Author: Larry Littlefield

As I showed in the spreadsheet attached to this post, the State of New York spent $35.02 on Medical Vendor Payments for each $1,000 in income of state residents in FY 2007, compared with a national average of $23.02, and $4.97 per $1,000 of personal income on state Public Hospitals compared with a national average of $4.00. Much of that was paid for through the Medicaid program, as was the $7.64 per $1,000 of personal income spent by New York’s local governments on Public Hospitals and Medical Vendor Payments combined, compared with a national average of $6.28. With Medicaid a state government rather than local government function in New York, and in most of the country, this post extends my overview of state government finances with a specific analysis of Medicaid spending by state in 2008.

Most of the data in the attached spreadsheet is from the Medicaid Statistical Information System (MSIS), generously tabulated for me by one of its staff members since its Datamart program no longer works on my home computer, now that I have an I-Mac rather than a PC. The data do not include Hawaii and Utah, because they had not completed their submissions as of the date of this tabulation. The data show that New York State spent $45.30 in total Medicaid payments (to public and private providers) per $1,000 of state residents’ personal income in FY 2008, far above the average of $24.34 for 48 states plus the District of Columbia, or the $22.83 for the adjacent states combined – New Jersey, Pennsylvania, Massachusetts, Connecticut, and Vermont. Only New Mexico spent more on Medicaid as a share of its residents’ income at $46.11, mostly because the income of that state’s residents is so low. In addition to spending more, New York covered a higher share of its spending in state and local taxes. For regular Medicaid (not categories with an enhanced federal match), the federal government covers 57 percent of Medicaid costs on average but just 50 percent in New York (as well as New Jersey, Connecticut, and Massachusetts). The regular federal matching share in New Mexico is 71 percent. A discussion of where New York spends more follows.

This post will compare trends in state government finance for the State of New York and the U.S. total for all states for FY 1972 to FY 2007. The data is in the spreadsheet attached to the previous post, a post contains background information on how it was compiled and what it means. Overall, the data shows that New York’s state and local tax burden is about at the level it had been decades earlier, but spending has shifted. A cut in taxes during the 2000s was not associated with falling spending, but rather with rising debt and deferred pension costs. Rising pension contributions and health care spending, particularly for senior citizens, are crowding out other public services and benefits, a situation that likely became worse following FY 2007. Without low interest rates, the state’s situation would be much more severe. Direct state spending on Parks, Natural Resources and Highways, in particular, is down from what it had been and well below the national average. (Public Transit will be discussed under local government). New York’s state education aid was above the U.S. average in FY1972 and, after a significant increase, FY 2007, but it had been below average in FY 1987 and FY 2000. New York’s state spending on public higher education is somewhat higher than it had been, but remains well below the U.S. average.

Every five years, the U.S. Census Bureau conducts a Census of Governments to record the organization, employment, and finances of every state and local government in the country. The most recent census year was 2007. The organization and employment phases of that effort have long since been completed, but staff turnover, budget cuts, and diminished cooperation from state and local governments (not ours) have delayed the release of financial data until recently. For the past few weeks, I’ve been working to put the detailed data, downloaded from the Bureau, into a format that makes possible a fair comparison between places for the state and local government tax burden (by type of tax), level of spending (by government function), and level of debt. Many adjustments are needed to make such a comparison possible, given differences in population and average income, the varying organization of local government, and variations in the division of responsibility between the state and local level. This post describes the origin of the data, issues in presenting it, and modifications made to it. Multiple posts will follow over the next month or two with the findings. Those interested should read it to understand what it is they will be seeing, and what it means.

The attached spreadsheet contains three worksheets with data on state government, for New York State, the U.S., and a handful of states I have chose for comparison: New Jersey, Connecticut, Massachusetts, California, Illinois, North Carolina, and Texas. As well as providing background, in this post and another to follow I’ll describe how the State of New York compared with other state governments. Before reading the rest of this post, I suggest opening the spreadsheet, and printing the tables in the “Summary 2007” and “NY & U.S. 1972 to 2007” worksheets; each will print on two pages.

"Gov. Arnold Schwarzenegger, the state controller and treasurer decided Monday to delay $2.9 billion a month in payments to school districts and counties sooner than expected so the state can meet debt and pension obligations." That's right, they are not paying for schools, not paying for health care, not paying for transportation, not paying for help for the poor in the worst recession in 80 years. But they are paying the retroactively enhanced pensions, and the debts run up by a generation of tax cutting spenders. And the federal government just voted to help reduce the level of public school layoffs caused by the soaring cost of teacher pensions by increasing school subsidies, and offset it by cutting food stamps.

