Category Archives: bureau of economic analysis

Bureau of Economic Analysis Local Area Personal Income Data: Somebody Screwed Up the State and Local Government Earnings Data for NYC

A couple of years ago, I wrote a post based in part on Local Area Personal Income data from the Bureau of Economic Analysis, showing how the mean earnings per worker (adjusted for inflation) had changed for state and local government workers, financial sector workers, and other private sector workers from 1969 to 2016 – for Downstate New York, Upstate New York, New Jersey and the U.S. as a whole.  I later added data for Connecticut.

https://larrylittlefield.wordpress.com/2017/11/26/the-executive-financial-class-the-political-union-class-and-the-serfs-redux/

I recently downloaded the same data from the same source to see if there was anything different.

https://www.bea.gov/data/income-saving/personal-income-county-metro-and-other-areas

The data shows that the total earnings of state and local government workers in New York City increased 22.7% from 2017 to 2018.   While Manhattan was flat, the increase was 52.1% in the Bronx, 43.8% in Brooklyn, 39.3% in Queens and 47.8% in Staten Island.  Clearly that did not actually happen.

In the past I would have dismissed this as an error, to be pointed out to the BEA and fixed next year. But more and more data and other factual information has been altered in more and more ways over the past three years, or disappeared completely, specifically for state and local government finances in New York.  So I have begun to fear something worse.  I looked into it.  Here is what I found.

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The Upstate NY Rural Population Boom?

Last August I downloaded population and earnings data from the U.S. Bureau of Economic Analysis, from its Local Area Personal Income series, to use in my compilation of state and local government employment per 100,000 people.  The data was for 1997, 2007, and 2017.  As always I divided the state into four regions.  New York City, whose population I got by adding up the five boroughs. The Downstate Suburbs, which I got by adding up Nassau, Putman, Rockland, Suffolk and Westchester Counties.  The Upstate Urban Counties, the sum of Albany, Broome, Dutchess, Erie, Monroe, Niagara, Oneida, Onondaga, Orange, Rensselaer, Saratoga and Schenectady Counties.  And the rural and small Rest of New York State, which I got by subtracting the other three areas from the state total. The data showed a big population drop for this part of the state from 2007 to 2017 – and a thus huge increase in local government employment per 100,000 people.

Local Area Personal Income data has been updated to 2018 recently.

https://www.bea.gov/data/income-saving/personal-income-county-metro-and-other-areas

And I started downloading it for possible use in another analysis.  New York State’s 2017 population was exactly the same as the estimate released a year earlier.  But New York City’s 2017 population was slashed by 184,427 (2.1%), with smaller decreases for the Downstate Suburbs and Upstate Urban Counties.    Which means that since the Rest of New York State was obtained by subtraction, its population 2017 had soared by 247,319, a full 10.3% increase!  Despite the fact that the 2017 population estimate for virtually every individual county in the Rest of New York State has gone down!  It isn’t a surprise that the numbers are different.  Numbers are revised all the time based on new information.  But changes of this magnitude, despite NO change in the state total?

The best case scenario is a screw up.  Which is pretty much what I believe about next year’s 2020 Census of Population.

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Public Elementary and Secondary Schools: Census of Governments Employment and Payroll Data for 2017

The two categories of public expenditures that account for the most money are education and health care, but there is a difference in the way they are managed.  Federal, state and local government expenditures fund perhaps 80 percent of third party (not co-payment) health care expenditures, directly (Medicare, Medicaid, the VA Hospital system) or indirectly (private insurance purchased on behalf of civilian government employees, the tax expenditure subsidy due to the exclusion of health insurance payments from taxable income), if voluntary services such as cosmetic surgery and dentistry are excluded.  But most actual health care services, even services to public employees, are provided by private sector health providers, not by employees of government agencies, with the government merely paying the bill. So state and local government health care expenditures show up more completely in Census of Governments finance data, which will be published at some point in the future, than in Census of Governments employment and payroll data.

Most education services, in contrast, are provided directly by government employees.  As a result elementary and secondary school employees accounted for 55.6% of all local government employment in March 2017, on a full time equivalent basis, and higher education employees accounted for 50.8% of state government employment, for that year and on that basis.  There are also local government higher education employees in many states including New York, mostly in community colleges.   It is elementary and secondary school employment and payroll that is the subject of this post.

