relatively high standards for prison conditions, had higher state and local corrections expenditures combined than New York City. The California level was $7.23 per $1,000 of state residents’ personal income, higher than New York City, at $5.91 per $1,000 of city residents’ personal income. With the caveat that, as for the police, the pensions and other fringe benefits of corrections officers are not counted here, and may be at least partially counted there.   Based on the data available there were quite a few other states where state and local corrections expenditures combined were higher, relative to taxpayer income, than in NYC.

Chart2b

Lower crime seems not to have affected the number of police officers in NYC, but it has apparently affected the number of jailers, despite the use of prisons as a jobs program upstate until recently. State government corrections expenditures fell per $1,000 of personal income from FY 2004 to FY 2014, in the U.S. as a whole and in every state I chose to chart other than California and Massachusetts. Expenditures also increased over the decade in Oregon, Alaska, Delaware and Montana.

State corrections expenditures by this measure fell by 12.0% in the U.S., 14.3% in New York State, 18.0% in New Jersey, 30.1% in Florida, and 31.0% in Oklahoma. Although in at least some places this may be yet another manifestation of falling expenditures on public employees who are working, offset by soaring expenditures on those who are retired, with the latter not included in this data.

Chart2c

Local government corrections expenditures fell by 6.0% in the U.S. as a whole from FY 2004 to FY 2014, when measured per $1,000 of personal income, but many states had increases. New York City’s decrease was 14.1% in spending on corrections today, offset in part by rising pension and fringe benefit costs from the past. The Census Bureau data shows just over $1.6 billion in New York City local government corrections expenditures in FY 2014. The total cost, according to data that used to be provided by the NYC Office of Management and Budget, was over $2 billion. According to Census Bureau data, local government corrections expenditures decreased by 7.2% in the Rest of New York State, measured per $1,000 of personal income, and increased by 4.6% in New Jersey. No such expenditures are reported for Connecticut and Massachusetts.

Chart3a

New York City’s local government fire protection expenditures totaled $3.86 per $1,000 of city residents’ personal income in FY 2014, above the U.S. average of $2.98, the $2.70 for the Rest of New York State, and the $1.79 for New Jersey.   Comparisons between places are much less telling for this service than for police and corrections, because in many places fire departments are manned either by volunteers or by a mix of volunteers and professionals. The NYFD is completely professional, and this difference makes its cost seem higher relative to the U.S. average and the rest of the Northeast than it actually is.

Chart3b

Working the other way, and causing the cost of the NYFD to be under-reported for New York City in Census Bureau data, is the lumping of all pension and other employee fringe benefits into General – Other, and the sky-high level of the city’s pension benefits themselves. New York City firefighters get to retire at any age after working just 20 years, and there are therefore far more retired firefighters than active firefighters. In addition a huge share of the city’s firefighters are awarded disability pension benefits, and thus a pension payments at 75 percent of final pay including overtime, instead of just 50 percent. Despite this the former head of the firefighter’s union was recently appointed head of the firefighter’s pension fund by the DeBlasio Administration, with no comment from anyone.

The Census Bureau data put FY 2014 expenditures specifically on the New York City fire department at about $2 billion. But OMB data put the real total at $3.8 billion, or nearly double. Including taxpayer pension contributions from another Census Bureau series brings the total in this chart for FY 2014 to about $3 billion, or $5.72 per $1,000 of city residents’ personal income, far higher than the average for any other state. Although pension and fringe benefit costs may be excluded in other places as well.

Chart3c

Like New York City police officers, New York City firefighters were working on expired contracts in FY 2014, which suppressed their cash pay at the time. Despite this New York City’s local government fire department expenditures, as measured by the U.S. Census Bureau, increased from $3.79 per $1,000 of city residents’ personal income in FY 2004 to $3.86 in FY 2014, an increase of 1.6%. The U.S. average increased 3.4% over a decade by this measure, although there were decreases in most northeastern states. As Illinois went bankrupt as a result of soaring pension costs, its local government fire protection expenditures increased from $3.32 per $1,000 of state residents’ personal income to $3.90, an increase of 17.3%. Perhaps, unlike in NYC, the Illinois data also includes the cost of the retired.

