Author: Larry Littlefield

Congestion: You Can Fee Me Now or Fine Me Later

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Not wanting to devalue their on-street parking permits, but not wanting to be accused of doing nothing, it is clear that the State Legislature is looking for a congestion pricing alternative. But the only alternative to rationing street space by price is rationing by queue; congestion will rise to the point where there are no more people who can stand it, and the rest will either use other means to travel or relocate themselves (and their businesses?) elsewhere. Once the state has decided that the only acceptable limit to congestion is congestion itself, and thus the city has no choice but to live with it, however, taking away street space, and taking other measures to reduce traffic flow, will become reasonable. Such measures wouldn’t make congestion worse, because congestion would simply be as bad at it is going to be anyway. The only difference is that the general public would get the benefit of alternative uses of the street. And how about the revenue that congestion pricing would bring? With space that tight, it becomes impossible to avoid committing traffic infractions such as blocking the box, impeding emergency vehicles, and getting stuck in bus lanes. Ruthless enforcement (you decided to drive here and didn’t want to pay? Tough!) could bring in the cash in fines, rather than fees. Indeed according to a Daily News article last week, when it comes to scarce “free” on-street parking spaces in my neighborhood, this is already happening.

Another Shot in the Generational War

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In case you missed it, Gotham Gazette posted an excellent article on the average earnings of workers in their 20s, both in New York City and nationally, over time here. The data show that workers in their 20s today, particularly men, even college graduates (of which there are more), earn less in cash income than they once did, both in New York City and nationally. The situation for non-cash income is even worse. As a result of two tier union contracts and other two-tier personnel policies, my generation was the first to not receive defined benefit pensions. But young people today are unlikely to even receive health insurance, as businesses increasingly hire them as “independent contractors” to deny health insurance to them while providing it to existing employees from prior generations. To this, add the higher student loan amounts today’s graduates are burdened by, generated in part by excessive cost inflation in higher education (which presumably provides more income for more people). Forget the fear that the next generation will not be as well off; it has already happened. And public policies, attentive to the wants of senior citizens to the virtual exclusion of all else, particularly in New York State, pile debts and other burdens on to the future, for those 20-somthings to someday pay. In yet another shot in the generational war, state and local governments are refusing to allow people to know how large those burdens will be.

A Good Idea from an Unexpected Place

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New York’s MTA recently announced, to great acclaim, that it would “save the fare” for another year, continuing a political game that has gone on as long as there has been a subway system in New York. The long-term results of that game have been terrible. To prevent increases, money has been borrowed and maintenance deferred, until a crisis point is reached and the fare goes up anyway – by a massive amount, generally in a recession when people can least afford it. In the city’s history the typical fare increases have been 20%, 25%, 33%, 50%, even 100% (from five cents to ten cents). It is only during the 1984 to 1994 period that somewhat smaller increases – of 11% or less – were the norm. Deferred fare increases have been paid back with interest, one reason the pay-per-ride subway fare has in the end risen faster than inflation – by 45% from 1904 to today in real dollars. (see attached chart). Think about it – all those populist heroes defending the working people and middle class by fighting fare increases over all the years delivered a 45% increase in the cost of a subway ride adjusted for inflation over a century! There really is a sucker born every minute. In contrast U.S. postage stamps and inflation have gone up by about the same amount over the past century. Postage stamp increases have been smaller, with the latest at just two cents (5.1%), but more frequent – and generally not subject to grandstanding my members of Congress. In New York the game goes on, but according to the blog DCist, a transit board member in of all places Washington D.C. has proposed ending the game there once and for all.

A Fashionistas’ City Budget

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Readers of this site may be interested to find out what life is like in New York City, as told to the rest of the country by the Associated Press. “Allison Weiss Brady, 36, a venture capitalist and philanthropist who is on the board of her family foundation, said she likes to be practical when buying handbags preferring to buy bags in basic colors. Still, she spends $20,000 per season on accessories and typically spends $5,000 per bag, much more than the $2,000 she used to spend a few years ago…Nadine Absolam, a 32-year-old Brooklyn resident, says she likes to have the trendiest designer items, but she said it's getting harder to come up with the cash. ‘My first priority should be my bills. But these designers bring out so many hot items that you must have these things,’ said the Pilates instructor. ‘I am always late with my bills.’ Absolam spends about $1,000 in clothing and accessories per month, about half of her monthly salary.” The Mayor and City Council hear your pain ladies. Among all the public priorities in this over-taxed, debt-ridden city and state, they decided an elimination of the city’s tax on clothing was one of them.

Before resuming my diatribe, let me say there is much to like in the city budget.

School Finance: What Should Be Done About It

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The current state policy, which the State Senate seems want to push farther and farther, is to provide more state education funding to school districts that spend the most money, New York City excluded, and then to make New York City pay for it through back door “tax relief” aid for everyone else. No accountability is expected for the added funds. My solution, as I’ve stated in the past, is to have a cap on spending per student at 25 to 33 percent above the national average (adjusted for the cost of living). Not a cap on the increase, keeping existing spending differences in spending as they are forever, as certain cynical, selfish, nasty, dishonest, greedy, immoral, unethical people have often proposed. A cap on the total. Below that cap, no school budget referendums would not be required. Above the cap, one dollar of state education funding would be taken away for each dollar in excess.