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Census of Governments Employment and Payroll Data for March 2017 (1997 and 2007)

The U.S Census Bureau conducts a Census of Governments every five years on the employment, payroll, revenues, expenditures, assets and debts of every state and local government in the country. (State-level estimates for state and local government are released in other years).   The data is reported by government function (police, schools, parks, etc.)  The Bureau recently released its employment and payroll data for March 2017, and I have spent a considerable number of hours tabulating it to get it into usable form.

I now have spreadsheets that show local government full-time equivalent employment (full time workers plus part time workers converted into full time workers based on hours worked), by function, for the United States, New York City, other areas of the state, every county in New York State and New Jersey, and other states and counties elsewhere in the country selected for comparison.  This is expressed per 100,000 residents of each area.  Selected private sector industries that are either substantially government-funded (health and social services and infrastructure construction) or a substitute for government services (private schools and automobile-related industries) are shown on the same basis.  And local government payroll per worker of each area, expressed as a percent higher or lower than the U.S average for that function, and compared with the extent that an area’s private sector earnings per worker are higher and lower than the U.S. average.  Similar data is provided for state government in for U.S. as a whole, compared with New York State, New Jersey, and other states I consider relevant.  This is a process I will repeat for the finance phase of the 2017 Census of Governments, when it is released.

As is my custom, this post will simply provide the data in tables and spreadsheets, explain where it comes from and how I tabulated it, and provide a brief overview of trends in total state and local government employment and payroll.  Function-by-function posts, with the data reorganized and charts included, will follow.  Read this post to fully understand what you are seeing.  Download the spreadsheets and look at the numbers to decide for yourself what they mean, before getting my take on them.  I’ll write more when I can.  But anyone else is free to use this information right now.

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Sold Out Futures by State in 2016: Debt and Infrastructure

Debt and infrastructure investment are supposed to go together.   State and local governments have operating budgets and capital budgets, and constitutions and charters that say that while money may be borrowed for capital improvements, the operating budget is supposed to be balanced.

During the Generation Greed era, however, that isn’t what has happened. For the U.S. as a whole, total state and local government debt increased from 14.1% of U.S. residents’ personal income in FY 1981 to 22.7% in FY 2010, even as infrastructure investment diminished. This was a matter of generational values, not just a matter of government.  One finds the same trend in business – more debt, less investment – during the same years, with the short term high of having more taken out relative to the amount put in contributing to perpetual political incumbency and sky-high executive pay.  A generation, it seems, has decided to cash in the United States of America and spend to proceeds before it passes away.

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Sold Out Futures: A State-By-State Comparison of State and Local Government Debts, Past Infrastructure Investment, and Unfunded Pension Liabilities

Four years ago I did an analysis of state and local government finance data from the U.S. Census Bureau, for all states and for New York City and the Rest of New York State separately, with data over 40 years, to determine the extent to which each state’s future had been sold out due to state and local government debts, inadequate past infrastructure investment, and underfunded and retroactively enriched public employee pensions.   Having a sold out future means having a future of higher state and local government taxes, diminished public services, and lower pay and benefits for newly hired public employees, and that is what many parts of the United States – most, in reality – are facing.

Over the past month I have re-created that analysis with data through FY 2016, the latest available, rather than just FY 2012, while adding some details.  This post and the next three will show what I found.

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Will Connecticut’s Ned Lamont Be the First To Tell The Truth about Generation Greed?

Coming into office eight years ago, Connecticut Governor Dannel Malloy faced a fiscal disaster, following decades of shortsighted but popular policies that robbed the future.  He raised some taxes and cut some services, but mostly kicked the can with borrowing and deferred pension contributions shifted further into the future, and pursued an agenda based on traditional Democratic tribal issues such as guns, gays, immigration and marijuana.   (Republican Generation Greed politicians use the same misdirection).  Since the majority of Connecticut residents don’t follow state and local government closely, however, Malloy received all the blame for all that had gone before.  As a result he was barely re-elected to a second term, and is leaving office as one of the most despised politicians in the country.

Coming into office today, Connecticut Governor-elect Ned Lamont also faces a fiscal disaster, this time at the peak of an economic cycle rather than in a deep recession.  A fiscal disaster that is certain to get even worse when the next recession hits and the stock market corrects to something like fair value. At some point he will either have to raise taxes, cut services, and perhaps tell his public employee union supporters that they have to give up more to get back in solidarity with their fellow state residents.  And be blamed for all of the above.  Or hope that state residents have gotten used to how bad things are under Malloy, kick the can a little further, and try to sneak into a second term before the additional bills come due.  And then leave office as despised as Malloy and former New Jersey Governor Christie.

But there is a third option.  Interested Ned?

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