Category Archives: new york state budget

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.

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.

Continue reading

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.

Continue reading

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.

Continue reading

Comparative Public School Spending from FY 1997 to FY 2019: In New York The More They Get, the More They Feel Entitled To, and The Less They Provide in Return

Let’s start this post the way the prior one ended, with the quote from the ACLU, referring to the level of public school funding in New York in FY 2019.

https://www.nyclu.org/en/news/ny-cheating-its-schools-out-billions-dollars

Every year, the government of New York shirks its legal responsibility to adequately fund our public schools.

In 2006, the New York State Court of Appeals ruled New York was violating students’ constitutional right to a “sound and basic education” by not putting enough money into its schools. The court ordered that schools were entitled to $5.5 billion more in unrestricted state funding, known as Foundation Aid….

But year after year, state lawmakers substituted politics for the Foundation Aid Formula, shortchanging schools and hurting students who need the money most.

That is, simply put, not true.  In the 1990s New York City school spending was low, in part because a state school aid formula discriminated against the city’s children.  Judge Leland DeGrasse ordered the city’s school aid to be increased by $1.9 billion, based on the low funding levels of the time.

https://trellis.law/judge/leland.g.degrasse

As a trial judge, he ruled against New York’s system for financing public schools in Campaign for Fiscal Equity v. State. Ultimately, the decision, which sought to overhaul the state aid-to-education formulas, was appealed to the New York Court of Appeals, which resulted in an additional $1.9 billion in state aid awarded to New York City schools.

I know this history because I provided data to the Campaign for Fiscal Equity, the same kind of data that will be discussed below.  Much to my disappointment, however, CFE turned out not to be interested in either fiscal equity or better schools – just a richer deal for those working in the public school system.  So despite another $1.9 billion (and another $1.9 billion and another $1.9 billion and another $1.9 billion) they kept suing. In exchange for political support for his election for Governor, Eliot Spitzer then settled the suit for even more money.  No judge ever ordered it, or found that was what was required. It was a political deal, with a massive increase in pension benefits for teachers as part of the same deal, not better education.

That deal, which multiplied by a bunch of prior retroactive pension increase deals (now starting up yet again), was for me a kind of last straw. So what was the level of school spending in NYC, by category and compared with other places and the past, in FY 2019 when the ACLU claimed that the people of New York were cheating those who worked in education out of $billions?  Read on and find out.

Continue reading

Census Bureau Public School Finances Data for FY 2019: New York’s Sky High Spending Per Student Is Soaring Further As Enrollment Falls

The U.S. Census Bureau released its annual elementary and secondary school finances data for FY 2019 on May 18th2021, and as usual I have downloaded and compiled it.

https://www.census.gov/programs-surveys/school-finances/newsroom/updates/fy-2019.html

Anyone else could do the same – any media source, any government agency, any public policy analysis organization, any politician, any candidate for Mayor of New York City or City Council – if they were willing to see what it shows.  And any could send postcards to everyone in New York City with the following information.

In FY 2019, the New York City school district spent $31,578 per student.  That was more than double the U.S. average of $15,569, and higher than the averages of $29,451 for the Downstate NY Suburbs, $22,782 for New Jersey, $19,707 for Massachusetts, and $23,686 for Connecticut.  These are high-wage high-cost of living areas on the Northeast Corridor, but adjusted downward for this factor New York still spent $24,764 per student, still 59.1% higher than the U.S. average and higher than the $23,906 for the Downstate Suburbs, similarly adjusted, and $23,622 for the Upstate Urban Counties.  The average for the Upstate Rural Counties, at $25,058, was slightly higher.  On instructional (ie. teachers) wages, salaries, and benefits alone, the New York City school district spent $18,229 per student.  That is $364,577 per 20 students, and $218,746 per 12 students.

In FY 2019, the people of New York City and State were being sued for underfunding their schools, and cheating their teachers, out of $billions of additional dollars.

Continue reading

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?

Continue reading

Graphic Summary: 2017 Census of Governments, Employment and Payroll

Back in late 2019, I published a tabulation of data from the employment and payroll phase of the 2017 Census of Governments.  The data included full-time equivalent (full time workers plus part time workers converted into full time workers based on hours worked) state and local government employment, by function (police, parks, schools), per 100,000 residents of each area.  The population data was taken from Local Area Personal Income spreadsheets from the Bureau of Economic Analysis.  For the population of the rural areas of New York State as a whole, I subtracted New York City, the Downstate Suburbs, and the Upstate Urban Counties from the state total.  All this sort of data usually gets revised as new information becomes available.  But when the new population data was released, soon after I had completed the entire effort with spreadsheets, tables, charts and posts, what I found was a shock.

