Comparative Public Education Finances in FY 2000 and FY 2020: A Brief Review

As everyone who has gotten their information from New York’s local media over the past 20 years is aware, the New York City schools and its unionized teachers owe the children of New York City nothing, because the schools are underfunded and understaffed, and teachers unsupported by the rest of us, leading to large class sizes and teachers leaving for better jobs.  There is a constant stream of press releases to this effect, and no elected official seeking to maintain perpetual incumbency dares to contradict it.   And those seeking to advocate for more school funding or better conditions for teachers elsewhere would prefer that the New York City public schools not be discussed at all.

So, it has been left to this unpaid avocational blogger to tabulate and publish the readily available data released by the Census Bureau each year on how much New York City schools actually spend, compared with other places and with the past.  Since others are paid to not make this information available.

The past two years, years of pandemic, have been unusual and unrepresentative, and perhaps not relevant to any discussion of choices that have been made.  Therefore, I’m not going to go into the kind of detailed multi-post comparisons I did last year based on FY 2019 data, and two years before that based on FY 2017 data.  But perhaps a simple FY 2020 to FY 2000 comparison will be easier to digest.  A discussion of seven nine charts (sorry, can’t help myself), a correlation analysis, and spreadsheets with data for every school district in New York and New Jersey for FY 2020 and for FY 2000 (adjusted for inflation into $2020) follow.

DeBlasio and Cuomo Administration Fiscal Policies: A Review

Have you seen all those ads from candidates for Governor?  I can’t seem to avoid them.  You turn the channel and you run into another one.  I’m here to tell you that if you are just a regular person living their life, what is said on the commercials doesn’t matter.  What matters is:

1. Who paid for them?
2. What, during the real campaign that takes place in secret, were they promised in exchange?
3. How and when will you be made even worse off to pay for this?

I’m not in a position to answer those questions about the future.  The deals are secret, and stay under Omerta for eternity.  What we can do is see who the DeBlasio and Cuomo Administrations, with help from the state legislature and NYC council (always eager to cash in the future of the serfs) did in the past. At least to the extent that Comptrollers Stringer and DiNapoli didn’t completely fudge the data they reported to the Census Bureau, also in exchange for consideration, this post will attempt to find out.

The DeBlasio and Cuomo Administrations: A Review

A public chief executive has three jobs: policy, management, and leadership. With leadership being using one’s influence as a public figure, in competition with celebrities and marketing influencers, to change what people voluntarily do on their own, rather than what the government forces them to do or does for them.  For state and local government, the key policy is the budget — who is made to pay how much, and what it is spent on, compared with the past and compared with other places.  Management determines how much in services and benefits people actually get for that spending.

Mayor Bill DeBlasio and Governor Andrew Cuomo spent much of their tenures feuding.  They would have you believe it was over policy and ideological differences.  I believe their primary ideology is careerism, the advancement of their own careers to higher office, and this made them rivals — and the rest of us and our futures pawns.  Perhaps that’s why both “President” DeBlasio and “President” Cuomo left office widely despised.  

But what did they actually do?  Even as we just had an election for Mayor, and are currently having an election for Governor, the media doesn’t seem to be talking about it, other than issues of the moment such as bail reform.

Most people can’t do it, but one ought to separate what the pols do from the broader situation. DeBlasio and Cuomo didn’t cause the opioid epidemic, the surge in homelessness, or the COVID-19 pandemic, or in Cuomo’s case, the long-term economic decline of Upstate New York.  But they didn’t cause the economic boom and soaring federal debt that allowed them to pander to every special interest group without completely screwing anyone else except transit riders and the later-born (until the future) either.  With regard to the budget, I’ve created some charts that make a fair and perhaps telling comparison.  This post will briefly describe what I plan to do, with additional posts making the comparisons to follow.

Sold Out Futures by State: The Sold Out Future Ranking For 2019

Over the past three posts I’ve documented how today’s and tomorrow’s Americans have had their future sold out and cashed in with regard to state and local government debts, inadequate past infrastructure capital construction, and retroactively increased and underfunded public employee pensions.  Over and above the generational inequities at the federal level in government, in the private sector, and even in many families.  Plus climate change, which some have claimed will be so bad I should stop worrying about other aspects of generational inequity.

