Graphic Summary: 2017 Census of Governments Data

Over the past six weeks, I’ve posted a series of analyses of state and local government finances using data from the Governments Division of the U.S. Census Bureau, starting with the 2017 Census of Governments and including similar data for prior years.  The posts include well over 200 pages of text, 296-plus charts, 25 tables, 34 spreadsheets with that data, those tables and those charts, plus additional spreadsheets. It is the fifth time I have done this, based on the Census of Governments, which comes out every five years.

Did you read them all?

If not, I will now attempt to summarize what the data said about state and local government in New York City compared with the rest of the country, prior to the cornonavirus crisis, with a series of selected charts and a sentence or two each.  Most of the data is for all the governments in a state or county added together, with revenues and expenditures divided by the personal income of everyone in that state or county, to adjust for the relative cost of living and ability to pay. The first post in the series, which includes spreadsheets with revenue and expenditure data on the full scope of state and local government activities, and explains where the data comes from and how it is tabulated, is here.

The second post was on state and local government taxes.

The state and local tax burden in New York State in general, and New York City in particular, is uniquely high compared with other states and cities, even those thought to be “liberal” or high tax.

Although it has always been higher than the U.S. average, New York’s state and local government tax burden has increased further over the past decade.

In New York City, most of that increase has been in property taxes.

Meanwhile taxes have been cut, and services with them, in states that were already low-tax.  Whichever set of interests were already ahead has gotten ahead further.

Taxes, however, only account for part of the money state and local governments collect.  A post on other revenues followed.

The State of New York was above average in other types of revenues as well as taxes, including receiving a uniquely high level of aid revenues from its local governments.

New York was also above average in federal aid, though only because of the federal share of its very expensive Medicaid program.

At the local government level, New York City’s above average aid revenues from the state are offset by its above average aid payments to the state.

Federal aid to states has been rising over time, in New York State and elsewhere, due to rising aid for Medicaid.

Since the 2008 financial crisis state aid to local governments has been falling, particularly New York State aid to New York City, as the city had become richer relative to the rest of the state.

A summary of expenditures followed.

Less than one third of federal, state and local government spending goes to general public services to everyone.  The services and benefits provided by most government spending are limited to those eligible, based on age  (public education for the young, Social Security, Medicare and Medicaid for the old), means  (means tested aid to the needy, Medicaid for adults), and needs (health care and income support for the disabled).    Federal spending is almost entirely devoted to eligibility-limited services and benefits, and spending on everything else has plunged over the decades.

Those who advocate for small government are getting it, as the rising cost of public employee retirement and health care, particularly for seniors, leads to ongoing reductions in everything else.  That was before the big increase in the public debts due to the coronavirus.

That is certainly the case for New York City, which was unable to respond to its housing crisis during the 2010s because of money sucked into the past.

Including the health benefits that end up in the “Other and Unallocated” category, more and more money has been going to retired city employees, and less and less those currently on the job providing services.

A good example of that is local government education, the subject of the next post.

New York’s elementary and secondary school spending is very high compared with much of the country, in the rest of the state as it always has been, and in New York City as well.

In New York City it is even higher per student, even with a downward adjustment for the cost of living here.

In New York spending continued to rise even as enrollment fell, as the Millennials exited school.    But in low-tax states such as Florida spending on education plunged, even per student, in some places by 20 percent or more.

In New York City, spending per child doubled, adjusted for inflation, from FY 1997 when it was unfairly low, to FY 2017 when it was unfairly high. A lawsuit claiming that New York’s schools are terrible because New Yorkers have cheated those who work for the schools out of $billions started in the mid-1990s, but was still going in FY 2017.

By FY 2017 New York City had just eight children per instructional employee in New York City, a place with an average class size of 26.

Much of the increase in spending “on schools” in NYC went to soaring contributions to teacher pensions, in the wake of the 2000 and 2008 retroactive pension increases, and those of other years.

The next post was on state higher education expenditures.

New York State spends less than average on this function, because a higher than average share of its young adults attend private, rather than public, colleges and universities.

New York also covers a lower than average share of its expenditures for actual education (as opposed to dorms, sports stadiums, food services) with tuition and other charges.

Nationally, a higher share of actual education expenditures are being covered by tuition and charges than in the 1960s early 1970s, but most of the big increase had taken place by 1995.  There was another spike during the Great Recession, one that has been attributed to state aid cuts, rather than increased spending.

Another factor is that “auxiliary enterprises” are no longer covering their costs, after a building boom on new dorms, sports facilities and other amenities – followed by falling enrollment as the Millennials aged out.

The following post was on health care.

New York spends a lot on health care, mostly on payments to private health care providers.

Much of this spending takes place under New York’s extremely expensive Medicaid program.  New York, in particular, spends more than anyplace on Medicaid for seniors.

Based on Census Bureau spending on such vendors plus public hospitals, also funded by Medicaid, has soared over the years nationally, and in New York.

On the other hand, New York’s spending on public health was below average in FY 2017.

New York’s public health spending had fallen after the 2008 financial crisis, as did spending on most things other than public schools and Medicaid.

On the West Coast, were SARS had been more of a threat, public health spending increased after 2008, notably in California.

The next post was on other Aid to the Needy.

Prior to the coronavirus crisis very little of it was in the from of cash anymore, in the U.S. in general…

Or in New York State.

Cash welfare payments had started to plunge even before the welfare reform act of 1996, as aid levels were not increased for inflation.  The average wage and the minimum wage also fell behind inflation during these years.

With its large public housing inventory, New York City spends more than anyplace else one housing and community development.  Far more even than other major central cities.

