Have you seen all those ads from candidates for Governor? I can’t seem to avoid them. You turn the channel and you run into another one. I’m here to tell you that if you are just a regular person living their life, what is said on the commercials doesn’t matter. What matters is:
Who paid for them?
What, during the real campaign that takes place in secret, were they promised in exchange?
How and when will you be made even worse off to pay for this?
I’m not in a position to answer those questions about the future. The deals are secret, and stay under Omerta for eternity. What we can do is see who the DeBlasio and Cuomo Administrations, with help from the state legislature and NYC council (always eager to cash in the future of the serfs) did in the past. At least to the extent that Comptrollers Stringer and DiNapoli didn’t completely fudge the data they reported to the Census Bureau, also in exchange for consideration, this post will attempt to find out.
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.
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.
As noted in my prior post, the release of rebenchmarked annual average Current Employment Survey data from the Bureau of Labor Statistics shows that NYC lost the staggering total of 517,500 private wage and salary jobs from 2019 to 2020, by far the most since at least 1950 and probably the most ever. On a percentage basis only Hawaii fared worse among U.S. areas of significant size.
More recent data is even worse. The monthly e-mail from the New York State Department of Labor shows a decrease of 626,800 private sector wage and salary jobs (15.3%) in NYC from February 2020, before the shutdowns, to February 2021.
The annual average data shows that while the sectors that were shut down suffered the steepest job losses, there were significant decreases across all sectors – even health care. And yet annual average New York City local government employment was just 1,400 (0.3%) lower in 2020 than it had been in 2019. For state and local government combined the decrease was just 1,600 (0.3%).
Measured from February 2020 to February 2021, the NYC local government employment is down just 4,200 (0.8%), with a decrease of just 600 (0.4%) for elementary and secondary schools – despite falling enrollment. And Mayor DeBlasio has cut deals with the unions to guarantee no layoffs until half a year into the next Mayor’s term, regardless of circumstances or consequences.
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.
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.