Public Amenities & Vices: 2017 Census of Governments Data

Over the years I’ve heard so-called conservatives try to make the case that the business sector is the foundation of the economy, while the public sector provides nice-to-have services that we may or may not be able to afford.  As if what the government does is the cherry on top of a sundae, perhaps desirable but not absolutely necessary.  There is a reasonable “conservative” case to be made about the relative value of services produced by the public and private sectors, but that isn’t it. The types of services that can’t fund themselves, and are in the public sector, include education, much of health care, most infrastructure and public safety.  And certainly aid to the needy.  The types of services that can fund themselves with sales in the private sector include alcohol, tobacco, other pleasurable but addictive substances, gambling, pornography, and prostitution.  Do we need less of the former, and more of the latter?

Perhaps the conservatives where thinking about the subject of most of this post:  Parks, Recreation, Culture, Natural Resources, and Libraries.  They have certainly been among the first services to be wiped out in NYC when money gets tight, along with services to keep poor children from being abused, neglected and killed.  But there was no fiscal crisis going on in FY 2017, the year of the latest Census of Governments, or in FY 2007 and FY 1997, prior Census of Governments years.  So how much was spent on these services then, in NYC and elsewhere?  This uses post Census of Governments data to find out.

 

You haven’t heard much about “unnecessary” public services during the coronavirus pandemic.  In fact, what has been discovered is that the public sector includes a substantial share of what has been deemed “essential workers.”

Meanwhile, many people and businesses are considering abandoning New York City, because without shared spaces such as parks, cultural institutions and libraries the value of city life disappears.  If you are going to be alone in a room watching Netflix, you might as well be in the suburbs, or in Texas now that they have air conditioning.  For others, social distancing has been a reminder of exactly what it is that they value, and why they are here.  These services, along with mass transit, are the only services most the city’s working, taxpaying, young adult and empty nester cash cows actually use, and need.  Most public spending, as discussed in a prior post, is actually on the young and old, on children in public education, and money and services for seniors.

Living in a city means giving up some private indoor and outdoor space to gain the benefit of shared amenities.  New Yorkers, however, are dependent on shared spaces even compared with the residents of other large cities, and even other older major cities.

According to the U.S. Census Bureau’s American Community Survey just 9.1% of New York City housing units were in detached, one-family homes, with their tiny private “parks,” compared with 61.7% of U.S. housing units. And just 6.9% of NYC housing units were in attached, one-family rowhouses, homes that have outside sitting areas if not playing areas, compared with a U.S. average of 5.9%.  That is not a surprise.  What might surprise some is how unusual the high 54.1% share of housing units in buildings with 10 or more units in NYC is, even among large and and older cities.

The characteristic housing type of New England cities is a 2-4 family house, often detached, including the “triple decker” detached house with one housing unit per floor.  These typically have outdoor space available to residents of all the units.

https://www.bostonmagazine.com/property/2018/03/22/triple-decker-new-england-love-story-documentary/

From Philadelphia down to Alexandria in Northern Virginia, one-family rowhouses predominate.  These account for 59.0% of the housing units in the city of Philadelphia, and 52.4% in Baltimore.

https://ggwash.org/view/67904/why-dc-has-so-many-rowhouses-and-how-theyre-different-from-townhouses

Chicago has its one-family detached bungalows and three-flats. It is the physical size of all of New York City, but has the population of Brooklyn alone.  Elsewhere in the Midwest one-family homes predominate even in central cities.  In Minneapolis, Mary Tyler Moore’s apartment in an older home that had been subdivided into apartments.

The garden apartment complexes of later-built Sunbelt cities, from Charlotte to Los Angeles, generally have outdoor space available to residents.

https://www.laconservancy.org/issues/garden-apartments

When New Yorkers want to be outside and get some exercise, in contrast, they once played in the streets, but now must head for the parks. So is more spent on parks in New York City?

The spreadsheet with the tables and charts used in this post is here.

PublicAmenitiesAllState

And a table with most of the information is here.

The discussion begins with state and local government Parks, Recreation and Culture.

