Category Archives: new york city transit

Private Employment By State and Metro Area:  NYC Is Still in the Cellar, and It May Be About to Rain

The Bureau of Labor Statistics released re-benchmarked Current Employment Survey data last week, and the data shows that New York City is still trailing the rest of the country in recovering jobs lost during the COVID-19 shutdowns.  Only Hawaii is hurting as much, not surprising given that state’s dependence on the tourism industry.  The annual rebenchmarking process corrects the past employment data that was reported each month, based on the actual unemployment tax records of businesses.  Large-scale revisions are released each March.  Last year I found that New York City had lost more private jobs during 2020, the year of the COVID-19 shutdowns, than any other metro of significant size and (for those states without them) any state other than Hawaii.

And this year I find that NYC lags in recovering those lost jobs, with only Hawaii faring worse.  But NYC still has more private sector jobs than it had in any year prior to 2015, and there is a new positive trend in the Downstate Suburbs.

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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.

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The MTA:  Why Always the Most Expensive, Interminable Way?

A couple of, well, decades ago, the MTA started planning MetroNorth service for the time when East Side Access opened and many Long Island Railroad trains would be going to Grand Central Station.  This could provide an opening for MetroNorth trains, at least those on the Hudson and New Haven Lines, to go to Penn Station.  The tracks are already there, so this should be relatively simple and cheap right?  

Wrong.  After 22 years of planning, and the expenditure of however many $millions or $tens of millions on staff and consultants, the MTA might finally spend $1.6 billion to add a few stations to the New Haven line as part of the Metro North to Penn project.  Perhaps there will be service in another decade or two.

If there wasn’t such operational inefficiency involved, however, MetroNorth service to Penn Station could start next spring for no money at all.  How?

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The MTA (and New York State and the New Federal Infrastructure Plan): Five-Plus Decades of Investing in the Suburbs and Disinvesting in the City

The era of large-scale federal infrastructure investment, from the 1950s through the 1970s, coincided with the era of suburban development and urban decline.  I don’t think that was a coincidence.  Cities had paid for their own infrastructure with local money, were still paying bonds for that infrastructure, and it was aging. The federal government then paid for brand new, up to date infrastructure for suburbs, and for rural areas that became suburbs, with taxes collected in part in cities, even as urban infrastructure declined.  Federal investment was limited to new infrastructure only at the time.  Most older central cities never recovered, and those that did only began to do so in the early 1980s, after the Reagan Administration cut federal investment and added local flexibility to how it was used.  More of it was then used to fix existing infrastructure, not just subsidize new suburban and exurban development.

Now it is 50 to 70 years later and the infrastructure of the suburbs is aging.  And because of lower densities, and thus more liner feet of road, water pipe, and sewer pipe per taxpayer, it will be more costly to replace with local taxes.  Some in the Strong Towns movement believe the suburbs are facing the sort of infrastructure decline the cities faced 50 years ago as a result. 

https://granolashotgun.wordpress.com/2016/01/12/teachers-pipes-and-pavement/

An issue that will be most acute in private communities responsible for their own local infrastructure, where people live so they can control who walks on their streets and not share a tax base with pre-1960 neighborhoods. Who will pay up when private sewage treatment plants fail and have to be replaced?  Did you hear about what happened at that collapsed Florida condo, where residents had argued for years about paying for fixes before disaster struck?

The older generations who live in these suburbs are used to getting things, but not fully paying for them.  The “I’ve got mine jack,” tax cut generations.  And here we have another federal infrastructure bill, enacted by suburban and Sunbelt Baby Boomers according to their preferred lifestyle, a lifestyle that poorer Millennials cannot afford and the global environment cannot sustain, to be paid for by those Millennials in the future, because most of it going to funded by soaring federal debts. With higher levels of governments (federal and state) making the choices as to how even the future money of city residents will be spent, how will New York and other older cities fare this time?

As an analogy this post will compare the suburban and city projects that the MTA promised in the Program for Action, released in early 1968 when it as formed, with the system expansions and maintenance of existing infrastructure that actually took place in the five-plus decades since.  And go from there.

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DeBlasio’s Last New York City Budget: He Predicts Even More Inequality and Gentrification, or Else NYC is Toast, Because Those Cashing in And Moving Out Will Take More Off the Top No Matter What

Mayor Bill DeBlasio released his last budget recently, and it assumes that pre-pandemic trends will continue.  The rich will continue to get richer and the stock market bubble will continue to inflate, thanks to the federal government doing whatever it takes, regardless of the long-term cost, to prevent asset prices from going down.  Despite higher and higher taxes, the rich will stay in New York City and just keep paying.  So will hundreds of thousands of young adults, who will continue to live in less and less space for higher and higher rents and accept higher taxes, fees and fares and diminished public services, including crowding and unreliable service on the subways no elected official is in charge of.  More and more economic activity and educated workers will be concentrated in New York City compared with the suburbs, and in metro New York compared with the rest of the country.