In the late 1980s and early 1990s, after the city’s finances had finally recovered from the debts and pension increases of the Lindsay Administration, NYC was able to pay for a large city-financed subsidized housing program.  More recently, after another round of soaring debts and pension increase, however, it has struggled to keep its aging public housing inventory from falling apart.

The next post was on public safety – police, corrections and fire protection.

New York City’s police protection expenditures are high, according to Census Bureau data.

And that data includes barely more than half of total NYC spending on the police, much of which is on retirement and other benefits and ends up lumped in with other agencies.

Including the soaring costs of pensions, there has been little reduction in NYC police expenditures in recent years, despite a big decrease in crime.

Due to the richest pension imaginable…

And 2.2 times as many officers per 100,000 people as the U.S. average, and more even than most other large cities.

New York also had higher corrections expenditures than average, and a relatively large share of those expenditures at the local government level compared with the state government level.

And that’s not including all of the expenditures, with pension and benefit expenditures lumped in with other agencies.

Compared with the police, however, there has been a significant decrease in New York’s corrections expenditures as crime fell.  At the state government level.

And at the local government level.

In many parts of the country, and even New York State, fire protection is provided in part by volunteers.  New York City’s fire protection expenditures are not that high compared with other cities with professional fire departments.

But that only includes less than half of what NYC actually spends on the NYFD, due to the extremely high cost of firefighter pension benefits.

In fact, taxpayer pension contributions for firefighters now exceed the wages and salaries of firefighters still on the job.  Other retiree benefits, not shown, are on top of that.

The next post was on transportation infrastructure.

With its high level of population and economic activity per acre of paved road, New York City’s highway and street expenditures were well below the U.S. average, while the rest of the state was, on average, slightly above average.

New York’s spending was higher than most dense cities, however, because as a city of islands it has many major bridge and tunnel crossings to maintain.

On the other hand, metro New York in general, and New York City in particular, spend a great deal on mass transit.   Metro area residents save $35.2 billion a year by owning fewer private motor vehicles and driving them less, but the combined Mass Transit expenditures of the entire states of New York, New Jersey and Connecticut, not including interest, totaled $23.6 billion in FY 2017, according to the Census of Governments.

New York’s mass transit spending was high even compared with other major cities.

There were transit service meltdowns in many cities during the 2010, but only in New York City did spending increase significantly in association with decreases in service.

New York and New Jersey’s air transportation and sea and inland port expenditures were not high compared with other major urban counties with such facilities.

Taking all transportation capital construction expenditures together, New York City has been below the U.S. average in most past years while the rest of the state has been higher, and the evidence suggests that it has gotten poor value for that has been spent.

And much of the money to pay for this has been borrowed, meaning that charges, fees and dedicated taxes are now funding almost all spending on all types of transportation in New York, meaning all the general revenues used “for transportation” are actually going to debts and other costs from the past.

A post on other infrastructure followed transportation.

New York City’s water system has long been a good deal thanks to the investments of the past, with below average expenditures despite providing water and sewer service to everyone in the city and some places outside it.

In contrast with transportation, NYC’s capital construction expenditures on environmental infrastructure have been consistently above the U.S. average.

In recent years, much of the investment has been on sewerage, to reduce the pollution of New York’s waterways.  Some of it was on solid waste, associated with closing the Fresh Kills Landfill.

Much of the money to pay for this was borrowed, so New York’s water and sewer charges are not the bargain they once were, as a large share of then now goes to pay interest.

On the other hand, New York City doesn’t charge for solid waste collection.  On average municipal solid waste agencies covered nearly three-quarters of their costs with charges, and some other major urban counties charge for the service as well.

Perhaps because costs are less visible, New York City’s solid waste expenditures are relatively high compared with the U.S. average and other cities. In many cities all or part of solid waste collection is contracted out to private companies.

Not all of NYC’s solid waste expenditures were captured as such by the Census of Governments.

Unlike many places, particularly in rural America, New York City doesn’t have municipal electric, gas or telecommunications utilities.  But the New York State Power Authority is big enough to bring the state’s expenditures in the category to nearly the national average.

Another post covered state and local spending on parks, natural resources, and libraries.

Park, recreation and culture spending is low in the Northeast.

And it is low in New York City, compared with other major urban counties.

NYC parks spending hasn’t fared well during fiscal crises, as in the mid-1990s and mid-2000s.

New York State parks spending is lower than it once was.

Libraries spending is also low in most of the Northeast, but it is high in the portion of New York State outside New York City.

And it has been going down in most places.

The Northeast, on the other hand, has an above average level of vice and sin tax, license and enterprise revenues, with more such revenues proposed to be added.

The final post was on the Bureaucracy.

New York’s bureaucracy spending is below average, whether one includes state and local government health departments or excludes them.

And bureaucracy expenditures have been falling, in New York and elsewhere.

One of the biggest decreases, however, was on state social insurance administration, the agencies that process unemployment insurance.  As in the case of public health, the coronavirus crisis has exposed that the reduced spending was not caused by rising efficiency, but rather by falling preparedness.

I’ll end with some language from my “The Most Recent Public Finance Analyses, Charts and Tables” page, to which this series of posts and set of spreadsheets will soon be added.

Without place to place comparisons, one is always comparing this year’s spending and taxes with last year’s spending and taxes, for New York City and State in isolation.  That’s a comparison with an ideology – that the winners and losers in New York’s governmental priorities should be fixed in place forever.  Comparisons with other places, and with the national average, provide an alternative viewpoint.  Just because it’s the national average does not make it right, because different places have different needs and characteristics.  But large differences, in either direction, should be explained and justified rather than just continued by the divine right of those who come out ahead.  After all, in New York City state and local government expenditures equal approximately one third of the total personal income of city residents.  One out of three dollars we have passes through their hands.