Category Archives: new york state legislature corruption, dean skelos, sheldon silver

DeBlasio and Cuomo Administration Management: A Review

Imagine it’s 10:30 am on a typical weekday during the school year.  At that time New York City is paying 211,843 members of the NYC teachers’ retirement system (or was a couple of years ago).  What are they doing?  If you made a pie chart, what would it look like?  How many are retired? (We know that, it was 88,507, or 41.8% of the total).  How many are out sick?  How many are in preparation periods?  How many are on break?  How many are in out of classroom assignments or administrative posts?  How many are on release time?  How many are on sabbatical?  How many are the second pedagogical employee in a classroom?  How many are doing not much useful because they are waiting for something from someone else, because of some disorganization that wasted their time?  And finally, how many are actually doing something useful with regard to the education and child care of children?

What if, instead of the pie chart being based on the number of people, it were based on the total cost of the NYCTRS members in each category – their cash pay or pension, their health benefits, their other benefits?  Now imagine the same charts being produced for all the other city and state agencies – police, sanitation, fire, transit, corrections, judiciary, parks, social services, hospitals, etc.  

Good management seeks to ensure that workers have the qualifications, motivation, training, tools, organization and scheduling to do useful work almost all the time they are being paid, and to limit the amount going to those not doing such work, to the extent possible.  So that the workdays fly by, and the maximum (or at least a fair) amount in services is produced for a given about of cost.  By that standard, how good was the management in the Cuomo and DeBlasio Administrations?  How fair is the deal the employees and contractors of the City and State of New York provide to other New Yorkers, compared with what public employees, retirees, contractors and their retirees expect to be provided with by private sector workers in exchange?  What would happen if an organization such as Consumers Union (Consumer Reports) were to examine the quality and value of public services provided by state and local governments the same way it looks at the goods and services provided by private corporations?  That is the topic of this post.

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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.

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Corruption:  Another Case of Capone on Tax Evasion?

Shockingly, yet another (in this case former) member of the New York State legislature did something that someone thinks is wrong.

https://www.cityandstateny.com/politics/2022/04/lt-gov-brian-benjamin-arrested/365522/

Lt. Gov. Brian Benjamin has joined the ranks of New York politicians arrested for alleged corruption…Prosecutors say Benjamin, while still serving as a state senator representing Harlem, was involved in a bribery conspiracy that involved using state money to indirectly benefit his unsuccessful 2021 campaign for New York City comptroller.

“This is a simple story of corruption,” U.S. Attorney Damian Williams of the Southern District of New York, which oversees federal prosecutions in Manhattan, said at a Tuesday press conference. “Taxpayer money for campaign contributions … That’s bribery plain and simple.”

Ahh, so that’s why Benjamin is in trouble.  It isn’t because New Yorkers ended up paying more and getting less because insiders were self-dealing at their expense.  It’s because the alleged corruption was plain and simple, unlike the barely disguised and complicated corruption that is par for the course.  You’d think he’d be more skillful.

The federal charge represents a turning point for Benjamin, who has been accused of numerous ethical misdeeds over the years – none of which involved a criminal charge up to today.

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Home Health Care and Local Government — A Growing Burden on NYC’s Serfs

Not long ago, I read about therapists getting arrested for stealing from programs for developmentally disadvantaged children, overbilling and not providing the services for which they had been paid.

https://www.audacy.com/1010wins/news/local/9-nyc-therapists-stole-usd3-3m-from-child-development-program

While I can’t find it now, I distinctly remember one of the articles saying that the crew had paused their scheme for a while in 2014, after another group had been caught doing the same thing.  Were the federal authorities really going to do something about this?  (They don’t have to worry about the state authorities, as NY state politicians are pro-fraud at the expense of the serfs, in exchange for political support).  After a year or two, the scammers decided the answer was no and resumed their criminal activities.

Meanwhile, the federal government was also investigating home health agencies for defrauding Medicaid.  The investigation took place in 2020, and ended late that year.

https://www.justice.gov/usao-sdny/pr/10-defendants-arrested-home-health-aide-fraud-scheme

“Money that’s earmarked for Medicaid-approved services, and fraudulently paid out to those who don’t render these services, is a crime that’s ultimately paid for by taxpayers themselves. In this case, as we allege, there were even patients involved in the kickback scheme who were willing to play along with the no-show scam in order to earn a few extra bucks. With a nearly $5 billion increase in managed long-term care plan spending recorded over a recent six-year period, the money paid out to those charged today is no drop in the bucket.”

So, was there a pause in New York City’s stunning home health care boom?  And did that pause subsequently end?

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Medicaid by State and Age Group in FY 2019:  Curiouser and Curiouser

The Centers for Medicare and Medicaid no longer provides state-level data on Medicaid expenditures and beneficiaries by age group, but it does provide state-level data on enrollment, expenditures, and expenditure per enrollee by “basis of eligibility.”  Spending per enrollee isn’t as good as spending per beneficiary in analyzing how much is being charged by the health care industry, because expenditure per enrollee is affected by the number of people enrolled who do not currently require expensive care.  And basis of eligibility is not as good as more detailed age groups, but it at least does provide separate data for children (under 18), non-disabled adults (18 to 64), seniors (65 and over), and disabled adults and children.  

When I looked at the per enrollee New York State data for FY 2019, however, I found it was reported to be far below the level of 2018, and even below the U.S. average for children and non-disabled adults.

Why?

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Medicaid By State in 2020:  At Least Some of the Data Is Back

I once wrote a post on how New York’s Medicaid spending, by age and by type of service, compared with the national average and nearby states, every couple of years.  The “State Datamart” that allowed crosstabulations of the number of Medicaid beneficiaries and expenditures, by age and by type of service, disappeared after FY 2012, after fewer and fewer states had been included for several years.  That data had allowed expenditures per beneficiary, by age group and by service type, to be calculated for each state, and the number of beneficiaries in each age group to be compared with the total population in that age group, and the population in poverty in that age group, by state.

Today there is a different set of data that has been posted, and I plan to tabulate what is available and write a couple of posts.  The PDF report is here.

And the data is at http.//macpac.gov/macstats.

It isn’t what I was once able to get, but it is more than I’ve been able to find for many years.  A quick comparison of total Medicaid expenditures in 2020, as a percent of the personal income of residents of each state, and what it cost those residents in state and local taxes, follows.

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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…

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.

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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 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.

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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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