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New York Area Transit Finance Trends: 2007 to 2012

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In my prior post, I examined the cost of MTA and other New York metro area transit services in 2012. In this post, I’ll examine the trends in those costs during the 2007 to 2012 period, a time when most Americans and most New Yorkers were struggling with the Great Recession and its aftermath.

The data shows that while private sector workers have struggled, with wage gains below inflation, transit costs have soared far in excess of inflation. The result has been fare increases, service cuts, and increases in subsidies. Based on other information I have compiled for other public services, the cost of retired transit workers probably accounts for the majority of the rising burden on taxpayers and transit riders, as shown by operating costs (the soaring cost of debt service is another factor related to the capital plan). As transit workers demand even more, it is worth reviewing how much the transit systems have already taken. Commentary and a series of charts may be found on “Saying the Unsaid in New York.”

New York Area Transit Finance: An Analysis of Data from the National Transit Database for 2012

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Another real estate bubble is underway, thanks to low interest rates, and the MTA’s real estate-related taxes are temporarily up as well. And as has been the case for 20 years, everyone related to state and local government wants to grab money from the MTA’s future – a future that includes an almost completely unfunded capital plan, starting next year, that would consist mostly of ongoing normal replacement.

Even so, the Transit Workers Union wants raises for past years, over and above the 8 percent increase they got in the recession. The Long Island Railroad unions are threatening to strike. The contractors and their unions are turning East Side Access into a perpetual bonanza. Staten Island wants more special deals to pay lower tolls, and the suburbs want more special deals to pay less in dedicated MTA payroll taxes. The Governor has taken some of those dedicated taxes, only collected in Downstate New York, for the state’s general fund, to be spent in Upstate New York. The MTA recently announced lower fare increases. And everyone thinks its fine because the MTA could always just borrow more and more and more. While Generation Greed continues to do what it does, I have compiled some facts about the financial transit situation based on the Federal Transit Administration’s National Transit Database. Those facts are discussed in the next two posts, on “Saying the Unsaid in New York,” where spreadsheets can be attached and charts inserted.

The Reality of Journalism Today

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The New York Post reports, without checking if it is true or thinking about it much, that Park Slope is the most adulterous neighborhood in the city. "Park Slope, Gramercy Park and Tribeca are the top Big Apple neighborhoods for cheaters, according to the adultery-promoting matchmakers at AshleyMadison.com. The site claims it has 840,300 members in the five boroughs, Long Island and southern Westchester County. Park Slope in Brooklyn has 10 percent of the local unfaithful, according to the Web site." This news was picked up by a blog. “A couple summers ago, we had some fun at author Amy Sohn’s expense, after she wrote a rather tame article about how all of her Park Slope friends were sluts and dope addicts, despite a lack of much sex or drugs. But, if the New York Post, is to be believed, Park Slope really is full of slutty spouses, because the neighborhood leads New York in most members registered to married person affair website Ashley Madison."

Ten percent of 840,030 is 84,000. The population of Park Slope is about 84,000. Including the infants.

Now year after year I put up numbers, which happen to be true, that often fly in the face of at least some of what the MSM and various political actors have to say about our city and state, but no one is interested. It is pretty clear that journalism today is about what people are interested in, and the facts don't get in the way of of a good story.

We’re Going To Find Out What “Progressive” Means Today

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In preparation for the release of the employment phase of the 2012 Census of Governments, I downloaded some Employment and Wages data from the Bureau of Labor Statistics last weekend. According to the data, if one excludes the high-paid Finance and Insurance sector the average annual pay per private sector worker increased 6.1% in Downstate New York from 2008 to 2012. The inflation rate for the period was 6.6%, meaning that in “real” dollars average annual pay fell. This confirms the American Community Survey data I cited earlier in this post, showing most New Yorkers have gotten poorer. For the same period, most unionized city workers received 8.0% wage increases, and those represented by the United Federation of Teachers received a retroactive pension increase that, for those who benefitted, was worth far more. And yet they want even more money for those years, at the expense of those unrepresented people who would have to pay for it. 

So we are going to find out what being a “progressive” means today. The original progressives, a century ago, were against the abuse of ordinary people and the common future by those who had gained concentrated power in our institutions. Not only the corporate “trusts” busted by Teddy Roosevelt, but also the political machines with their patronage workers providing poor services. Progressive Democrats wanted more fair and effective government so it could do more things. Progressive Republicans wanted more fair and efficient government so it could do the things it must do at a lower cost. Back then progressives weren’t people who thought that instead of having just some people get ahead of others at their expense by manipulating the business world, additional people should be able to get ahead of others at their expense by manipulating state and local government. That was Tammany Hall. The public employee unions, contractor organizations, and unions representing workers employed by contractors, have taken its place. And if there are any reductions in public services, and any tax increases that don’t go exclusively to additional services, and/or any increases in public compensation beyond what most other New Yorkers are receiving, what was once machine politics will now be “progressivism.” That will be true even in another recession. Additional commentary, and a spreadsheet, can be found on “Saying the Unsaid in New York.”

Bloomberg Mortgaged the City’s Future With the 2008 UFT Pension Deal Not Labor Contracts

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Mayor Bill DeBlasio accused Mayor Bloomberg of mortgaging the city’s future by not paying its unionized employees more money before he got there. But that is not so. Did Mayor Bloomberg not settle the contracts so he could cut taxes? No, Mayor Bloomberg increased taxes, including an 18.0% property tax increase that we were promised would go to better schools. Schools that Bill DeBlasio and ever other candidate for Mayor except Christine Quinn said were not better, despite a big increase in per student spending. Sales taxes were increased. State income taxes were increased. Did Mayor Bloomberg not settle the contracts so he could reduce fees? No, fees were increased. Did Mayor Bloomberg not settle the contracts so he could hire more public employees and increase services? No, because the number of public employees has gone down.

So where did all that money that should be already be going to unionized public employees, according to Mayor DeBlaiso, actually go? You know where.

New York City and Wall Street: Saved by Cheap Money So Far

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Perhaps you heard about the drop in the stock market and the growing financial crisis in emerging markets last week. Basically U.S. businesses and the global economy are so addicted to Americans spending more than they can afford (which is to say more than businesses are paying them) that they can’t cope with the Federal Reserve raising interest rates to zero. Which in effect is what is happening by having the Fed taper off the latest round of “quantitative easing.”

The emerging markets are most affected thus far, but sooner or later Wall Street will be affected as well. Most New Yorkers won’t notice, because the NYC job base has been broadening and is less dependent on finance than 20 years ago. But the NYC and NY State tax base are more dependent on taxes on the undeserved profits in that industry, and the undeserved pay packages of those who work there. Which makes this Marketwatch.com article worth a read. “In a 2013 study, McKinsey Global Institute found that between 2007 and 2012, interest rate and QE policies resulted in a net transfer to U.S. financial companies of $150 billion from households, pension funds, insurers and foreign investors.” And the interest rate margin on cheap Federal Reserve money amounts to 60 to 130 percent of last year’s profits on the country’s biggest banks. “The analysis highlights how a focus on earnings changes without regard for true earnings potential can be misguided.”

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