In response to yet another demonstration that New York City residents pay above average state and local taxes, Mayor Bloomberg told the New York Post that “New Yorkers pay more taxes because they get more services.” But if you tabulate how much New York City spends on different type of services, as share of its personal income, you see that isn’t really so. The Independent Budget Office shows that the local share of Medicaid and welfare, which most places don’t have to pay, jacks up New York City’s taxes, in part because our Medicaid program is so expensive, in part because having a local share shifts the burden of the poor to those who live and work near them. That’s us.
My research here shows New York also spends more on debt service and pension contributions, but that is to pay for past services, not current services. New York spends more on housing, but much of that has been federally funded. New York also spends much more than average on Police and Correction, and mass transit. The latter is a real savings for New Yorkers who have fewer cars. Finally, in the rest of New York State, public school spending is sky high. State taxes paid by New York City residents have been used to pay for some of that, with the city getting a low share of state school aid. The new budget continues that in a different way, with state taxes collected in New York City again used to offset high local property taxes elsewhere in the state, as a result of that high spending. At both the state and federal level, our higher local taxes have been, in effect, traded for a lower share of our federal and state taxes.
Otherwise, New York City’s spending is average overall, with more spent in some categories (many places don’t have public garbage pick up or a professional fire department) and less in others (parks, libraries, public schools, etc.). Paying back debts and higher pension contributions don't contribute to public services. It's hard to argue we are getting more due to that. And remember, the level of park and street maintenace here, and library hours, are less now than they were 50 years ago, and major new infrastructure improvements have been rare for four decades.