The data shows that the State of New York and its local governments spent $2.43 per $1,000 of state residents’ personal income on these functions in FY 2017, below the U.S. average of $2.65 and the 32ndmost among states.  New York State spent $0.51 on state parks, above the U.S. average of $0.34, and New York’s local governments spent $1.93 overall, with $2.09 spent in New York City and $1.78 spent in the rest of NY State – all well below the U.S. local government average of $2.31.

State and local government Parks, Recreation and Culture expenditures were extremely low in New Jersey, at just $1.26 per $1,000 of state residents’ personal income, and in Connecticut, at just $0.98.  These states ranked 49thand 51stin the country.  In fact the entire Northeast spent relatively little on these shared spaces per $1,000 of personal income, with Massachusetts ranking 50that just $1.06, New Hampshire ranking 48that just $1.38, Maine ranking 47that $1.53, Pennsylvania ranking 46that $1.55, Vermont ranking 42ndat $1.93, and Rhode Island ranking 41stat $1.94.  This despite the fact that there are relatively few national parks in the Northeast, compared with other parts of the country, and in particular the West.  In the home of the village green, shared spaces are not abundant.

States with high spending on state and local government Parks, Recreation and Culture, per $1,000 of their residents’ personal income, included North Dakota at $9.40, Colorado at $4.91, Hawaii at $4.78, Illinois at $4.52, Minnesota at $4.24, Nevada at $4.24, Wyoming at $4.13, and New Mexico at $4.06.  Low tax Florida, at $3.25, was above the national average, and the 15thhighest. Parks, Recreation and Culture is something that low-tax state spends on that the Northeast does not. California was also slightly above average at $2.72, and ranked 22nd.

For most New York City residents the relatively high level of stategovernment Parks, Recreation and Culture expenditures in New York State provides little benefit.  Very little of that spending takes place within the city’s boundaries, save for one state park built on a sewage treatment plant in Manhattan and another on a former landfill in Brooklyn.  And yet most New York State parks were built before the development of the suburbs with the intention of serving city residents – but only those with private automobiles.  The extensive network of bus and train service, from the city to natural areas Upstate, withered away in the suburbanization era.

https://larrylittlefield.wordpress.com/2014/05/25/get-outta-town/

New York’s unique network of “parkways,” roads that exclude buses and are limited to private passenger vehicles, further limits city residents’ access to state Parks, Recreation and Culture facilities elsewhere, by design.

https://www.citylab.com/transportation/2017/07/how-low-did-he-go/533019/

And the uniquely high cost and limited availability of rental cars in New York City limits access to state parks further.

https://larrylittlefield.wordpress.com/2015/07/23/brooklyn-home-of-the-rental-car-ripoff/

With the national average at  $0.34 in state government spending per $1,000 of personal income, however, and $2.31 in local government spending per $1,000 of personal income, Parks, Recreation and Culture is primarily a local service. Spending in the related Natural Resources category, on the other hand, is mostly at the state government level.

According to the classification manual code 59, Other Natural Resources, includes conservation, promotion, and development of natural resources (soil, water, energy, minerals, etc.) and the regulation of industries that develop, utilize, or affect natural resources.  Other related codes include Agriculture, Fish and Game, and Forestry, all prominent services in rural areas.  There is an overlap with Parks, Recreation and Culture in many places, particularly New York State, where the Department of Environmental Conservation operates its own campgrounds and parks separately from the state Parks Department.

https://www.dec.ny.gov/outdoor/7825.html

In FY 2017 the national average for Natural Resources spending, per $1,000 of state residents’ personal income, was $1.28 at the state government level, $0.62 at the local government level, and $1.89 overall.  New York State ranked dead last at $0.52, joined by other Northeastern states such as Massachusetts, 50that $0.53, New Jersey, 49that $0.78, New Hampshire, 48that $0.83, Connecticut, 47that $0.84, Pennsylvania, 40that $1.17, and Rhode Island, 39that $1.18.

Click to access publiclandownership.pdf

It isn’t because Northeastern states had less land to manage. State governments owned about 8.7% of the total land in the United States in 1995. New York ranked first, with 36.7% of its land in state ownership.  New Jersey ranked 3rdat 15.6%, and Pennsylvania was also above average at 12.75%.  This may surprise New York City residents, who are unaware how big a deal hunting and fishing on state lands is Upstate.

