Census FY 2006 Public Finance Data: The Spreadsheets

Am I a nerd or what? Yes I played a couple of sessions of paddleball with a friend, took two long bicycle rides with my wife, and attended a barbeque with relatives this Memorial Day weekend. But I also downloaded and crunched down fiscal 2005-2006 comparative state and local government finance data from the U.S. Census Bureau. I’ll write about it when I can, but for those with open minds and a willingness to look at tables, I’ve decided to post the spreadsheets right away.

One spreadsheet shows state and local taxes as a share of the personal income of area residents for New York City, the rest of New York State, and all the other states and the District of Columbia. The second shows revenues and expenditures in many categories, generally expressed as the amount per $1,000 of personal income of area residents, for local governments in New York City, the Rest of New York State, the U.S. and New Jersey. The output worksheets are primed to print on 8 ½ by 11 inch paper. I decided to keep track, and it took me about eight hours to get from the start of work to this point, despite being the fastest grunt-worker on earth (or so I believe). A few more notes follow, for those who haven’t read my posts on this subject before.

I express government finance data as a share of personal income because places where average personal income is high also tend to have a high cost of living; with their higher incomes, residents of such places can afford to pay higher taxes per person without it reducing their income as much, but more must be paid to attract an equal number of public employees and contractors of equal quality given the higher cost of living. Measuring revenues and expenditures as a share of personal income adjusts for both these factors. So the fact that New York is expensive has already been taken into account in these comparisons, in a fair way.

Every five years, the U.S. Census Bureau conducts a Census of Governments, adding up public finance and employment information on every state and local government in the United States, and presenting the local government totals for every county in the country. The last was 2002. The next is 2007, so far more detailed data that this will be slowly rolling out over the next year. It will be possible, for example, to compare New York City with Los Angeles County and Nassau and Westchester Counties with Orange County, California and Fairfax County, Virginia if someone wants to. The public employment data is due out this fall; the public finance data may or may not be available in time for presentation before the Mayoral primary next year.

In general, between census years the Bureau surveys some of the local governments to produce estimates of total state and local government activity for each state and the national average. It also, however, provides individual government data for those included in the survey. New York City and the Port Authority of New York and New Jersey are always included, and (other than a harbor commission with virtually no employment or spending) they are the only local governments in New York City. So by adding the two up (but assigning part of the Port Authority to New Jersey) one can get data on local government in New York City between census years, and by subtracting New York City from the state total one can also get an estimate of the rest of New York State as well. For other states, the estimate for all local governments in the state is all that is available for FY 2006.

In addition to dividing up the Port Authority, there are several government functions that are generally local government activities but are sometimes state activities. Some states, notably New Jersey, operate local schools in districts they have taken over, and virtually all the mass transit in New Jersey and New York State outside New York City is counted as state government, not local government. To adjust for this, I compare the state and local totals with New York City in these categories and others like them. If you go though the spreadsheets, you can see what the adjustments are.

I focus on local government because local governments do most of the work of government, while state governments generally just collect and then pass on money to either local governments as aid, or the private sector as payment for public services (ie. the health care and social services industries), or individuals (unemployment compensation). States are generally directly responsible for public universities, state prisons, and state unemployment and worker compensation insurance programs. I’ll try to do a state government spreadsheet later, but the main impact of state government is through local governments or the non-profit sector.

The Census Bureau distinguishes between “direct” expenditures and “inter-governmental” expenditures — the latter are simply transfers between one government and another. Based on total expenditures, one can count the same dollar multiple times. For example, if a dollar is spent in a New York City public hospital, it is counted as “direct” local government public hospital spending. But if that dollar came from Medicaid, it is also “spent” as state to local aid for public hospitals. But since New York State requires New York City to fund part of its Medicaid program, which it is credited for administering, that same dollar may be counted a third time as local to state aid for public welfare. Money is only spent “directly” once. The data shows direct expenditures except where specified.

One of the advantages of accessing detailed data from the Bureau, as opposed to the spreadsheets it publishes, is that more detail is available on revenues. In summary tables, charges for services and revenues from other governments are summed to totals. Using the details, I’m able to figure out how much of NYC’s local government transportation expenditures are paid for by charges for services and motor vehicle taxes, and how much of its social services spending is paid for by federal and state aid. Local government to state government aid, generally not reported in summary tables because New York State is the only state with very much of it, can also be analyzed.

The data show that general patterns remain in place. New York City’s state and local taxes are still sky-high as a share of its residents’ income — it would be number one if a separate state. The rest of the state would be number five, behind NYC and Alaska and Wyoming (which get much of their tax revenue from mineral taxes local residents and businesses do not have to pay) but ahead of just about everyone else. This is surprising because 2006 was a decent year for personal income, which should have pushed taxes as a share of personal income down more than the tiny reductions observed. The main difference in tax cost for New York City is spending on debts, pension contributions, Medicaid aid to the state, retiree health care, and the police. The main difference in the rest of New York State is sky-high public education spending. NYC public education spending remained just below the national average, as a share of the income of city residents, due in large part to schools which drive children into private schools or out of the city. (Per child, adjusted for the cost of living, NYC’s public education spending was now much higher than the national average, as show in a previous post).

I’ll write about the details as the mood strikes me, but those who are interested can see them for themselves right now by downloading the spreadsheets and printing from the output worksheets.