Four years ago I did 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 40 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. Having a sold out future means having a future of higher state and local government taxes, diminished public services, and lower pay and benefits for newly hired public employees, and that is what many parts of the United States – most, in reality – are facing.
Over the past month I have re-created that analysis with data through FY 2016, the latest available, rather than just FY 2012, while adding some details. This post and the next three will show what I found.
In Plato’s Republic, the discussion of morality begins with the tale of Gyges and the Ring. Glaucon, Plato’s elder brother, presents the “common view” of morality that Socrates will oppose. “What people say is that to do wrong is, in itself, a desirable thing; on the other hand it is not at all desirable to suffer wrong, and the harm to the sufferer outweighs the advantage to the doer. Consequently, when men have had a taste of both, those who have not the power to seize the advantage and escape the harm decide they would be better off if they made a compact neither to do wrong or to suffer it.” And that is morality and law: an uneasy compromise between doing evil to others with impunity, and having others do evil to you without recompense.
To prove this Glaucon recounts the tale of Gyges, a humble shepherd who finds a ring that, turned the right way, makes him invisible. Thus able to take what he wanted with impunity, he raped the Queen and murdered the King. If there were two such rings, Glaucon asserted, one given to a just man and another to an unjust man, they would both act the same. “Surely this is proof would be strong proof that men do right only under compulsion; no individual thinks of it as good for him personally, since he does wrong whenever he has the power.” So what would Plato think of my so-called Representatives in the U.S. House of Representatives, the New York State Senate, and the New York State Assembly, all of whom are invisible?
The Governments Division has released data on state and local government pension plans for FY 2012, and I have downloaded and compiled it for that year and a decade and two decades earlier. The data shows the arrival of a crisis in public employee pensions, with soaring public employee retirement costs causing or threatening municipal bankruptcy and leading to tax increases, service cuts, and reductions in benefits for future (and in some cases current and past) government employees. All this has shown up in the data between FY 2002 and FY 2012, although most of the decisions that led to the crisis were made in the previous decade.
The data shows that the people of New York City are among those who have been made worst off as a result of the rising cost of public employee pensions. There is more pension drama elsewhere simply because those living there are unwilling to live with the high tax burden and low public service levels (including 50 years of lousy schools) that have been imposed on New Yorkers since the 1970s. Those imposing that burden in New York benefit from low public participation in state and local government, something our state politicians go to great lengths to encourage. To show how and to what extent people are being affected, I have produced a spreadsheet that has tables with data for New York City and the Rest of New York State, and state and local government combined in all the other states and the U.S. as a whole. That spreadsheet, a series of charts, and commentary may be found below.