Middle class hiking, camping and vacationing in the rural and natural Northeast had a surge of interest in the 1920s and 1930s, when many New York State parks were built, and a resurgence in the 1960s and early 1970s, with the increase in environmentalism.  As the richest generations in U.S. history, those born 1930 to 1957 or so, got richer, however, they began traveling to far-off destinations by airplane instead.   Many of the services one might have found in state parks in the 1960s and earlier are absent today.  Millennials, much poorer than the generations that preceded them, have rediscovered these more local destinations, but reductions expenditures compared with overall personal income continue, and tax revenues are shifted elsewhere.

The FY 2007 to FY 2017 reduction in state government Parks, Recreation and Culture expenditures per $1,000 of personal income was 21.8% nationwide, 10.2% in New York State, 64.2% in New Jersey, 27.8% in Massachusetts, 52.1% in Illinois, 14.3% in California, 34.7% in Oklahoma, 18.3% in Colorado, and 40.4% in North Carolina.  There were small increases in Connecticut and Pennsylvania, but Connecticut’s spending had plunged from FY 1997 to FY 2007.

With regard to New York State, one can see how much higher state government Parks, Recreation, and Culture expenditures were, per $1,000 of state residents’ personal income, in the late 1970s – after presumably having been even higher earlier.   The figure for FY 1977 was $0.85 spent per $1,000 of income, compared with $0.62 in FY 1987, $0.56 in FY 1997, $0.56 in FY 2007, and $0.51 in FY 2017.    This was before there was a real fiscal crisis. As income rose, the money went elsewhere – to services for, and debts and pension debts run up by, the older generations still making the decisions.

Spending on state government Natural Resources agencies, per $1,000 of state residents’ personal income, followed the same trend.  The FY 2007 to FY 2017 decrease was 22.4% nationwide, 26.4% in New York State, 19.0% in New Jersey, 46.7% in Massachusetts, 12.7% in Pennsylvania, 2.7% in Michigan, 39.4% in Illinois, 20.6% in California, 44.5% in Oklahoma, and 36.0% in North Carolina.  An FY 1997 to FY 2007 decrease in Colorado was reversed in the following 10 years.   A big increase in Connecticut might be about to be reversed now.

At the local government level, New York’s FY 2017 Parks, Recreation, Culture and Natural Resources expenditures combined were below the U.S. average of $2.93 per $1,000 of personal income in every region of the state, and in all but four lower-income rural counties.  The $2.09 spent per $1,000 of city residents’ personal income in NYC compared with an average of $2.27 for the Downstate Suburbs, $1.75 in the Upstate Urban Counties, and $1.90 for the rural counties in the Rest of New York State.

Many of New York City’s Park, Recreation, Culture and Natural Resources facilities are operated by non-profit organizations, rather that by the City of New York itself.  That has been long true of the city’s botanic gardens, zoological gardens and museums.  It became true, in part, for several prominent parks during the 1970s fiscal crisis, and has become true of new parks added since, on the Brooklyn waterfront and Governors Island. Since the workers who maintain and operate these facilities are not government employees, they didn’t show up in the employment phase of the Census of Governments.

https://larrylittlefield.wordpress.com/2019/11/05/public-amenities-census-of-governments-employment-payroll-for-2017/

Expenditures at these organizations financed by fees for admission and donations will not show up in the finance phase of the Census of Governments either.  But the city’s payments to fund these organizations do show up, and based on the data above one might confidently say that NYC has below-average spending with above average need.

What New York City does have that most places do not is its waterways and beaches.  In theory the massive investment in Sewerage, compared with other infrastructure, over the past several decades ought to make those waterways more valuable for recreation. Attendance at the city’s ocean beaches does seem to have grown rapidly over the past 20 years, but the custom of city residents getting out on other waterways has not revived to what it had once been.  More people swam in the rivers in the 1940s, when they were filled with raw sewage.