Somehow the population data for New York City had been altered – and inflated, thus reducing apparent NYC government employment per 100,000 residents. This wasn’t the usual correction. It turns out that in the old data, all the state’s counties combined didn’t add to the New York State total! Since I had gotten the population for the rural Rest of New York State by subtraction, the population of that region was underestimated by a significant percent, causing the region’s population losses, and its government employment per 100,000 residents, to be exaggerated.

I immediately published revised versions of the large spreadsheets with data for all government functions.  And now, I have gone back and altered the spreadsheets on individual government functions, the tables, the charts, and the posts on those functions, as well. The changes aren’t great enough to alter any conclusions.  I changed many numbers, in the tables, charts and text, but very few words.  Right is right, however, and the data linked here has now been fixed for that BEA error.

Having made that effort, I have decided to publish a graphic summary of the employment and payroll phase of the 2017 Census of Governments, along with links back to the more detailed (and now corrected) posts.

Continue reading

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.

Continue reading

Taxes & Generational Equity: New York State and New York City in 2020

With a deteriorating mass transit system, despite high and rising taxes and fares, and soaring rents (and property tax revenues from renters), young workers have been leaving New York City since 2015, a trend that has accelerated since the COVID-19 pandemic.  And there is talk that the wealthy will move away since they will now have to pay taxes, after not having to pay taxes in the past, according to various headlines over the past two years.  From “not taxing the rich,” according to those headlines, New York is suddenly taxing the rich more than any other state.  Even California.

In reality, of course, New York already taxed the rich, and everyone else, far more than any other state.  And it isn’t close.  As I showed here…

In FY 2017 New York State’s average state and local government tax burden was 13.8% of state residents’ personal income, compared with the U.S. average of 9.8% and 10.3% for California.  If New York City were a separate state, its burden would have been 15.1% of income, and rising, compared with 12.9% on average for the rest of the state.  And at that level, according to any elected officials who didn’t want to face a primary, and most of the local media, city residents deserved deteriorating public services, because they weren’t paying enough.

There is one group of people, however, who face a very different tax burden in New York, compared with other places.

https://www.businessinsider.com/personal-finance/new-york-state-affordable-retirement-social-security

Retiree David Fisher, 69, has lived in New York state since age 27.  He has found that while living there was expensive while he was working, New York is much more affordable in retirement.  This is primarily for three reasons: New York State doesn’t tax Social Security or retirement account distributions, the state has a program to reduce property taxes after age 65, and there’s a low cost of living in the Rochester, New York, area where he lives. 

Retired public employees, like the Senior Voters in our tax analysis of three prototypical Brooklyn couples, have it even better – none of their retirement income, paid for by poorer working serfs, is taxable.

Continue reading

Taxes & Generational Equity in 2020: An Updated Turbo Tax Analysis of Three Prototypical Brooklyn Couples

It’s tax time, and it has been six years since I last compared the federal, state and local tax burden on two prototypical Brooklyn couples using Turbo Tax and other information:  the Senior Voters, home-owning former NYC public employees who got to retire at age 56, and the Young Hopefuls, a couple trying to get by while renting and working.  Now that the Senior Voters are age 69 and receiving Social Security, and the Young Hopefuls are age 41 (with Baby Hopeful reaching age 15), it’s time to find out what has changed.  

In the past I showed that the Young Hopefuls, despite much being poorer, would pay a much higher percent of their income in taxes.  A large share of those taxes would go to pay for the pensions and senior benefits of senior voters.  When the cost of health care, child care and housing were included, the Senior Voters would have enough money left for a very affluent, high consumption lifestyle.  The Young Hopefuls would have barely enough money to get by, despite matching the median income of NYC households.  Worse, given soaring public and private debts, the Young Hopefuls will not be getting the same benefits when they are old themselves. Poorer than the Senior Voters had been in young adulthood, and also now in middle age, they will be even worse off at the end of their lives, due to deals a generation of senior voters cut with themselves to put in less and take more out.

As a new twist I have added a third couple:  Chad the Private Equity Guy and his new wife Trixie, originally from metro Chicago and the Chicago Merc, but now working in private equity in NYC while living in a luxury condo in Dumbo.  While the difference in the tax burden on the Young Hopefuls and Senior Voters shows how harshly work income is taxed compared with retirement income, especially public employee retirement income in New York, Chad and Trixie’s tax bill shows how much investment income is favored at the federal level.   And the deals for seniors and the rich have just kept getting richer, even as later born generations of ordinary Americans, on average, keep getting poorer and deeper in debt.   Both political parties have contributed to the trend, a reality that belies their alleged increasing partisan warfare.

So what percent of income would these three couples pay in taxes?

Continue reading