For a few decades, in large part as a result of state fiscal policies, the City of New York has spent far more than average on the health care industry (not all on health care) and far less than average on the public school system (and even less than that on education). With the possibility of at least somewhat more fair school funding from Albany, and the release of the report of the Commission on Health Care Facilities in the 21st Century, there is an opportunity to alter that pattern. As other forms of transportation developed, much of the nation’s rail capacity became redundant, and eventually had to be abandoned to save the rest of the rail system financially. Since rights-of-way are uniquely valuable and hard to replicate, many places preserved them as trails. Similarly, in a densely populated city space is scarce and expensive, and one of the city’s educational problems is the lack of it. The hospitals and wings to be closed have been exempted from local property taxes for decades, an exemption the value of which likely exceeded their current value many times over. They should be purchased by or given to the city, gutted, and turned into high schools (if large enough) or other schools. If purchased, the money received should only be used for a purpose consistent with the purpose of the tax breaks had been received, not bonuses for departing executives. At least the schools would have decent labs and, if a high school were located in the former wing of a still-working hospital, perhaps some of the students would be inspired to health care careers. For despite the “jobs lost” in the short run due to the proposed closings, the long-term situation in health care is a labor shortage.

So the Court of Appeals has ruled that in 2004 New York City schools should have spent, at a minimum, an additional $1.93 billion. Is that a lot, or a little? Would the total be an excessive waste of money, or nowhere close to the need? If the state paid for it all, would those elsewhere in the state have been cheated out of their rightful share of aid, or have continued to shortchange the city’s children? And would city residents have reason to be on-their-knees grateful, or outraged? To me, the way whatever settlement is described is as important as what that settlement is, because it will set the stage for what is demanded, and what is rationalized, for years to come. New York State’s winners expect a high level of service; they not only expect to win, but also expect to be told they have been generous, or cheated, so they can continue to sneer at and resent the losers. You’d think the truth would be the easiest thing to provide, since giving one person the truth doesn’t’ take money from someone else. It actually appears to be the most difficult. As it happens, while the Zarb Commission appears to have had Fiscal 2004 data years ago, that happens to be the latest available to me, both from the New York State Department of Education Fiscal Policy Unit and the U.S. Census Bureau. And below, using that information, is the meaning of the CFE $1.93 billion.

My interaction with politicos has been very limited over the years, probably to our mutual benefit. I can count the times I have been the same room with an elected official on two hands, and the times I have actually spoken with one on one hand. But about four and a half years ago, I found myself in the back of a room next to Alan Hevesi, who was then running for New York State Comptroller, and I asked him for something. Handing over a sample, I asked if he, as Comptroller, would compile and publish the kind of comparative state and local revenue, expenditure, employment and payroll data that I have been producing privately over the years (see here and here). I had previously tried to convince some of his future underlings to do the work, but had gotten nowhere, which is no surprise given my own history as a government underling and inability to accomplish anything. But here I was taking to the future top guy. The reason I wanted the Office of the State Comptroller to compile and publish the information isn’t that I didn’t feel like doing it myself. For reasons I’ll explain after the jump, that office is in a position to provide more detailed and timely data than I am. Well, despite some positive noises at the time, I never did get my data.

You might have read this article in the Times which reports on how cities around the country are desperately trying to attract the young, particularly the educated young. The reason: with the nation's aging demographics, we are entering an era of skilled labor shortage, and whoever gets the educated young gets jobs, income, and economic activity.

I have also heard this issue raised in Upstate New York, but here the concern about losing the young isn't about jobs and business, it is about "the tax base." In New York, you see, we have the richest senior benefits anywhere, but prefer to exempt seniors from taxes, so someone has to be available to pay relatively more and get relatively less.

While the CFE decision provided one last chance for NYC conservatives to show they aren’t hypocrites (one they apparently will not take), it also provides one last chance for NYC Democrats to show they care as much about the quality of life of NYC residents as they do about the perpetuation of their own power and perks, and those of their organized supporters. Such Democrats might want to tax everyone more and spend more on everyone. But faced with opposition from elsewhere, they have agreed to tax New York City more and spend more elsewhere, nowhere more so than in education. At least, in their view, overall education spending is higher than it would otherwise be – number one in the nation as a share of personal income, despite low spending in the city. In general, those that matter are unaffected by the negative consequences, making those consequences seem remote and unimportant. That is the deal we have, the deal the Court has held to be constitutionally wrong but also has held that it cannot or will not change.