New York City’s expenditures on local government Parks, Recreation, Culture and Natural Resources, per $1,000 of city residents’ personal income, were also low compared with most of the counties containing the nation’s largest and other prominent older cities.

The $2.09 for NYC in FY 2017 compared with $3.21 in Los Angeles County, $2.42 in San Francisco, $5.31 in Denver County, $6.22 in Washington DC, $7.68 in Miami-Dade, $2.99 in Fulton County (Atlanta), $6.56 in Cook County (Chicago), $3.82 in Mecklenburg County (Charlotte), $6.87 in Multnomah County (Portland, Oregon), $3.12 in Dallas County, $4.17 in Travis County (Austin), and $3.61 in King County (Seattle).

Parks, Recreation, Culture and Natural Resources spending per $1,000 of county residents’ personal income was lower than NYC in Baltimore City at $1.27, Suffolk County (Boston) at $1.44, Philadelphia at $1.23, and Harris County (Houston) at $1.52.   While parkland is limited in the city of Boston, the city of Philadelphia has an extensive park system – but little money to maintain it.

As is the case for New York’s state parks, there is an access issue for one of New York City’s local parks – the one on Governors Island.  I had long feared that if, unlike San Francisco’s Presidio, Governors Island was reused exclusively as a park, with no revenue producing activities to pay for it, it would end up draining funds from other city parks, those relied on by the less well off.  All while being accessible only to affluent people who could pay for a ferry ride.

Governor’s Island Nightmare

For a long time that didn’t come to pass, as a free ferry service was made available.  But with public employee compensation costs rising, a fare to Governors Island was quietly instituted.

https://govisland.com/blog/trust-for-governors-island-announces-next-chapter-in-governors-island-transformation

The fare was $3.00 per adult as of 2019.  Seniors don’t have to pay.

The Downstate Suburb average of $2.27 spent on local government Parks, Recreation, Culture and Natural Resources functions, per $1,000 of personal income, was higher than any of the suburban counties in northern New Jersey, or in Fairfield County, Connecticut.  But it was lower than in many affluent suburban counties elsewhere in the country, including Orange ($3.69), San Diego ($3.10) and Santa Clara ($3.70) in California, Palm Beach in Florida ($7.29), Montgomery in Maryland ($6.50), and Wake in North Carolina ($3.10).  Other affluent suburban counties with lower spending per $1,000 of county residents’ personal income include Baltimore ($1.09), Middlesex MA ($0.58), Montgomery PA ($1.14), and Fairfax VA ($1.86).

The Upstate Urban County average of $2.04 spent on local government Parks, Recreation, Culture and Natural Resources functions was similarly low compared with most of the counties containing other Rustbelt cities, including Wayne (Detroit) at $3.01, Hennepin (Minneapolis) at $3.96, St Louis City at $3.70, Cuyahoga County (Cleveland) at $4.13, Franklin (Columbus, OH) at $5.26, Hamilton (Cincinnati) at $4.26, and Milwaukee at $4.52.  Alleghany County (Pittsburgh) at $1.77, and suburban Oakland County in Michigan at $1.14, were lower, as was the part of Connecticut outside Fairfield County at $1.03.

As is the case with state Parks, Recreation, Culture and Natural Resources expenditures per $1,000 of personal income, the trend in local government expenditures in these categories is generally down.  New York City was down only 5.4% from FY 2007 to FY 2017, and is up compared with FY 1997, after big cuts during the Dinkins and Giuliani Administrations.

But there were FY 2007 to FY 2017 decreases of 14.7% on average nationwide, 23.7% for the Downstate Suburbs, 29.1% for the Upstate Urban Counties, 3.1% for Upstate Rural Counties, 39.2% for New Jersey, 19.2% for Connecticut, 17.9% for Los Angeles County, 43.8% for Harris County (Houston), 44.6% for Washington DC, 34.1% for San Francisco, and 44.6% for Philadelphia.

Suffolk County (Boston) expenditures increased, but to a still-low level.  But in Cook County (Chicago), funding was maintained for a fabulous park system despite an intensifying fiscal crisis.  The City of Chicago has a quasi-independent agency overseeing its parks, run by a board in a manner similar to the MTA.

https://www.chicagoparkdistrict.com

Adjacent older suburbs apparently have separate “Parks Districts” as well.

