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.
The Latest
NYC Public Education Finance: The Streak Continues
|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.
NYC Public Education Finance: The Streak Continues
|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.
Liu, Carson & Koreans
|Am I the only person who thinks there is something a little wrong about Councilman John Liu voting in favor of naming a street for Sonny Carson?
After all Liu represents the largest Korean community in New York and Carson led the infamous boycott of Korean groceries in Brooklyn.
Attachment Working: Salute to Bureaucrats & Webmasters
|The attachment program is working again, so I am attaching spreadsheets based on 2005 public finance data from the U.S. Census Bureau and personal income data from the Bureau of Economic Analysis. Since this is not a census of governments year, the Bureau’s data is based on a limited survey, and state and local finance estimates are provided at the state level only. Downloading individual unit data for the City of New York and the Port Authority of NY and NJ, the only units of local government in New York City, however, I have compiled data for both New York City and (by subtraction) the rest of New York State. Once again, for reasons I explained here http://www.r8ny.com/blog/larry_littlefield/bureau_of_economic_analysis_data_pay_per_worker_and_its_public_policy_implications.html , in general revenues and expenditures are most comparable when expressed as a share of personal income. The spreadsheets contain the information as downloaded, and you can see what I did with it.
Attachment Working: Salute to Bureaucrats & Webmasters
|The attachment program is working again, so I am attaching spreadsheets based on 2005 public finance data from the U.S. Census Bureau and personal income data from the Bureau of Economic Analysis. Since this is not a census of governments year, the Bureau’s data is based on a limited survey, and state and local finance estimates are provided at the state level only. Downloading individual unit data for the City of New York and the Port Authority of NY and NJ, the only units of local government in New York City, however, I have compiled data for both New York City and (by subtraction) the rest of New York State. Once again, for reasons I explained here http://www.r8ny.com/blog/larry_littlefield/bureau_of_economic_analysis_data_pay_per_worker_and_its_public_policy_implications.html , in general revenues and expenditures are most comparable when expressed as a share of personal income. The spreadsheets contain the information as downloaded, and you can see what I did with it.
Toxic Waste Pension Nightmare
|This just in from Bloomberg (the company, not the Mayor). At a conference in Las Vegas, the city where casino gambling is legal and legal prostitution is nearby, Bear Sterns is giving a sales presentation to 50 public employee pension fund managers to convince them to purchase the equity tranches of collateralized debt obligations (CDOs). You can read all about it here: http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=home. Per Bloomberg “Worldwide sales of CDOs — which are packages of securities backed by bonds, mortgages and other loans — have soared since 2003, reaching $503 billion last year, a fivefold increase in three years. Bankers call the bottom sections of a CDO, the ones most vulnerable to losses from bad debt, the equity tranches. They also refer to them as toxic waste because as more borrowers default on loans, these investments would be the first to take losses. The investments could be wiped out.” A large share of CDOs are backed by subprime and Alt-A mortgage loans. Please someone tell me the NYC and NY State public employee pension funds aren’t buying these.
Toxic Waste Pension Nightmare
|This just in from Bloomberg (the company, not the Mayor). At a conference in Las Vegas, the city where casino gambling is legal and legal prostitution is nearby, Bear Sterns is giving a sales presentation to 50 public employee pension fund managers to convince them to purchase the equity tranches of collateralized debt obligations (CDOs). You can read all about it here: http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=home. Per Bloomberg “Worldwide sales of CDOs — which are packages of securities backed by bonds, mortgages and other loans — have soared since 2003, reaching $503 billion last year, a fivefold increase in three years. Bankers call the bottom sections of a CDO, the ones most vulnerable to losses from bad debt, the equity tranches. They also refer to them as toxic waste because as more borrowers default on loans, these investments would be the first to take losses. The investments could be wiped out.” A large share of CDOs are backed by subprime and Alt-A mortgage loans. Please someone tell me the NYC and NY State public employee pension funds aren’t buying these.
The Losers: Below Average Local Government Spending in NYC in FY 2005
|Just because it is the national average doesn’t make it right, and it is possible that differences in local needs and conditions allow lower spending in some categories while requiring higher expenditures in others. But any deviation, in either direction, should be explained and justified. In New York, on the other hand, the winners tend to take money off the top, with (generally) state legislation guaranteeing them the first bite of the apple, with the bite adjusted upward each year. So when money becomes scarce, it is the losers who are sacrificed, including the one we have already discussed — taxpayers — who saw a big increase in their state and local tax burden as a share of income in New York City, and a smaller increase in the rest of the state, in the last recession. I once described the Campaign for Fiscal Equity lawsuit as the “battle of the losers,” pitting New York’s city and state taxpayers against the city’s children, with the winners laughing up the stands. In FY 2005 they were laughing still. In the most recent state budget battle one of the winners roared and snarled, because its bite didn’t increase as much as it felt entitled to. That is the state of play in “feudal” New York.
The Losers: Below Average Local Government Spending in NYC in FY 2005
|Just because it is the national average doesn’t make it right, and it is possible that differences in local needs and conditions allow lower spending in some categories while requiring higher expenditures in others. But any deviation, in either direction, should be explained and justified. In New York, on the other hand, the winners tend to take money off the top, with (generally) state legislation guaranteeing them the first bite of the apple, with the bite adjusted upward each year. So when money becomes scarce, it is the losers who are sacrificed, including the one we have already discussed — taxpayers — who saw a big increase in their state and local tax burden as a share of income in New York City, and a smaller increase in the rest of the state, in the last recession. I once described the Campaign for Fiscal Equity lawsuit as the “battle of the losers,” pitting New York’s city and state taxpayers against the city’s children, with the winners laughing up the stands. In FY 2005 they were laughing still. In the most recent state budget battle one of the winners roared and snarled, because its bite didn’t increase as much as it felt entitled to. That is the state of play in “feudal” New York.