State Income Taxes: We’re Paying More But Not Getting More Education Aid

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I didn’t notice until now, but new data from the New York State Department of Taxation of Finance was released in May for the share of New York State income taxes accounted for by each county. And while for older data I rely on the New York State Statistical Yearbook, which wasn’t published every year, it appears that the 41.3% of income taxes paid by full-time state residents that were paid by New York City residents in 2004 is the most since the early 1970s. The data can be found here. New York City residents accounted for $8.9 billion of the $21.6 billion in state income tax receipts paid by full time residents that year, or 41.3% of the total. Moreover, as New Jersey and Connecticut residents account for $2.8 billion of the $3.8 billion in state income taxes paid by non-residents, I doubt the majority of those non-residents worked in Watertown. Getting back to full-time residents, New York City residents accounted for 40.2% of the returns, 40.7% of the income, and 41.3% of the taxes. The city’s share of the population was somewhat higher, since it has a much higher poverty rate than the rest of the state, and thus presumably more people not filing returns.

School Spending Per Student by Category and School District: Please Enlighten Me

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As promised, I have attached a spreadsheet with FY 2005 per-child spending by category (instructional wages and salaries, operation and maintenance of plant, etc.) for every school district in the state. In high-cost downstate New York, the figures have been adjusted downward to account for higher wages and costs here – those which received adjustments are identified by an asterisk. The spreadsheet also includes the original data downloaded from the U.S. Census Bureau that I used for the per-capita figures; the census data includes even more detailed categories I chose not to break out. The data, aside from the big city school districts, is sorted by county (in alphabetical order from Albany to Wyoming) followed by school district name. Although my knowledge of the rest of the state is probably greater than the average Brooklyn resident, I have elected to provide the data without comment. While I’m not sure how many people from outside the city read this blog, if you do please look up the data for your school district and let me know what you think of it. Why are things the way they are? Unfortunately, this data came out after the school budget votes this year. But that means this will be the most recent data available when the budgets come up again next year.

Non-Instructional Public School Spending: Low in NYC, Sky-High Elsewhere in NY State

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For years, pundits inside the city and out have demanded that New York City reduce its high level of wasteful spending outside the classroom, with some asserting that if only New York City’s non-instructional spending were at typical levels it would have plenty of money for teaching. There was perhaps no greater falsehood ever spread in the city’s fiscal debates. Instead, it is the rest of New York State that stands out in its sky-high non-instructional spending relative to the national average, while New York City has always been low. In fiscal 2005, non-instructional spending totaled $3,423 per student in New York City, or $2,554 if the cost of living is adjusted for, well below the national average of $3,400. The Downstate Suburbs (also adjusted for living costs), Upstate New York, and New Jersey (adjusted as well) far exceeded national average at $4,221, $4,350, and $4,449 respectively. The U.S. Census Bureau data on expenditures per pupil may be found in the spreadsheet attached to my previous post here http://www.r8ny.com/blog/larry_littlefield/per_student_revenues_and_expenditures_in_fy_2002_and_fy_2005_a_little_good_news_and_lot_of_bad_news_for_n . A more detailed discussion, including a discussion of changes from FY 2002 to FY 2005, follows.

Per Student Revenues and Expenditures in FY 2002 and FY 2005: A Little Good News and Lot of Bad News for NYC

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Through the 1990s, New York City’s per student public school revenues and expenditures were below the national average if adjusted for the cost of living using the modest method I prefer (see the end of the prior post). In Fiscal 2002, however, NYC’s spending per student was $10,882 in cost of living-adjusted $2005, above the national average of $10,084. Unfortunately, the city’s public school revenues per student were only $9,435 at the time, well below the national average of $9,879, as the city borrowed with abandon and kept taxes low during former Mayor Giuliani’s second term. With Mayor Bloomberg making education a top priority, by FY2005 an additional breakthrough had occurred as the city’s revenues per student, adjusted for the cost of living, reached $11,564 that year, above the national average of $10,339. That, I suppose is good news. Almost everything else I discovered about changes between FY 2002 and FY 2005, however, is bad news, with much of it based on decisions made before FY 2002, or subsequently by former Governor Pataki and the New York State legislature. Through FY 2005 Mayor Bloomberg’s fiscal imprint was, in reality modest.

NYC Public Education Finance: The Streak Continues

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In FY 2002, thanks to 2.5% inflation-adjusted decline in the personal income of New York City residents according to the latest estimates from the Bureau of Economic Analysis, New York City’s elementary and secondary public school spending rose to 4.57% of that personal income, within rounding error of the U.S. average of 4.63%. I thought, and not for the first time, that the city’s public school spending might actually exceed the national average as a share of income in some subsequent year. But it was not to be. As in the early 1990s, government budget reductions lagged the reduction in the tax base, but once they kicked in and personal income began to recover, the city’s public school spending fell as a share of personal income. As I showed earlier based on another data source, the city’s share of state education funding (direct and back-door funding under programs like STAR) was also cut. Meanwhile, spending in the rest of the state stayed at sky-high levels relative to personal income. In fiscal 2005, New York City’s elementary and secondary public school spending had fallen to 4.28% of city residents’ personal income, 7.5% below the national average and 33.7% below the average for the rest of New York State.