Home

Looking specifically at New York, one sees that Mayor Ed Koch reinvested in Parks, Recreation and Culture expenditures as soon as the 1970s fiscal crisis was over, while for the Dinkins Administration in the early 1990s fiscal crisis, and the Giuliani Administration in the late 1990s economic boom, these services were priority zero.  Spending increased during the Bloomberg Administration, before lagging well behind income growth during the DeBlasio Administration.  Mayor DeBlasio has been quick to cut services in this category as income falls, blaming the coronavirus.  Well find out in a year if the coronavirus was the real reason.

Local government Parks, Recreation and Culture spending fell per $1,000 of personal income in the rest of the state during the 1970s as well, but was stable thereafter, rising and falling depending on the economic cycle and the level of income, until the Great Recession.  It since has plunged to new lows since.

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State and local government Parks, Recreation, Culture and Natural Resources expenditures aren’t just paid for with taxes.  For some services, at least, there are charges for services, such as camping fees, and hunting and fishing licenses, golf course fees, skating rink fees, and fees for sports leagues.

New York State might spend more than average on state parks, but it charges more too.  In FY 2017, these “dedicated” funding sources equaled 42.4% of State of New York expenditures on Parks, Recreation, Culture and Natural Resources.  The U.S. Average was just 22.8%.  There were only three states where charges and hunting and fishing licenses covered a higher share of expenditures than New York:  New Hampshire (47.1%), Oregon (45.8%), and Idaho (44.1%).  I was amazed when traveling in northern California that there were all these state beaches one could just pull off at, park and visit, for nothing.  In California, charges and hunting and fishing licenses equal just 26.7% of state government expenditures in these categories.

Were New York State’s “dedicated” revenues in these categories diverted, like money allegedly “dedicated” to the transportation system? These are services people know they want and need, and are willing to pay for.  So the tendency has been to shift other money away from them, as a way to fund the special interests by the back door.

The share of New York State’s Parks, Recreation, Culture and Natural Resources expenditures covered by fees and charges has been going up, and the share covered by general revenue has been going down, over multiple administrations.  In FY 1997 charges and licenses covered just 27.0% of state spending in these categories, compared with 31.4% in FY 2007 and 42.4% in FY 2017.

At the local government level, charges for services equaled just 5.1% of New York City’s expenditures on Parks, Recreation, Culture and Natural Resources, compared with the U.S. average of 24.7%.  But the figure for New York City does not include charges from, and donations to, the non-profit organizations that run New York City’s museums, botanic and zoological gardens, and now some of its parks.  Those charges and donations are kept away from city’s general budget so they can’t be captured by more politically powerful interests.

New Yorkers donate to parks, over and above the high taxes they pay, with the expectation that the money will be used for their parks, or at least free up tax dollars to support the parks in less advantaged communities. There was a proposal some years ago for the city to tax donations to and revenues of park non-profits, to fund the general budget.  I haven’t donated since.

Charges equaled 24.3% of local government expenditures in the rest of New York State, close to the U.S. average of 24.7%.  This compares with 32.1% for New Jersey, 33.3% for Connecticut, 27.2% for Massachusetts, and 22.5% for Pennsylvania.  Often local governments provide free access to green space, but charge for some more expensive facilities such as pools. Charges are less contentious in suburbs where zoning, by limiting the range of housing, causes everyone to have about the same income, than in cities with diverse housing and households ranging from the rich to the poor.

Charges covered 30.4% of local government Parks, Recreation, Culture and Natural Resources expenditures in the Downstate Suburbs, 19.7% in the Upstate Urban Counties, and 10.7% in the Rest of New York State.   High among the Downstate Suburbs is Westchester at 43.3%, where Playland Amusement Park has been in and out of county operation over the years.  Plans to turn around and save the historic amusement park are announced every few years.

Westchester County Approves New Plan To Save Rye Playland

The cornoavirus doesn’t help.

Charges for services are a low share of NYC’s local government Parks, Recreation, Culture and Natural Resources expenditures even compared with other cities – but with the caveat that most of that revenue now accrues to non-profit organizations and does not show up in the Census of Governments.

