Why do I get the feeling that when it comes to comparative local government spending by category, as shown in one of the spreadsheets attached to this post, I’ve been writing the same thing over and over again for more than 15 years? Some things have changed, to be sure, but the general patterns remain in place. New York City’s local taxes are higher than average primarily due to higher spending on Medicaid and social services; police and correction, interest on debts, and pensions and public employee health care. Mass transit also soaks up a lot of non-fare revenues here, though the savings from New Yorkers being able to have fewer private automobiles offsets this. Spending in other categories is often low, though in the case of public education it is much higher, relative to the national average, than it used to be.
The last time people really paid attention to public finance issues was the early 1990s. Then, most the blame for the problems of the time was assigned to the poor, minorities, immigrants, and those living in older central cities and getting by on welfare. Those grasping for money now should never be allowed to forget this, because by that time cash welfare had already ceased to be a major factor in the city and state budget, despite one million people on public assistance. Today it amounts to virtually nothing even in New York City — $1.2 billion in spending funded by all sources or 0.3% of the income of New York City residents, down from $1.9 billion (or $6.4 billion in $2006) or 1.4% of income in FY 1977. Well, that 84% inflation-adjusted decline is one real change. So where is the money going now? For the most part the same places it did in FY 2005, in FY 2004, in the last Census of Governments year in FY 2002, and in the previous one in FY1997.