The New York City and State Budget Crisis: The Circumstances Beyond Their Control Are Only Beyond Their Control Because They Cut Deals to Make them Beyond Their Control

It’s a never-ending cycle.  When the economy is up and tax dollars are rolling in, the political/union class and executive/financial class negotiate deals with themselves to take more out, and/or put less in, to the City of New York, the State of New York, and agencies such as the MTA, because there is “plenty of money” and no one needs to be made worse off to pay for it.  Secret deals that are barely reported by what is left of the real news media, the portion of it that is willing to question what is going on and who is benefitting.  Irrevocable deals, deals guaranteed by contract, or by the constitution, even if those who received little or nothing in exchange, were not party to the negotiations, were not really represented there, and didn’t even know about them, are forced to pay for them.

Then a recession happens, and a budget crisis follows.   And the serfs – those who didn’t benefit from the deals, later-born New York taxpayers and service recipients, later hired public employees, those without special deals and privileges – are made even worse off due to circumstances beyond our control, as blame is cast in a circle.   

But are those circumstances really beyond anyone’s control? Even if the New York State constitution seems to put them there, that constitution could be changed, with the vote of two consecutive legislatures and a voter referendum.  One New York State legislature ends December 31^st.  Another begins January 1^st.  Changes to the state constitution could be on the ballot in November, 2021, as New York City residents went to the polls to vote for Mayor and City Council – if the powers that be wanted that happen.

The 2020 Federal Election: Another Exercise in Bi-Partisan Gaslighting by Generation Greed and the Media

The U.S suicide rate had increased 13 years in a row – even before the coronavirus, shutdowns and economic collapse hit.

https://www.economist.com/graphic-detail/2020/01/30/americas-suicide-rate-has-increased-for-13-years-in-a-row

As I noted here…

https://larrylittlefield.wordpress.com/2015/11/08/death-is-the-ultimate-statistic-ii-the-most-important-news-in-ten-years/

Although this increase in suicide is terrible enough as it is, what is worse is that while most people don’t kill themselves, a higher suicide rate is an indicator of other things.  How most people feel about life. Their health and psychological well-being.  Their economic circumstances.   Their sense of inclusion in family and community. And those who have been committing suicide in larger numbers – since the early 1980s in fact — are the generations that followed Generation Greed, the richest and most self-serving in U.S. history, those who made the choices that led to the collapse of family and community, an increasingly worse economy generation by generation, and public policies that benefitted themselves in the present (now the past) by cashing in the future (now the present).

But you won’t hear about this massive economic, social and spiritual catastrophe during this federal election.  Not one word about the real lives and future of more than 200 million people, a number that keeps growing.  It is under Omerta, part of a seemingly shared conspiracy by both political parties and the media.  Instead what you get is tribalism on both sides, meant to distract the victims and give them someone else to blame – each other.  Increasingly marginalized people yelling “Black Lives Matter” and “White Lives Matter” at each other, when the reality is that to those who have been taking more and more and putting in less and less for 40 years, none of them matter.  No wonder we also have a political catastrophe.

To read anything about the actual lives of ordinary people, especially all those born after 1957 or so, you have look all the way across the Atlantic Ocean.  After the jump I will repeat a post by the U.K.’s Intergenerational Foundation, with its permission, in full.

https://www.if.org.uk/2020/10/01/pandemic-testing-intergenerational-solidarity/

And add some commentary.   Because as bad as it is there, it is worse here.  Here is the reality of a nation in decline that our leaders, pundits and journalists won’t tell us about, because it doesn’t fit the approved narratives.

Census Bureau Education Finances Data: The FY 2018 Data for New York City is Wrong

In the past few years I’ve come across multiple instances when federal data on City of New York expenditures, and only City of New York expenditures, has been incorrect.   Always in a way that make it seem as if those expenditures are lower, public employment per 100,000 people lower, and NYC public workers less well paid than they actually are.  The data affected has been the public employee pension data aggregated by the Census Bureau, population data at the Bureau of Economic Analysis, and state and local government earnings data aggregated by the BEA.  At the local level some key information has been eliminated altogether, notably the “full agency cost” table.   I’ve been following the data for decades, and haven’t seen much like it.