There is no clear trend in the share of local government Parks, Recreation, Culture and Natural Resources expenditures are being covered by charges for services, but that might be misleading.  It may be that additional revenue-producing services are being spun off to non-profits or business concessionaires from government agencies, as in New York City, making some of that revenue disappear from data on local governments.  Perhaps the steep drop in spending on New Jersey’s parks actually represents some kind of privatization, rather than elimination.

 

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New Yorkers not only rely on shared outdoor spaces compared with other Americans and even city dwellers, but also rely on shared indoor spaces. Among these are its libraries. While some might believe the internet has made libraries superfluous, it is better said that their role is evolving.  Education and income are required to access digital information and entertainment on the internet, and many New Yorkers lack one or the other.

Despite this, New York City’s FY 2017 local government public Libraries expenditures, at $0.62 per $1,000 of city residents’ personal income, were below the U.S. average of $0.72, while the rest of New York State was above average at $1.12.  The statewide average was $0.88, ranking 16thamong states. As is the case for Parks, Recreation and Culture, a majority of New York City’s libraries are operated by non-profit organizations, and their workers do not show up as local government employees in Census Bureau data.  But the city’s funding of those organizations should show up as local government expenditures, making this a solid measure of the city’s commitment to this service.

The top states were Oregon ($1.23), Illinois ($1.20), Indiana ($1.16), Ohio ($1.13), Wisconsin ($1.07) and Washington ($1.07).  The concentration of high expenditures in the Pacific Northwest and the Midwest is clear.  Illinois, a state where this tabulation has shown state and local governments spend remarkably little on so many things per $1,000 of state residents’ personal income, given the state’s fiscal crisis, stands out for high spending on Parks, Recreation, Culture, Natural Resources and Libraries.

Using the same scale, one sees that Libraries are primarily a local government function, with relatively little spending at the state level other than in Hawaii.

The $0.62 in New York City Libraries expenditures per $1,000 of city residents’ personal income in FY 2017 compares with averages of $1.23 for the Downstate Suburbs, $1.04 for the Upstate Urban Counties, and $0.92 in the rural counties in the Rest of New York State.  Local governments in all of the individual counties in the Downstate Suburbs, and all the Upstate Urban Counties other than Rensselaer, spent more than NYC on Libraries as a share of county residents’ personal income.

Among counties containing large and major older cities, local government Libraries expenditures per $1,000 of county residents’ personal income were lower than the $0.62 for NYC in Miami-Dade ($0.46), Dallas County ($0.48), Harris County (Houston) ($0.37), and King County (Seattle) ($0.40).  In most such counties, however, Libraries expenditures were significantly higher than NYC per $1,000 of personal income, including Suffolk County (Boston) at $0.81 and Baltimore City at $0.74. Los Angeles County, at $0.80, was also higher than NYC.

The average of $1.23 in local government Libraries expenditures per $1,000 of personal income for New York’s Downstate suburbs was higher than any of the suburban counties I chose for comparison.  It was double most of them, and triple some of them.

The $1.14 per $1,000 of personal income local governments in the Upstate Urban Counties spent on Libraries was more than some urban Rustbelt counties, but lower than others.

As is the case for state and local government expenditures on Parks, Recreation, Culture and Natural Resources, the trend in local government Libraries spending, $1,000 of area residents’ personal income, is generally down.  The FY 2007 to FY 2017 decrease was 16.2% for the United States, 15.1% for New York City, 10.0% for the Downstate Suburbs, and 16.6% for the Upstate Urban Counties.  The Upstate Rural counties show a large increase.  It appears to have been funded by state taxes collected elsewhere.

Elsewhere, there were decreases of 2.2% for Los Angeles County, 11.2% for Cook County, 15.3% for Harris County (Houston), 10.2% for San Francisco, 35.4% for Philadelphia, and 18.3% for Suffolk County (Boston).   Libraries spending has been going up relative to income, which has also been going up, in Washington, DC.