These aren’t technical issues to be discussed one at a time, as if they were independent of each other.  They are a single ethical issue to be discussed and understood as a whole.  Look at any issue, any institutional decision in government, business and the professions, any social trend of the past 40 years, and examine how it has affected those in different generations – who benefitted, and at whose expense.  And you will find the same thing.  

That is why our society is in decline, something all those crazed about the tribalist cultural issues that consume out geriocratic politics apparently understand, and are desperate to find someone else to blame for.  The Sold Out Futures by state ranking, based on the state and local government part of it, is my contribution to the bigger story, one that remains under Omerta.  

Adding it up, on average today’s and tomorrow’s Americans have inherited a Sold Out Future due to past state and local government deals and non-decisions equal to 47.0% of their personal income in FY 2019.  That is virtually unchanged from the 47.1% I found when I did the same analysis for FY 2012, despite a much stronger economy and another asset price bubble.   

Unlike the other generational inequities in our society in the wake of Generation Greed (and more like the differences between families), the state and local government burden is not the same everywhere in the U.S.   It is greater or smaller depending on where you live.  It attaches to the people there now, unless they move away from it, and may eventually attach to each place’s real estate, since real estate cannot pick up and move.  This final post in the series will rank states, and New York City and the Rest of New York State separately, based on how sold out their futures are.

Sold Out Futures By State: Public Employee Pensions from FY 1972 to FY 2019

Even another stock market bubble, in fact an everything bubble that has temporarily inflated the price of every asset to historically high levels relative to income, has not been enough to get the average U.S. public employee pension fund out of the hole.  But it has been enough to knock the public employee pension crisis out of the news, and give politicians an excuse to shift even more of the cost to the future.  As I showed here…

https://larrylittlefield.wordpress.com/2013/11/29/pensions-the-nature-of-the-lie/

When asset prices bubble up, future investment returns are going to be lower.  If the bubble is big enough, future returns could be negative for decades, as they have been in aging countries like Japan, and countries that try to inflate away their debts like Argentina, two (hopefully but not necessarily extreme) versions of our own future.  Predicted future return returns should be reduced as asset prices rise, as ERISA requires private pension funds to do by tying future returns to current interest rates.  But in the public sector, which was exempted from ERISA, when asset prices bubble up public unions cut deals with the politicians they control to increase benefits in Blue States, and while anti-tax politicians slash pension contributions to cut taxes in Red States.  (Actually, they do both things in both types of state).  Then, when asset prices correct to normal, somehow it’s nobody’s fault.  Wall Street stole the money!, PBS Frontline claimed in an investigation of the problem.  That’s why nobody is talking about pensions now – that lie temporarily unavailable.  

Thus far the federal government, at great cost to ordinary people in disadvantaged later-born generations, has managed to keep paper asset prices – and housing prices – inflated, to benefit the rich and seniors.  Even so in FY 2019, despite sky-high asset prices and the passage of more than a decade since the problem was acknowledged (by some), my back-of-the-envelope estimate is that U.S. state and local government pension funds were $3.65 trillion in the hole, more than ever before.  A more sophisticated analysis by the Bureau of Economic Analysis, using the assumptions private pension funds are required to use, put the hole at $4.54 trillion in 2018.  But in which states is the problem the greatest?  Read on and find out.

Sold Out Futures by State: Debt and Infrastructure for FY 1972 to FY 2019

The federal government just passed a $ 1 trillion “infrastructure bill” that, for a while, will increase the amount of federal funding for infrastructure.  Most of the actual spending, however, will be continue to be done by state and local governments, just as has been the case in the past.  The modest increase in spending, adjusted for inflation, is intended to address a backlog of needed projects.  But federal funding is only one source of money for state and local infrastructure.  State and local taxes are another, and bonds, usually paid off over 30 years, are a third. 

The extent of infrastructure varies from place to place.  In rural areas the only public infrastructure might be a county or town road, supplemented by power supplied by a rural electrification co-op, and telephone and postal service cross-subsidized by those in cities.  Instead of paying for public water, sewer, and solid waste collection, people provide these for themselves.  In cities, on the other hand, there may be mass transit, public sidewalks, airports, seaports, public water, sewer, solid waste collection, and in some places public electric utilities.  So do low-density rural states spend less on, and receive less in federal funds for, infrastructure?  Do states with low past infrastructure spending also have low debts?  How are the estimated $1.4 trillion infrastructure spending shortage and the $3.2 trillion in state and local government debt distributed around the country?  Read on and find out.