Like fire protection expenditures, sanitation expenditures are difficult to compare from place to place using Census Bureau data because of the way the services is provided, or not provided, in some of them. In New York City solid waste collection is primarily provided by public employees, although businesses are required to hire private carters. Thus both the expenditures and the employment show up in Census Bureau data for NYC. In other places municipalities contract with private carters to provide residential solid waste collection. Their data shows the expenditures, but not the employment. Finally, in yet other places residents are required to arrange for solid waste collection themselves, and neither the expenditures nor the employment shows up in local government data.

Chart4a

So it is not surprising that at $2.91 per $1,000 of city residents’ personal income in FY 2014, New York City’s sanitation expenditures for FY 2014 were higher than the U.S. average of $1.49, the Rest of New York State at $2.18, New Jersey at $1.91, and any other states other than Alaska and Hawaii. Although for New York City the total expenditures in the chart are $1.6 billion, while OMB shows a total including pensions and fringe benefits of about $2.4 billion that year.

Chart4b

Just taking what is counted specifically as New York City local government sanitation expenditures in Census Bureau data, there was a decrease from $3.52 per $1,000 of city residents’ personal income in FY 2004 to $2.91 per $1,000 of personal income in FY 2014. In part because of expired contracts, with more money for FY 2014 being paid today, retroactively.

But also in part because the city’s population and income increased, but its sanitation employment did not, which is a productivity gain. This shows how rising population can lighten the burden of public services on taxpayers. But this also works in reverse, as New York and other cities found out in the 1970s. With sanitation collection routes fixed by contract and the population falling, some sanitation workers were only working a couple of hours per day. Now the same routes serve more people.

Sanitation expenditures fell per $1,000 of area residents’ personal income just about everywhere from FY 2004 to FY 2014. The decrease was 17.2% for New York City, 14.5% for the Rest of New York State, 18.1% for New Jersey, 20.8% for Connecticut, 28.8% for Massachusetts, and 14.0% for the United States.

 

As noted in my overview of non-tax local government revenues,

https://larrylittlefield.wordpress.com/2017/03/02/state-and-local-government-revenues-other-than-taxes-census-bureau-data-for-fy-2004-and-fy-2014/

Charges for services accounted for 25 percent of total local government revenues in the U.S. in FY 2014, only slightly below the 27 percent funded by property taxes. Local governments, therefore, operate many services as business enterprises, albeit subsidized enterprises that don’t always cover all of their costs. Many of these local government enterprises are in the Infrastructure category, the subject of the next post. Another one, in most of the country, is solid waste collection and disposal.

Chart4g

Charges for services accounted for 74.2% of total U.S. local government sanitation expenditures in FY 2014. The total was 100.0% or more in some states, albeit with the cost of debt service on sanitation facilities never included in the expenditures, and the cost of pensions and other fringe benefits sometimes excluded. The share of local government sanitation expenditures funded by charges was 47.0% in the Rest of New York State, 42.9% for New Jersey, 43.0% for Connecticut, and 34.6% for Massachusetts. Charges covered virtually all of the cost of local government sanitation expenditures in low-tax Florida. And essentially none of it in New York City, where solid waste collection is free for city residents.

In part this is traditional, the way it has always been here. In part it is redistributionist. With a wide range of income groups living in the big, diverse city, compared with smaller, homogenous suburbs, charges would fall more heavily on some people than others.

In part, moreover, an absence of charges for sanitation may be a necessary response to New York’s status as a gateway city for immigrants. In most of the world respect for the common realm is much lower than in the United States, and the streets and beaches are littered with garbage. Even in Paris the sidewalks are full of dog excrement, the way the sidewalks of New York were 30 years ago. So if there were a charge for garbage pickup, some New Yorkers might just throw the trash out their windows, as in other countries, and as in parts of New York City in the 1970s.

Chart4h

Charges for services increased as a percent to local government sanitation expenditures between FY 2004 and FY 2014, in the United States and in most states. That makes sense, as there has been a scramble for revenues – and an aversion to tax increases – in state and local government since the year 2000 or so, a scramble that has also led to rising fines in some places, a proliferation of casinos in others, and rising fees elsewhere. But there were decreases in sanitation charges as a percent of sanitation expenditures in New Jersey, Connecticut, Minnesota, Oklahoma and Washington, just among the states charted.

The next post will review state and local government expenditures on infrastructure, and how they are paid for.

Advertisements