 

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New York City’s parks, libraries, museums, botanic and zoological gardens were established during the City Beautiful and Progressive eras, 100 to 150 years ago.  Their development was supported by the city’s richest and most prominent citizens as a way to elevate the lives of ordinary people.

Net of their revenues, however, these facilities and institutions are an expense.  An expense that diverts money from public employees in seniority posts that commute in from the suburbs, and those retired to Florida, along with the personal staffs of elected officials, and grants they get to hand out as if it were their own money.

Which are often grants for Parks, Recreation, Culture, Natural Resources and libraries.  Somehow despite all the heroic efforts of our city council members and state legislators, and all their grants, we end up spending less on these services than the U.S. average.  I’ve been watching that particular hustle for 30 years.

Vices, on the other hand, have become an important source of tax and licensing revenues.   State and local governments at first started regulating and taxing potentially harmful goods and services as a way to limit the harm and keep the money out of the hands of criminal enterprises.   But “sin taxes” are also seen as a politically easy way to extract more money from those who don’t matter, for redistribution to those who do.   And it isn’t only those paying the taxes who are addicted.

In recent years the search for more “sin tax” revenue has become more and more desperate.  Gambling, once restricted, has spread to every corner of the country. The majority of the discussion about the legalization of marijuana has been about money, and who it would go to, not the possible health effects of that drug compared with other alternatives.  I have called this the “Just Enough Rope to Hang Themselves” economy.

https://larrylittlefield.wordpress.com/2018/09/24/the-just-enough-rope-to-hang-themselves-economy/

To the extent we can measure it, New York State is a leader in this type of revenue, with $4.17 collected per $1,000 of state residents’ personal income in FY 2017, ranking 12th.  The U.S. average was $3.25.  The leader in vice revenues was West Virginia, at $10.74 per $1,000 of state residents’ personal income, followed by Rhode Island at $9.69 and Delaware at $9.55.

But some of the revenues are missing, as demonstrated by the mere $1.85 collected per $1,000 of personal income in Nevada.   That is because casino tax and license revenues are not tabulated separately by the Census of Governments, which has not been updated since casinos became the great fiscal hope of the nation during the 2000s.  Nevada’s revenues from legal prostitution are not tabulated separately either, and don’t show up in the table.

https://www.inquirer.com/philly/business/tourism_casinos/nj-gaming-revenue-july-up-internet-sports-betting-new-casinos-20180814.html

Nor do New Jersey’s casino and internet betting revenues. These are estimated at $302 million in FY 2017, up from $268 million in 2017 thanks to online betting.  To put that figure in perspective, New Jersey had just over $1 billion in net lottery revenues in FY 2017.  New York State had nearly $3.7 billion.

With every state now competing for the same vice revenues, raising rates and charges on those already legal might end up reducing revenues, because those hooked on the vices could travel to another, more competitive state. In fact, so many casinos were built that some are now asking for government subsidies, rather than being the revenue source that they once promised to be.  So states are generally seeking to add legal vices, rather than increase they extent to which they tax those already legal.

Since bonds were issued to spend future tobacco settlement revenues back in the early 2000s, for example, that money is not available to spend today.

https://www.propublica.org/article/how-wall-street-tobacco-deals-left-states-with-billions-in-toxic-debt

So marijuana is being promoted as a revenue source to take its place. At least for a couple of years, as it is likely Generation Greed politicians will bond against those revenues, to spend them up front on themselves, as well.  Prostitution and human trafficking would then be next in line for legalization, along with cocaine.  Later-born generations will be left with someone else’s debts to pay, and increasing self-destructive behavior as the only way to pay them.

In fact, it may be that the only reason politicians are upset about the opioid crisis is that in many states pharmaceuticals are not subject to sales taxes, so they didn’t get a share of the profits to distribute among their crowds.

Even excluding revenues from casinos and other vice revenues not tabulated separately, in FY 2017 U.S. state vice revenues nearly matched state and local government expenditures on Parks, Recreation, Culture and Natural resources, net of charges and other related revenues for those services.  In most of the Northeast, including New York, revenues from the vices far exceeded net expenditures on those life-affirming services and facilities.  I’m sure the coronavirus will be used as a rationale to push things even further in that profitable direction.

 

 

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