Given that I’ve just completed a comprehensive analysis of state and local government finances based largely on the 2017 Census of Governments, I hadn’t planned to re-doing an analysis of education finances for FY 2018. But I decided to check to see if something funky happened to those numbers as well.  It has.  According to data reported to the Census Bureau, the wages and salaries of NYC elementary and secondary school workers were $373 million lower in FY 2018 than they had been in FY 2017, with a reduction of $205.6 million for instructional workers.  I checked around to see if there was something that could explain this. Here is what I found.

Don’t Increase the Federal Payroll Tax –Replace It With A Value Added Tax

If there is one tax that both Republicans and Democrats love to increase, it is the federal payroll tax, now at 15.3% of your paycheck, theoretically split between employers and employees with the “self-employed” paying both halves.  The biggest tax change in my lifetime took place in the early 1980s, at the start of my career.  With the biggest cut in the progressive income tax in history, followed by the biggest increase in the regressive payroll tax in history, during the Reagan Administration.  The income tax cut has been repeated twice since, to benefit the richest members of the richest generations in history at the expense of loading debt on the less well off generations to follow.  That has been a Republican policy.  But increasing the payroll tax – the base, the rate, or both — is a Democratic go-to as well, to increase or at least maintain Social Security benefits under various Democratic proposals, as noted here…

https://larrylittlefield.wordpress.com/2019/02/17/social-security-the-democrats-join-generation-greeds-theft-of-the-future-from-less-well-off-later-born-generations/

Or to pay for things like family leave, as in the state program in New York or the federal program proposed by New York Senator Gillibrand.

Why increase the payroll tax?  Because the types of people who have gotten richer and richer over the past 40 years, at the expense of those who have gotten poorer and poorer (to the point where their life expectancy is falling), don’t have to pay it, or as much of it.  Only regular workers do.  We are now in the special interest pandering, campaign contribution collecting portion of the 2020 Presidential campaign.  No wonder everyone wants higher payroll taxes – or, as alternative, even more in cuts in federal old age benefits for already-disadvantaged later-born generations only.

Social Security: The Democrats Join Generation Greed’s Theft of the Future From Less Well Off Later-Born Generations

Approximately eight years ago, I was outraged by a Republican proposal to address the oncoming insolvency of Social Security by cutting benefits, as Ben Smith, then at Politico but now at Buzzfeed, noted at the time.

https://www.politico.com/blogs/ben-smith/2011/04/generation-greed-034703

It wasn’t that benefit cuts were proposed per se that outraged me. I am well aware that as a result of decades of self-serving actions by Generation Greed, the majority of whom voted Republican at the federal level to get one tax cut after another but also demanded even more benefits for themselves, people my age and younger would, on average, end up much worse off in old age, as the federal, state and local governments go broke. Worse off compared with what the “tax cut” “government shutdown” generations promised themselves but refused to pay for.  After all, our benefits have already been cut as part of the deal to “Save Social Security!” in 1983.  As a result those born in 1937 had a “full retirement age” of 65, compared with 67 for those my age and older, with retirement ages in between for those born in years in between.  Which really means that no matter when you start collecting between age 62 and 70, you will get less in monthly benefits than those in earlier generations who retired at the same time.

No, what outraged me is that the generations whose short-sighted, self-serving, entitled and hypocritical choices put us in this situation were proposed to be exempted from any and all of the sacrifices that their own choices have caused. As I said at the time:

I already know Paul Ryan and the Republicans are a fraud because no sacrifices will be imposed, and no changes will be required, for those age 55 and older. Which means those born in 1956 or earlier. Which means those who were 17 in 1973, the year wages peaked for most American workers. The richest generations in American history, the first to leave those coming after worse off in the private sector, the ones that created all those deficits and debts and unfunded pension obligations in the public sector, the ones who wanted more senior spending and less in taxes, Generation Greed, gives back nothing. And there is a barely an acknowledgement of what this means in a moral sense.

Eight years later, it is the Democrats who are making proposals with regard to the upcoming insolvency of Social Security.  So things must be different, right?

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

Coming into office eight years ago, New Jersey Governor Chris Christie faced a fiscal disaster, following decades of shortsighted but popular policies that robbed the future. He talked like a problem solver, and could have made difficult choices to raise taxes and tolls, and reduce public services for everyone, not just for transit riders.   But since the majority of New Jersey residents don’t follow state and local government closely, this would have meant Christie received all the blame for all that had gone before. So he punted, and shifted costs from the past further into the future, to the extent that this was possible. As a result he won a second term. But the future continues to become the present, and the bills continue to come due. He is leaving office as one of the most despised politicians in the country.

