Author: Larry Littlefield

As I reported here, in 2003 New York State was charged $7,912 per Medicaid beneficiary, 76% higher than the national average of $4,487 and more than any other state.  This is not a surprise, as New York has had the highest Medicaid spending per recipient as far back as I have collected data.  And, I once read a paper that described New York State’s Medicaid program as being vastly more expensive than other states in the early 1970s, less than a decade after the program was created.  In fact, I saw a film on the Channel 25 “City Classics” program showing a press conference by former Mayor Abe Beame, who was bemoaning the fact that Medicaid spending was out of control and seeking to use city resources to combat fraud to stop it.  The state had no interest in doing so, Beame said, because it could simply force the city to pay.

When asked at the end of the1974 season why he was replacing his general manager, the owner of the Houston Oilers football team replied “I gave him an unlimited budget, and he exceeded it!”  The same may be said of New York State’s Medicaid program.  Its budget is unlimited – its cost goes up by whatever it does every year, and taxes are raised and other services cut to make up the difference. Medicaid, along with debt service and pensions, get the first, second and third bites of the apple.  (Public schools in the portion of New York State outside New York City get the fourth.)  And when the cost of Medicaid is restrained, as in the mid-to-late 1990s, it is by reducing the number of beneficiaries who receive health care benefits, not by restraining the increase in what the health care industry decides to charge.  The number of people employed by that industry in New York, fueled in large part by government money, rises rapidly each and every year.  With just 6.5% of the nation’s population, New York State accounted for 15.1% of its Medicaid spending (see attached spreadsheet).

How much more would the federal government have to spend on health care to provide universal health insurance?  How much more would New York State have to provide in state education funding to provide every New York City child with a qualified teacher and an a national average class size?  How much more would the MTA have to borrow to build long promised improvements such as the Second Avenue Subway?  Now imagine you were asking these questions in the early 1990s, when former President Clinton held up a card and promised universal heath care and the Pataki, Silver and Bruno era began in Albany.  What numbers have you arrived at?  Chances are, that much and more has been borrowed and spent since.  But like a football held by Lucy Van Pelt, these benefits have been pulled away at the last moment, and the money has gone elsewhere.

You may have heard that New Jersey Governor John Corzine has called a special session of the New Jersey State legislature to tackle the “intractable” issue of high New Jersey property taxes.  He plans to reduce pensions and benefits for new employees, to offset the cost of the pension enrichment for those cashing in and moving out, and borrowing against the pension funds, passed during the Whitman Administration.  He plans to try to entice, or force, New Jersey’s high-spending school districts to consolidate to cut costs.  And, he plans to raise other taxes, perhaps at the state level, to offset a property tax decline.  Those are tough stands. Compared with the next Governor of New York, however, the fact is Corzine has it easy.

In several past posts, and in several future posts, I’ve discussed the winners, those categories of services and people who get far more public funding here than the national average, in some cases more than in anywhere else in the United States.  But despite state and local taxes that were 43% higher than the national average in FY 2004, relative to personal income, and lots of fee income besides, taxpayers are not the only losers in New York City.

Spending on the city’s public schools has been below national average as a share of income, often far below, as far back as the data goes.  Parks, recreation and culture had been above the national average until1989, Ed Koch’s last year in office.  It has been far below average ever since, despite lots of private donations.  Major transportation projects are proposed and planned, but never built here.  Yesterday, the Daily News reported that the city’s libraries are rarely open.  http://www.nydailynews.com/front/story/441273p-371556c.html.  No surprise there.

As I recall from high school Latin, “scrute” is trash, and the word scrutinize, from which it is derived, means to pick through the trash.  Using data from the Governments Division of the Census Bureau, and the New York State and U.S. Departments of Labor, this essay will pick through the trash at the NYC Department of Sanitation to find out what kind of deal we are getting.  That isn’t as easy as for, say, schools and policing, which are provided in every locality, because not everyone has public trash collection.  But I did the best I can, and from what I can see, our deal stinks.

It’s over 90 degrees as I sit here, and I’m thinking about energy, the environment, and leadership.  If you read my prior post on the subject, you know that I believe leaders are those who can convince people to cooperate toward a common goal, trusting that their goodwill will not be abused by those who are just out for themselves.  I said there was no leadership on energy.

We don’t have air conditioning because in this climate, unless you have it and become dependent on it, you only really miss it a few days a year a few years a decade.  And on those days, you are begged not to use it.  With energy scarce and the environment only capable of holding so much carbon, with with so many billions living in multiple dwellings without cross ventilation, with so many people who are old and without health problems, I’ve decided air conditioning is one amenity we can live without.  But somewhere in the west, I’m sure Dick Cheney, who considers conservation a “personal virtue,” has an air conditioned dog house.