All this will offset the extent to which DeBlasio’s (and all the other NY politicians) public union and contractor supporters will continue to get richer and richer, compared with other workers.   Other workers whose lower pay will keep the cost of living down for public workers and retirees, as the overall inflation rate remains below the long-term trend.  Based on these assumptions, the total city budget will grow more slowly than the total personal income of NYC residents over the long term.  Even if the average New Yorker continues to become worse off, because there will be more and more working adults.

But if that is what has happened, and will continue to happen, then why have NY’s state and local taxes been increased, over and over, and risen as a percent of personal income?  Instead of falling.  Why are debts continually increasing, and with interest payments rising as a share of city residents’ personal income despite rock bottom interest rates (also assumed to be permanent)?   Instead of debts being paid down.  Why does the Mayor plan to hand early retirement deals to city workers age 55 and over yet again, to “prevent layoffs,” after having already agreed to no-layoff guarantees? And why, in this Mayoral campaign, is no one asking questions about any of this – in the place with the highest state and local tax burden in the country, where the media is full of claims that we deserve even less in return because we aren’t paying enough – notably by the police and teachers?

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Homeless Hypocrisy Always Has A Home in New York – and Elsewhere

Governor Andrew Cuomo just announced the NYC subway would return to 24/7 service, following a shutdown that was supposedly about cleaning to prevent the spread of COVID-19, but coincidently followed an act of arson, allegedly by a homeless person who has been charged with murder, that left a subway train car destroyed and a train operator dead.

https://www.thecity.nyc/2020/3/27/21210390/motorman-s-death-in-subway-fire-adds-to-transit-worker-fears

Multiple sources told The City that authorities discovered a charred shopping cart with a possible accelerant inside the second car of a northbound No. 2 train that filled with smoke and flames as it pulled into the Central Park North-110th Street station at 3:14 a.m — around the same time as three other fires in and around the subway system.

More recently, another train operator has been suspended for photographing homeless people in the subway, and putting out the photos on Twitter.

https://www.thecity.nyc/2020/11/1/21544690/nyc-subway-motorman-mta-first-amendment-homeless

Recently there has been an article calling for the very limited number of public restrooms in the subway to be re-opened.

https://www.thecity.nyc/life/2021/5/2/22411841/nyc-subway-bathrooms-closed-pandemic-reopening

The article is exclusively about having the subway be the place that homeless people use the bathroom. Not about having subway restrooms for use by anyone else.  And not about having restroom facilities available anywhere else for homeless people to use the bathroom.

If not for past debts and pension increases, along with the need for more and more city workers to do the same (or less) work during the DeBlasio Administration (cops, teachers), the city might have the $ required to rent storefronts with restrooms and other services specifically for the homeless throughout the city.  Then it would just be a matter of deciding in whose neighborhood to site them.  The City apparently believes the subway is that neighborhood. The subway and jail — that’s the de facto homeless policy, except for now not jail.  Elsewhere the policy is exclude and ship away to somewhere else.

But then trying, and failing, to figure out what to do with troubled and troubling people like this has a very, very long history in New York – and elsewhere.  One filled with failure and folly.  Yet you have people today saying the same things, proposing the same things, that were tried and failed years ago.  If you are under 50, don’t know this history, and are prepared to face some tough realities, read on and follow the links below.

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The One-Way Check Valve of New York City’s Fiscal Relationships

The tax revenues from the wealth of New York City are not only for the benefit of people who live in New York City.

That’s what Governor Andrew Cuomo said in 2014 when New York City was booming, Upstate the Downstate suburbs were declining, and newly-elected Mayor Bill DeBlasio wanted to raise the New York City income tax to increase revenues specifically for the city budget.  Cuomo has made the “temporary” higher “millionaires” state income tax rates permanent instead, and sent the money to the rest of the state.  

Money is fungible.

That’s what the Governor said when the “dedicated” MTA tax revenues, collected only in Downstate New York, were transferred to the state budget and spent, in part, in Upstate New York.  Even as the subway system went into deferred maintenance, and most of the MTA capital plan was unfunded and never took place.  The MTA still refuses to publish a 20-year needs statement, showing this planned decline, today.

