Category Archives: state tax burden

Health Care and Social Services: Census Bureau Public Employment and Payroll Data for March 2016 and March 2006 (And Related Private Employment)

For more than a century, the City of New York and State of New York have provided more health care and social services for city and state residents than the U.S. average, and employed more state and local government workers and paid for more workers in the non-profit sector to do it.  I had always associated the shift from health and social service provision by slothful, wasteful public agencies to non-profit social service organizations with the failure of the public sector in the wake of the unionization and public pension increases of the late 1960s and early 1970s, when New York City social services became contracted out on a large scale.   But reading Greater Gotham, I find the same issues and institutional battles were repeated in the early 1990s.  In the (actual, original) Progressive era, the shift was from the slothful, wasteful, contracted out services provided by non-profits, religious and political organizations to “more efficient” public agencies.  Basically, it seems any publicly-funded organization, whether public or private, will, in a generation or two, descend into self-dealing.

In March 2016, the City of New York employed 877 full time equivalent local government workers per 100,000 city residents in the Census Bureau’s “Public Welfare,” “Hospitals,” and “Housing and Community Development” functions combined.   (I’ll take about the Public Health function in a later post, because it combines regulation and service provision). That was down from 1,023 FTEs per 100,000 in March 2006.  The U.S. average was 302 local government workers, down from 309, and the Rest of New York State averaged 309, up from 296 but similar to the U.S. as a whole.   New Jersey and Connecticut were lower than average at 148, down from 191, and 91, down from 103, but in these small states there is more employment in these categories at the state government level.  Despite extensive local government health and social services employment, New York City’s 2016 private health care employment, at 5,715 workers per 100,000 residents, exceeded the U.S. average, at 4,737 per 100,000 residents.  And NYC’s private social assistance employment, at 2,142 per 100,000 residents, nearly doubled the U.S. average of 1,108. Unlike local government employment, private, substantially government-funded employment in many industries in these sectors keeps going up.

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New York Local Government Employment: 1990 to 2017

The Bureau of Labor Statistics released annual average Current Employment Survey data for 2017 this week, and rebenchmarked prior data to the latest unemployment insurance tax records, something it does every March.   The news was good for metro New York. Its total employment for December 2017 was 57,600 higher than had been reported prior to the adjustment, and its increase from the prior December was 22,900 greater.   For New York City alone, the December 2017 estimate of total employment was 25,400 higher, and the change over the year was 3,500 greater. The greatest source of error in this data is an unexpected number of jobs in new businesses, since these cannot be surveyed and must be estimated.

With the 2017 data out, I’ve repeated my charts of local government employment for New York City and the rest of New York State. The charts show that prior trends are continuing, with less local government employment relative to private sector employment. Mostly because more and more tax dollars are going to debts and retirement benefits for those no longer working, rather than workers still on the job and producing public services. For that reason New York City faces fiscal issues, and New York State and the MTA face budget deficits, even though New York City has added an incredible 500,000-plus private sector jobs over five years.

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Medicaid by State in 2016: I’ll Take What I Can Get

Some years go the Medicaid Statistical Information System (MSIS) State Datamart, which I once used to compare New York State with the U.S. average and adjacent states with regard to Medicaid expenditures and beneficiaries, was shut down. The most recent data I tabulated was for 2011.   Now, the Centers for Medicare & Medicaid has released their new system, T (Transformed) MSIS.

https://www.medicaid.gov/medicaid/data-and-systems/macbis/tmsis/index.html

I spent a long time looking around the site to try to find the data I once used, but was unable. But I was able to find some more recent Medicaid expenditure data by state and type of service here…

https://www.medicaid.gov/medicaid/financing-and-reimbursement/state-expenditure-reporting/expenditure-reports/index.html

Including 2016. And was able to get some limited data on spending per enrollee from a secondary source.

https://www.kff.org/state-category/medicaid-chip/

So after three and half years, I’ve decided to write an updated, if limited, post about how New York State’s Medicaid expenditures compare with the U.S. average and adjacent states.

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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?

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Medicaid and the State and Local Government Tax Deduction: The Federal Government Re-Declares War on New York City, Joining the Rest of New York State and New York City’s Political/Union Class

The Republican tax plan includes a repeal of the federal income tax deduction for state and local income taxes, and a partial repeal of the deduction for local property taxes. The Economist magazine likes the idea.

Republicans have since come to view the state and local deduction as something that encourages big government, rather than deterring it. It subsidizes Democratic-leaning states that set their taxes high…States are surely capable of balancing their budgets without receiving a federal subsidy for doing so. There is no real justification for distorting their fiscal decisions one way or the other.”

There is one justification, though no politicians on either side have an incentive to point it out. Thus making the policies that really shift money, and the identify of the beneficiaries, once again the “unsaid.” One reason that high tax states are in fact high tax states is that the federal government drains money out of them. This deduction of state and local taxes from federal personal income taxes is sort of a partial make-good.

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Medicaid: The Rest of New York State (Re) Declares War on New York City

After the 1994 election, the one that saw the Republicans take Congress after decades of Democratic dominance, the New York Times published a “portrait of the electorate” based on exit polls. It showed that the 1960s generation was the one most likely to vote Republican that year. “Those hypocrites” I thought. They were “liberals” in their youth when they wanted to get out of serving in Vietnam, and now they are “small government” “conservatives” when they are at their earnings peak and they don’t want to pay taxes, but I’ll bet they’ll be “liberals” again when its time to collect on federal old age benefits. But they surprised me by being even worse than I thought. They still want even more tax cuts for themselves, and even more old age benefits for themselves, such as the Medicare prescription drug benefit. They want to borrow to pay for it. And to ensure our foreign creditors that the money will be paid back by someone else, they also want deep cuts in public services that younger generations need now, and drastic reductions old age benefits — not for themselves but for those to follow them – effective in the future.

With their aging, stagnant populations, the Downstate Suburbs and Upstate New York are now disproportionately occupied by, and almost exclusively represented by, members of Generation Greed. And back in the 1990s I had similar thoughts about their possible upcoming hypocrisy with regard to Medicaid funding, and specifically the local taxpayer share of it. But once again I’ve been surprised, because once again my cynicism was insufficient. They are even worse people than I thought. And it’s past time from them to be called to account for it.

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Education: Census Bureau Government Finances Data for FY 2004 and FY 2014

For the United States and most parts of it, the decade from FY 2004 to FY 2014 saw soaring public employee retirement costs, and weak growth for taxpayer income. In response to these trends state government assistance for public elementary and secondary schools fell relative to the income of all state residents, and total spending on public schools fell as a share of everyone’s income as well. But there was an offsetting factor. School enrollment fell as a share of the total population, and in many cases in absolute numbers, as the very large “Baby Boom Echo (Gen Y, Millennials) Generation exited school with smaller generations behind them.

At the same time, and perhaps driven by the same demographic shifts, state and local government spending on public higher education increased when measured per $1,000 of everyone’s personal income. But how did different states compare, and how was per-student elementary and secondary school spending affected? That is the subject of this post.

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