That isn’t what the term limits report said directly. But that would remain the reality under the commission’s proposals (or more accurately lack thereof), with the one restriction that members of the City Council could not eliminate or extend term limits for themselves. They could only do so, and then resign before their last term was up, and have their spouse, child, or flunky selected in a special election no one knows about. As in the state legislature.

The need for a referendum to change the charter, or at least portions of the charter for which the politicians have a conflict of interest, is one thing I thought any decent group of people would propose. But they haven’t, and there is no explanation as to why, although the report does mention that having he Council overturn a referendum without another one is something many objected to. Not only could the City Council eliminate term limits, but it could also eliminate initiative and referendum. This stunning omission has gone without comment. BTW, to change the NY state constitution requires the assent of two consecutive state legislative terms AND a referendum. If the City Council can just change the charter, why does it exist, since it is no more difficult to change than any ordinance?

That is what the opponents of the proposed “Ground Zero” mosque should be asked, with an answer demanded. Because the “Ground Zero” mosque isn’t at Ground Zero, it is at a nearby site the people who want to build it happen to own. It may or may not be possible for those who seek to build Park 51 to acquire an alternative site in the vicinity of the Lower Manhattan population they seek to serve, particularly since anyone who would sell to them at this point might end up demonized as well. And the Governor’s proposal — to hand over state land to a religious institution — is just as unconstitutional as having the state ban new mosques.

Even if they were successful in purchasing an alternative site while not losing their shirt on the old one, however, the fun could begin anew. “Terrorists” could be accused of planting a “trophy” in an area that was part of the “frozen zone” most affected by the attacks that day. What was that, south of 14th Street? South of Canal Street? South of Chambers Street? West of Broadway? As you recall, it shrank over time. Or building in the very area where the death dust fell, including much of Brooklyn. Or of planting their “trophy” in the very city that was attacked. Or in the metropolitan area where most of the victims lived. Etc. Who would dare to do this, or allow this? Are you in favor?

Mr. Skurnick has pointed out that the proposed language in the charter text amendment concerning signature requirements in the draft report is different than what was described in the executive summary, which I read before writing the post below. Hopefully, the language in draft text, not in the executive summary, is what is intended to be done. The executive summary is confusing, and should be modified, if the intent is make the number of signatures required for independent candidates the same as for party primaries. The executive summary language is below.

As some readers might recall, I wrote a series of posts based on a model of how much the pensions initially promised to New York’s public employees should have cost, how much they were underfunded based on excessive investment return assumptions, and how much some of the major pension enhancements (among the dozens) of the past 15 years and pension spiking have added to the cost. I found that most of New York’s public employees were promised pensions that, properly funded, would have cost 11.8% of their pay, with 8.8% paid by taxpayers and 3.0% by the employees themselves. For those in physically demanding jobs, the total cost would have been 16.2% of pay, with 13.2% paid by taxpayers; for police and fire it was 29.6% almost all paid by taxpayers. Subsequent deals and pension spiking have (just deals I’m aware of) more than doubled the expected taxpayer cost of pensions for teachers and those benefit from the “traditional pension incentives” repeatedly offered, while also drastically increasing the cost for workers in other categories.

Let’s say, however, that you are not a person who is in a position to live decades without contributing any thing to anyone else, and force other people who are worse off to pay for it, the way the public employee unions and politicians have? What does the model say about your retirement, assuming retirement for you will mean what it has generally meant historically – a few years of leisure at the end of a long working life? To answer that question, I have added a “reasonable” retirement scenario to the model, and find that you had better be saving 10.0% of your salary or more, assuming you are paying for your entire retirement yourself (or almost all of it).

That's what he said, but it isn't true. He had no trouble saying no when he wanted to, unlike his members who are required to say yes. What he said yes to is what he has done. Silver's supporters have been given taken the highest state and local tax burden as a share of personal income in the U.S., and have provided less in return, mostly by diverting resources to those who do not work. Yes the Republicans and their contractor and Wall Street backers got their piece and their tax breaks too. And to keep the serfs from objecting, most of the cost was pushed off to a future none of them cared about to be inhabited by people none of them care about either.  We will pay more and more, and get less and less, as the beneficiaries die or leave for Florida with the difference.

Pataki and Bruno are gone, Thank God, but their damage lives on. Silver's still increases.  There were no dictators.  Silver and his backers got their piece of our hides.

Frankly, I don't think it has anything to do with how his policies have affected or will affect business, although that is what has been and will be claimed. A rationalization. I believe it is because he has raised the issue of executive pay and appointed a "Pay Tzar" to question it. Which is the equivalent of a governor appointing a "Pension Tzar," and drawing an open comparison between the deals public employee unions have grabbed in the past 15 years and the situation of everyone else. So should Obama back off?