Equity and Eligibility

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Enough of the preliminary facts; let’s move on to principles. A public sidewalk is the sort of thing that many people think of when they think of the government. It is the common property of everyone in the community, and everyone in the community, regardless of who they are and where they are from, has an equal right to walk down it. On a public sidewalk, everyone is equal. Most public services, however, are not like a public sidewalk. Less than 20 percent of all public spending – federal, state and local — is on services that everyone can experience, or have an equal right to experience, on any given day. Even adding in the military, space research, legislators and other central administrators, categories of government that do not benefit people directly but, one might argue, benefit all people indirectly to an equal extent, “general” services still account for just one third of all public expenditures. Debts and pension payments, for which no public services are received, accounting for about one-sixth. About half of all public spending goes only to those who are eligible to receive services and benefits, based on criteria, rules, regulations, and applications accepted and denied. The next three weeks of posts will be a review of public benefits and services that aren’t available to everyone, and of the fairness of the philosophical foundation and practical criteria that are used to determine who does and does not get them. Read them all, and I personally guarantee you’ll never think about any public policy issue the same way again.

HOW IS GOVERNMENT PAID FOR?

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In the discussion of public expenditures, it was shown that the unit of government that directly provides a public service or benefit isn’t necessarily the unit of government that pays for it. In this section, the overall structure of funding of government revenues will be discussed in detail. One finds nationally that local governments, which are responsible for a very large share of the direct provision of public services, pay for relatively little of this in local taxes. Fees for services, fines for misbehavior, and aid from higher levels of governments account for the majority. And many local government services are not only funded by state governments, or federal aid passing through state governments, but are provided under rules set by state governments. Under our federal system, the federal government collects most of the money, and local governments do most of the work, but it is the state governments that actually make most of the decisions on the margin. Here in New York City, there is an important difference. Local taxes pay for 60 percent of the city’s spending, even though that spending includes services and benefits, particularly public assistance and a Medicaid, that are state functions just about everywhere else. Still, the rest of the state in many ways controls the city’s budget.

Stonewalling in Albany

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For some reason, the NY Post has not reported one word about this Albany figure not releasing information. Isn’t anybody curious about why Joe Bruno won’t release this?

Earlier this week, a Bruno aide turned down a Freedom of Information request from Gannett News Service for copies of the senator's e-mail correspondence with political advisers and for a schedule of all the trips Bruno took to New York City this year.

The information gathered by the Spitzer aides related to Bruno's use of state resources to travel to New York City, where he attended political functions as well as government-related meetings.

WHO PROVIDES PUBLIC SERVICES?

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As the discussion of inducements and requirements shows, not all government-directed activities are, in fact, undertaken by the federal, state, and local governments themselves. Of the $2,819 billion directly spent by all three levels of government in 1995, only $593 billion was spent on public employee wages and salaries, about 21 percent of the total. Another $40 billion was spent on public pension contributions for these employees, perhaps a similar amount was spent on other employee benefits such as health insurance, and more was spent on the buildings these employees occupied and the supplies they used at work. Even so, it is apparent that work done by public employees is just part of the range of government-directed activities. In fact, while total direct government spending equaled $2.8 trillion, more than one-third of the 1995 total GDP of $7.4 trillion, the work actually done by governments accounted for just under $1.0 trillion in the national income accounts, or about 13.3 percent of total GDP. Similarly, public employees accounted for just 21.6 million of the 149 million jobs in the U.S. that year, or about 14.5 percent.

WHAT THE GOVERNMENT DOES: INDUCEMENTS, RESTRICTIONS AND CONTROLS

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Government expenditures, the subject of my prior posts, are not the extent of government activity. Instead of doing something itself, the government often uses inducements, restrictions and controls to influence – or force – private organizations or individuals to do it, or not do it, instead. Such inducements and requirements impose costs, but do not require the collection of taxes (except for enforcement), so they are in that sense “off the books.” That doesn’t mean, however, that the costs aren’t real. The possibility of using inducements and controls as a substitute for public revenues and expenditures is central to the developing health care debate. Rather than having the government collect taxes and fund health care for working age adults, Massachusetts has decided to try to force individuals and businesses to spend more of their own money on health care, a policy that from a budget perspective is “free.”

Report on Petition Challenges

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The New York City Board of Elections has (almost) finished the hearings on petition challenges for this year’s Primaries.

And it looks like a quiet year will be even quieter.

In a previous post I reported that the only Primary contests for public office were for 5 judicial positions.

In the a race for a Brooklyn Countywide Civil Court spot, candidate Fred Arriaga, counsel to the Borough President, successfully challenged the petitions of opponent Pia Wood, who fell short by about 800 signatures.

In Brooklyn’s 6th district, where 3 candidates filed petitions, Sharen Hudson removed one opponent – Daniel McCullough, who is 250 signatures short. Hudson’s only opponent is Katherine Levine.

WHAT THE GOVERNMENT DOES: AGE, MEANS AND NEEDS

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While my prior post organized public expenditures by category of public service, there is another way to look at it – by basis of eligibility. As the data in the prior post showed, only about 20% of public spending went for general services for everyone, with most of the rest either payments for the past (interest, pensions) or services and benefits with eligibility limitations. The most common limitations are based, at least in theory if not always in practice, on age, means (the amount of money one has or earns), needs (disability), or some combination of these. Spending by basis of eligibility is analyzed, using a variety of data from the 2001 Statistical Abstract, in the attached spreadsheet. Unlike the 1995 data previously prevented, this table is a hodgepodge and must therefore be thought of as a rough estimate. The tabulation finds that programs with eligibility limited by age, means and need accounted for about half of all government expenditures in 1998, with age-restricted benefits accounting for the vast majority.

Rudy’s Old Adoption Lie

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Monday’s Daily News is reporting that Rudy Giuliani is about to once again try to fool pro-life voters by claiming that he made increasing adoptions a priority of his Mayoral administration.

At the same time, he boosted adoptions in his eight years by some 133%, as compared with the eight years before he arrived, city statistics show.

Rudy has used many different numbers to try to show that adoptions increased by big numbers during his time as Mayor and these are new ones to me.

WHAT THE GOVERNMENT DOES: SPENDING

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My overview of government activities begins with an overview of public spending, by category, at the federal, state and local level, with data in the attached spreadsheet. The key point here is that much of what the government spends money on most working taxpayers never see. National defense. Interest and pensions. Income and health care for senior citizens. Education for children. And, to a lesser extent, income and health care for the poor, disabled and unemployed. Most of the remaining services that working age adults do see, protection services like police and fire departments, infrastructure and amenities such as roads, transit systems, parks and libraries, water and sewer systems and local trash collection – are provided by local governments. The only federal organization that regularly provides services direct to all of the American people is the Post Office.