Category Archives: Uncategorized

Brooklyn’s Business Boom: Retail and Other Consumer-Driven Sectors

In the previous post, which should be read first, I chronicled the location of and trends in Brooklyn’s office-based businesses. This post is about consumer-driven businesses. How hard is it to know the future? Consider the 1958 report from consulting firm Voorhees Walker Smith & Smith, Zoning New York City, which formed the basis of New York City’s current zoning resolution, passed in 1961.

https://archive.org/details/zoningnewyorkcit00voor

Page 11. The growth of the supermarket has plainly reduced the role of the neighborhood food store. The efficiency of the large supermarket is such that a given volume of sales can be handled with sharply lower frontage requirements and, even allowing for parking areas, with appreciably lower land requirements…Simultaneously with the growth of the supermarket has appeared the integrated shopping center, ranging in scale from neighborhood units of ten stores to gigantic complexes with department stores and chain store branches. Since the main attribute of the shopping center is one-stop shopping for the automobile customer, the radius of retail trade areas has dramatically increased.

It is now a commonplace that both the downtown shopping district and the local string street have been adversely affected by these innovations in retail trade (resulting in) the excessive amount of retail frontage in the numerous strip developments of the city. A survey of frontages in sixteen shopping districts in widely scattered parts of the city indicated an average retail vacancy rate of nine percent, with an additional six percent of store frontage occupied by non-retail uses.

It is now 59 years later, and as a result of additional innovations in retail trade, the entire economic structure described by Voorhees Walker Smith & Smith is collapsing in suburban and Sunbelt America, as the strip districts of Brooklyn boom.

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Brooklyn’s Business Boom: Office

Brooklyn is one of the epicenters of the new, youth-driven economy. Employment, and the number of employed and self-employed workers, have soared, but the number of poor people living in the borough has also increased, and its average income remains far below the U.S. average.

Brooklyn’s economic base has long consisted of two things, commuting to Manhattan and bringing back money to be spent in the local consumer economy, and something else. That something else was once agriculture, and then manufacturing and the city’s seaport. With the city’s economic collapse in the 1970s, that something else was largely public assistance and government-funded health care and social services, which dominated the borough’s employment. The borough even lost a great deal of its local consumer-driven business activity, due to its falling relative income and the custom of its better off residents choosing to drive elsewhere to go shopping. Today, however, there is something of a turnaround, both in the economic base in the consumer economy. But where is it concentrated, and why? I had my daughter create some maps of data by zip code to find out. This post is about office-based businesses, and another will follow.

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Long Term Pension Data for New York and New Jersey to 2016: Teacher Pensions

Across the country taxpayer pension costs for public schools are soaring, and state and local taxes are being increased while money actually spent on education is being cut to pay for it. You see it in California, where a huge tax increase “for education” went exclusively to pensions, and in Illinois, where the City of Chicago’s schools are on the brink of bankruptcy. You see it in Kansas and Oklahoma. In some cases soaring pension costs are the result of past taxpayers’ unwillingness to fund the pensions teachers had been promised, promised for some in lieu of Social Security, which those teachers will not be eligible to receive. In other cases pension costs are soaring because politically powerful teachers’ unions cut deals with the politicians they controlled to drastically increase pension benefits, beyond what had been promised and funded. In many cases there is a mix of both factors.

New York City happens to be the place where the teachers’ union, the United Federation of Teachers (UFT), is perhaps the most guilty, and taxpayers are the least guilty, with regard to the pension crisis. And it the place where the burden of teacher retirement is the greatest. The result is large class sizes despite extremely high public school spending, and a host of services that New York City children do not receive. With virtually all New York politicians in on the deals that have left the New York City Teachers’ Retirement System (NYC TRS) among the most underfunded in the country, however, there has been a desperate attempt to cover up the damage. So the consequences of retroactive pension increases for NYC teachers (and police officers and firefighters) have shown up not so much in education (and policing and firefighting), but in every other public service in New York. And all of this is under Omerta.

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FY 2015 Census Bureau Data on Public School Spending In New York: Robbed, Sneered At, Resented and Sued

If you live in New York State, there is a lawsuit that claims you have it too good. Your taxes are too low, despite being the highest in the country at the state and local level combined, and too much money is being spent on public services other than public schools, such as mass transit, social services, housing, parks, libraries, everything else. The lawsuit has been filed by the Alliance for Quality Education (AQE), funded in part by the United Federation of Teachers (UFT), New York City’s teachers’ union, and the NYSUT, the New York State teacher’s union. It claims that New York State residents have stolen $billions for people working in New York’s schools each and every year for more than a decade. And that as a result we are getting what we deserve: schools that are so bad that at least in New York City and Syracuse, they violate the state constitution.