Sold Out Futures: A State-By-State Comparison of State and Local Government Debts, Past Infrastructure Investment, and Unfunded Pension Liabilities Through FY 2019

In two years of the COVID-19 pandemic, with society under stress, we have seen increasingly strident political fights over whose cultural attitudes and preferences should be imposed on others, who should get to contribute less to the community, and who should get to take out more.  In the shadows, however, is a bipartisan consensus as to who should be made worse off and be sacrificed the rest of their lives to pay for it all.  Ordinary people in later born generations, those who will be living in the United States in the future.   The pandemic has given politicians of all alleged views, and the interest groups that back them, an excuse to do, to an even greater extent, what they have done for 40 years.  Cash in the common future to address the perpetual “emergency” of the present.

So it was in Washington in 2020 when The Donald and the Republicans, having already sent the federal debt soaring to cut taxes for the rich and then ran a federal deficit equal to one-quarter of the U.S. economy.

https://larrylittlefield.wordpress.com/2021/03/15/federal-reserve-z1-data-for-2020-the-king-of-debt-went-out-with-a-bang-and-our-children-and-grandchildren-will-be-poorer-for-the-rest-of-their-lives-to-pay-for-it/

And so it is in Washington today, where Biden in the Democrats claim their plans will be “paid for” – meaning the burden shifted to the future would only be as great as it was under Trump and the Republicans.

It is in this context that for the fifth time, I have reprised 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 49 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.   You’d think that the extent of disadvantage for the later-born, and who benefitted from creating it, would be the number one issue in every state election, and the number one topic of debate in the media.  Instead, it remains under Omerta, especially here in New York.  Shouted down under the comforting culture war issues that Generation Greed prefers.  So, although standing up for the later born and common future may amount to nothing more than standing on the beach shouting into a hurricane as a social tsunami heads for shore, over the past month I have updated the “Sold Out Future” analysis with data through FY 2019.  This post, a national summary and explanation of where the data comes from and how it was used, and the next three, will show what I found.

New Jersey Governor Phil Murphy Should Have Told the Truth About Generation Greed

Four years ago, I asked if newly-elected New Jersey Governor Phil Murphy would be the first to tell the truth about Generation Greed.

Will New Jersey’s Phil Murphy Be the First To Tell The Truth about Generation Greed?

Telling his new constituents exactly what share of their state income taxes, local property taxes, transit fares and toll payments were going not to public services and benefits they were getting today, but rather to costs shifted forward to the present by past New Jersey politicians, and the older and former state residents and special interests they had pandered to.  Costs from past debts, inadequate past infrastructure investment, and underfunded and retroactively enriched public employee pensions.  The tell would be to reduce taxes, tolls, and transit fares to a level that only reflects the public services and benefits that the State of New Jersey and its local government are providing to New Jerseyans today.  So people would see what the public services they are now getting actually cost.  And then fund all the costs from the past with a separate, additional income tax, property tax, transit fare and toll surcharge that everyone could see. The Generation Greed surcharge.  It would be right in their face, not in some report no one reads, day after day and year after year.

Governor Murphy (like the rest of them) chose not to go that route.  And despite an economic upturn, stock market bubble, and gusher of federal money that the later-born will be sacrificed to pay back someday, that temporarily made his options and decisions much less painful than they could have been, and will ultimately be, he was nearly thrown out of office, barely winning re-election against Republican challenger Jack Cittarelli.  Meanwhile, Democratic New Jersey Senate President Steve Sweeney has apparently been ousted by a truck driver and politician novice running a low-cost campaign.

The top issue, according to pollsters, was taxes.  Even though New Jersey’s total state and local government tax burden, as a percent of state residents’ personal income, doesn’t come close to what we’ve been forced to pay in New York.  Even at their lower tax total, today’s New Jerseyans apparently don’t feel they are getting fair value for their money.  Well of course they aren’t. 