Coming into office today, therefore, New Jersey Governor-elect Phil Murphy 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. And he faces those same two options. 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 Christie, 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 Christie and outgoing Connecticut Governor Malloy.

But there is a third option.   Interested Phil?

Term Limits: Impact On The Operation of New York’s Governing Bodies

During my Don Quixote protest campaign against the state legislature back in 2004, the only member of the media who paid attention to what I was trying to say was Erik Engquist, then of the Courier Life papers, now with Crain’s New York Business.   But he didn’t quite get it right. In one column, he said I was someone who cared deeply about the process of government. I e-mailed him and said that to be honest, like most people I never really cared about or paid attention to the process, I only cared about the results. He wrote back and said while that may be so, unless New York gets a better process, it isn’t going to get any better results.

This is the third and last post in a series on New York City’s double-blind experiment with democracy – a City Council that has term limits, and a state legislature that does not. In the first, I noted that thanks to term limits and public campaign financing there are actual elections for the City Council every eight years, with the would-be members forced to pay attention to the general public, whereas in the state legislature competitive contest elections almost never happen.

https://larrylittlefield.wordpress.com/2017/09/10/term-limits-new-york-citys-double-blind-test-of-democracy/

In the second I examined the personal and professional background of the City Council and state legislature members, and found less difference than I would have supposed, due in part to a surprisingly large amount of recent turnover in the State Assembly, and due in part to the fact that ordinary citizens cannot, or do not, run for office.

https://larrylittlefield.wordpress.com/2017/09/24/term-limits-impact-on-the-characteristics-of-nyc-representatives/

This is post is not about who the members are or how they get there, but what they do when they arrive. With regard to corruption, transparency, and the value they place on the common future, the one interest all of us (other than the most selfish seniors) share.

Term Limits: Impact on the Characteristics of NYC Representatives

As noted in the prior post in this series, New York City is a double-blind test of the effect on term limits on democracy. Since 1993 the city has represented by term-limited members of the New York City Council, and by unlimited members of the New York State Legislature. The dominant political party, other election laws, and the voting population are the same in each case. One result, as identified in the prior post in this series, which should be read first, is more contested elections for City Council relative to the New York State legislature, which seldom has any.

https://larrylittlefield.wordpress.com/2017/09/10/term-limits-new-york-citys-double-blind-test-of-democracy/

In this post I compare selected characteristics of the NYC officeholders in these governing bodies with each other and, in some cases, the population of the city at large. Their race and Hispanic origin. Their sex (male vs. female). Their place of birth. Their age/date of birth/generation. The year when they were first elected to their current position. And their prior job. I don’t usually pay too much attention to New York City’s elected legislative representatives, other than show up every year to vote against the incumbents in my district, so all this information was new to me. Some of it is what I would have expected, but some of it is not.

Term Limits: New York City’s Double-Blind Test of Democracy

In 1989 a new New York City Charter, developed by the equivalent of a state constitutional convention in response to a court decision invalidating the old Board of Estimate, gave city voters the power of initiative and referendum. The power to directly enact local laws that their representatives were unwilling to enact for them. That power has been used only once in the 28 years it has been in force – in 1993, to enact term limits for city officeholders. Since term limits are one thing the people are almost all in favor of, and politicians are almost all opposed to.

http://www.nytimes.com/1993/10/20/nyregion/bid-to-limit-terms-can-be-on-ballot-in-new-york-city.html?pagewanted=all&mcubz=0

That initiative and referendum has created a double-blind test of democracy in New York City, an experiment that no one knew they were participating in when term limits were enacted. Because today, New York City residents are represented (or not) by two sets of non-federal legislative representatives.   The 51 members of the New York City Council, who have turned over twice or more due to term limits. And its 91 member of the New York State legislature, with 26 State Senators and 65 members of the State Assembly. As we look toward a constitutionally-mandated November referendum on a possible New York State Constitutional Convention, something the entire New York State political class and its funders is opposed to and which basically seems to be hushed up, it is time to examine the results of this experiment. Because based on history, unless the powers that be manage to control the constitutional convention, term limits for state politicians is one provision that it might very well place before the voters for approval, and that those voters would almost certainly approve.