There is plenty of money, it’s just in the wrong hands.

That’s what Mayor Bill DeBlasio said, before signing labor contracts that ensured that those who benefitted from one retroactive pension increase after another wouldn’t be asked to make any offsetting sacrifices to help to pay for it.  Those members of the political/union class in on the deals could take more without anyone else other than a small number of $billionaries being left with less, he wanted to pretend. 

No blue state bailouts.

That is the attitude of Kentucky Senator Mitch McConnell’s view of the federal money being sent to “fiscally irresponsible” declining Blue States, perhaps at the expense of “self reliant” Red States.   

All but the last of these statements were made at a time when educated and talented Millennials, and the businesses that sought to hire them at low wages, were pouring into a small number of large central cities, including New York, even as the cost of real estate soared and the standard of living fell, creating a gusher of federal, state and local tax revenues pushing outward.  The reversal of this started slowly in the mid-2010s, after subway service decline to a “state of emergency” level as inflation-adjusted rents and sales prices peaked in NYC – and then surged during 2020 in association with the pandemic.  

So now, will money flow in the opposite direction, from other parts of the U.S., New York State, and from the political/union class to ordinary New Yorkers?   Or are New York City’s fiscal relationships a check valve that only allows money to flow in one direction?

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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 31st.  Another begins January 1st.  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.

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The 2019 American Community Survey: Last Year Compared With Prior Economic Peaks, NYC and the U.S.

The U.S. Census Bureau released 2019 data from the American Community Survey (ACS) last week, and 2019 will almost certainly represent the peak of the recent economic cycle.  Because there are booms and recessions, an enlightening analysis of trends over time requires that similar years be used.  For 2019, the peak of the everything bubble, that would be 2000, peak of the dot.com bubble, and 2007, the peak of the housing bubble.  Unfortunately, when the Census Bureau shut down American Factfinder and replaced it with data.census.gov, it only included data starting in the year 2010 – near the bottom of the last recession.  So this post only compares the latest data with data that I happen to have on my computer, downloaded over the past 15 years, or available on the Department of City Planning website.

In a break from my usual style, I’m not going to bury the lede.  From 2000 to 2019, the number of employed New York City residents soared by nearly 850,000. And the number of households with work earnings — fell slightly, remaining at about 2.5 million!   The number of households with Social Security income increased by nearly 200,000, or about the same amount as the increase in the total number of occupied housing units.  Housing has continued to be occupied by Baby Boomers, now moving into retirement, including cost-privileged housing – rent regulated, Mitchell-Lama, public housing, owned units purchased at pre-housing bubble prices.   Meanwhile, the young workers surging into the city were forced to double and triple up, sharing apartments and even rooms, because rents soared and they couldn’t afford their own place.  No wonder so many left when they became able to work remotely.  Comparing the 2000 Census with the 2019 American Community Survey, the median gross rent increased 42.0% — after adjustment for inflation. The percent of city renters paying at least 30.0% of their income in rent increased to more than 50.0%.

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How Did New York City Government Recover from the 1970s Fiscal Crisis?

The legend has it that New York City avoided bankruptcy, and recovered to become the thriving city it was until recently, because all of its interest groups got together and agreed to “shared sacrifice.”  The public employee unions agreed to contract givebacks, and having their pension funds invested in the city’s bonds.  The banks agreed to roll over the city’s debts.  The rest of New York State, under the leadership of Governor Hugh Carey, agreed to shift resources to NYC.  And the federal government, after initially telling New York City to “Go to Hell,” finally decided it had sacrificed enough and agreed to a bailout.  These powerful players made the sacrifices, and ordinary New Yorkers reaped the benefits.

I’m here to tell you that the legend is a lie, a politically convenient lie.  The people negotiating in the room deferred and lent a little, but gave back nothing.  The ordinary New Yorkers outside the room then made all the sacrifices required to pay back every dime, and then some, in higher taxes and collapsing public services.  The poor were left to suffer and die unaided, with the Bag Ladies dying in the street, the schools collapsed, the infrastructure deteriorated, the police allowed city residents to be victimized by crime on a large scale, and the streets and parks filled with garbage. Property in large areas of the city was abandoned, and life expectancy fell.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1470515/

Decades later, some city services hadn’t fully recovered. The beneficiaries, relocating to the suburbs, a few enclaves within the city, or retired to Florida, and the better off, were mostly unaffected.

In reality New York City recovered because things happened that those negotiating over its corpse could not have expected.  This post will explain, and use data to show, that high inflation was real reason New York City recovered from the 1970s fiscal crisis.

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