New York City Local Government Employment and Payroll: Could That Have Actually Happened?

Over the past few years, and especially during the pandemic, we have heard the same thing over and over again.  New York City public agencies and public contractors can’t possibly provide New Yorkers with decent public services because they are understaffed, underpaid, underappreciated.  And city residents are undertaxed.  You heard it from the cops as crime jumped during the pandemic, and from the teachers who needed more staff for hybrid learning – and now need even more without hybrid learning.  You hear it from the Department of Corrections, the judges, the public defenders and DAs.   You hear it over and over, and rarely does anyone threaten their own career by objecting.  Cheated out of $billions!

So I was shocked to learn that according to Employment and Wages data from the Bureau of Labor Statistics, from 2016 to 2020 New York City local government employment increased by 36,627 (8.1%) while local government employment in the rest of New York State decreased by 35,991 (6.2%).  That New York City local government payroll increased by fully 44.1% in four years!!!  Compared with an increase of 7.8% for the rest of the state.  I checked this against data reported to the Governments Division of the U.S. Census Bureau.  This source reports a mere 7.5% increase in “full time equivalent” employment (full time plus part timers converted to a smaller number of full timers based on hours worked), compared with a 1.1% increase for the U.S.  March local government payroll, according to this source, increased 22.0% for NYC, and 10.8% for the rest of the state.  Despite these differences NYC local government payroll, as measured by the two sources, ended up in about the same place — $40.4 billion for annual payroll based on employment and wages, and $38.8 billion for the monthly Census Bureau data multiplied by 12.  Which makes sense due to raises that might have occurred during the year, and seasonal employment in the summer.

All this makes me wonder – just what have two politicians seeking higher office with public employee union support:  Mayor Comptroller Scott Stringer, and President Governor Mayor Bill DeBlasio, been doing?

The Economist Notices the NYC Department of Corrections

Word of the meltdown of New York City’s jail system has crossed the Atlantic, and apparently somebody has given The Economist magazine the kind of information that, in general, no one is allowed to talk about here in “progressive” New York.

https://www.economist.com/united-states/2021/10/02/the-jail-on-rikers-island-is-both-appalling-and-generously-funded

The title?  

Aggravated robbery

The jail on Rikers Island is both appalling and generously funded

It costs $438,000 to jail one person for one year there

Gee, I thought everyone was obliged to say the people of New York deserve nothing because they don’t pay enough money in taxes, and cheat public employees and contractors out of $billions?  And because New York doesn’t tax the rich.  Didn’t the city just agree to increase the Department of Correction budget and staffing levels in response to a crisis that department and its union created?

The misery at Rikers is not for lack of resources. The jail’s population fell by half between 2012 and 2020, yet its budget grew by 24%. It costs $438,000 to jail one person there for one year. Of this $379,216 goes to personnel costs; less than 5% goes to services like substance-abuse treatment. The average salary for guards, after five and half years on the job, is $92,073. In 2012, the ratio of inmates to officers in the city was 7:5. In 2020 it was 1.6 officers per inmate.

And yet, the island’s chief medical officer said he is seeing “a collapse in basic jail operations.”  On September 29th a federal judge issued an emergency order to safeguard inmates’ wellbeing.

To hear local politicians talk about it, the problem is the buildings located on Rikers Island are attacking people, and it’s the buildings that must be replaced.  At a cost of $8 billion, more 10 times as much per square foot at the cost of luxury condominiums, to benefit the construction unions and contractors.  The problem couldn’t be the inmates, or the guards and its union, or other parts of the public sector, could it? 

So why was someone willing to make a comparison between New York’s local corrections spending today and the past, and with other places?  Did the corrections officers’ union not give enough money to the right politicians?  Because here is what The Economist didn’t say:  the same excess of funding and staffing compared with other places, even adjusted for the cost of living here, may be found in just about every state and local government service in New York City.  Even those that are merely, intentionally, inadequate, or getting worse, not “appalling,” so the inadequacy could serve as the basis for a demand for more money.   Nowhere else in the U.S. is close:  not New Jersey, not Connecticut, not California, not Illinois, nowhere.  And unlike the Department of Corrections, at least for the moment, no politician or media source will talk about it.