Of course the AQE is claiming it is suing “the state,” not the people who live in it.   But where would “the state” get the additional $billions that those working in education demand be spent on schools? From higher taxes and lower spending on other things, that’s where. The same place that the additional spending on schools that has happened in the past came from. And note that while the claim is that the schools are bad, there is no admission that perhaps that New Yorkers are being cheated by those who work for the public schools. Instead the assertion is the other way around – that those who work in the schools are being cheated by New Yorkers, because they aren’t being given the money they deserve. But how much are the schools getting getting? Let’s go to the Census Bureau’s public education finance data and find out.

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Public School Spending In 2015: Data from the U.S. Census Bureau

Wait until next year! When the U.S. Census Bureau released its 2015 data on public education finance last month, I thought that instructional (ie. teacher) wages and benefits per 20 students in the New York City public schools might exceed $300,000 for that year. But instead it came it came up just short at $297,482. Moreover, total spending per student in the NYC schools also came up just short of Greenwich, Connecticut, at $25,068 compared with $25,737. Thought NYC did spend more per student than Westport ($23,798) or Darien ($20,805).

Those are among the tidbits that can be gleaned from my compilation of this data, for 2015 and (with an adjustment for inflation) 2005. As is my custom, I’m going to provide the spreadsheets now, think about them for a while, and then provide my analysis and express my opinion. The data presented includes revenues and expenditures per student, by category, for the U.S., New York City and other regions of New York State, selected other states, and every school district in New York and New Jersey. In some cases with and without an adjustment for the higher cost of living on the Northeast corridor, which reduces the value of school spending here compared with the U.S. average. A discussion of where the data comes from and how it was tabulated (mostly copied from last year) and links to the new spreadsheets, follow.

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Long Term Pension Data for New York And New Jersey to 2016: Police and Fire Pensions

In 2016, according to data reported to the U.S. Census Bureau, the New York City Employees Retirement System (NYCERS) had 263,235 active members who were working, and 149,940 beneficiaries receiving periodic benefit payments, a ratio that implies just 1.75 years worked for each year in retirement. And it is much less than that if workers who depart early in their careers and don’t receive pension benefits are excluded. That year, the New York City Police Pension Fund Article 2 and the New York City Fire Department Article 1B Pension fund combined had just 45,047 active members working and yet had 66,374 beneficiaries receiving active pension benefit payments, a ratio that implies a little over two-thirds of a year work for each year in retirement.

In 2016, New York City taxpayers contributed $3.4 billion to NYCERS. NYC taxpayers also contributed $3.4 billion to the police and fire pension funds, the same amount even though NYCERS covered nearly six times as many city workers. According to City of New York budget documents, in FY 2018 taxpayer pension contributions equaled 52.5% of wages and salaries for the NYC Police Department, where most workers are covered by the New York City Police Pension Fund Article 2, and 71.8% of wages and salaries for the New York City Fire Department, with most workers covered by the Fire Department Article 1B Pension Fund. But just 13.0% to 17.0% for the most of the non-uniformed city agencies, with workers covered by NYCERS. What is more, and what is worse, is that the current level of NYC taxpayer pension contributions to the police and fire pension plans are not enough.

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Long Term Pension Data for New York And New Jersey to 2016: The Large Plans for Most Public Employees (With Commentary on Hedge Funds)

New York City and New Jersey, like most places, have separate pension plans for teachers, police officers, and firefighters, and large general pension plans for all other public employees combined. This post is about updated Census Bureau data, for the years 1957 to 2016, for the general pension plans: the New York City Employees Retirement System (NYCERS), which also covers New York City transit workers, the New York (state) Public Employees Pension and Retirement System, which also covers local government workers (including police officers and firefighters) in the rest of New York State, and the New Jersey Public Employees Retirement System, which covers most public employees in New Jersey. In general the findings are the same as they were the last time I analyzed this data.

https://larrylittlefield.wordpress.com/2014/07/20/updated-long-term-pension-data-for-new-york-and-new-jersey-the-large-plans-for-most-public-employees/

It has been a few years, however, so I have decided to repeat the analysis and update the charts below, and add a further discussion on hedge funds and the rate of return at the end. The data shows a pension disaster not only for New Jersey, where taxpayers have contributed very little over the years, but also for New York City, where taxes are high and taxpayers have contributed massively. The New York State system is in somewhat better shape – but in much worse shape than a decade ago.

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