Tag: Albany

The AARP-eligible people who control out institutions can never do enough for their contemporaries. In Albany, they have joyfully handed out pension enrichments that public employees have neither worked nor bargained for, over and over, for a decade. And when there isn’t enough money to go around, do they ever tell those of their own generations they will have to give something back? Never. They decide that those in younger generations will have to be worse off, without saying so. So Governor Paterson and Mayor Bloomberg have decided that future hires should have much less generous pensions, and thus much lower total pay overall, a few years after Bloomberg agreed to cut the retirement age for teachers from 62 to 55 and Paterson voted for all those pension enhancements as a member of the state legislature (they generally pass the legislature unanimously). Do they truthfully say “shared sacrifice” means that because those of their generation have shared, future generations will be sacrificed? No, they do not. Thus, they are frauds, as are the news organizations (with their aging readers and viewers) which don’t point that out either. The New York State legislature, of course, is far worse.

Taxing the rich is a fine idea, given the way the distribution of income has evolved in recent decades. Unfortunately New York has already thought of it, and we not only have the highest state and local taxes as a share of personal income in the country (excluding Alaska and, sometimes, Wyoming where mineral taxes account for large share) but also among the most progressive. That is particularly the case in New York City, where a local income tax, over and above the state and federal income taxes, carries part of the burden that is carried by property taxes elsewhere. The rich, to an ever greater extent than most, already pay more here than they would anywhere else in the country. It is at the federal level where the tax burden has shifted in favor of the rich in recent decades, with the regressive payroll tax increased to “save Social Security” (but the money diverted elsewhere), the progressive income tax reduced, investment income taxed at favorable rates, and loopholes created to allow the wealthy to claim their work income as investment income. The favorable treatment of investment income was supposed to increase savings and investment, but instead the savings rate fell to zero. If suburban and upstate counties want to enact local income taxes to replace part of their property tax burden, that’s fine with me. Otherwise, leave taxing the rich to President-elect Obama, who I’m sure will get around to it sooner or later.

Even before that report was released, politicians started arguing about bridge tolls. And predictably the press has treated bridge tolls as the main story. It isn’t. The main story is the other aspects of the proposal which have united all our politicians against our future, once again. Why has no one questioned putting a permanent tax, on wage income only (not retirement income or investment income), to pay for just five years of ongoing normal replacement of MTA facilities and equipment? Why have there been no articles in the Times, News, Post, Newsday, etc. etc. asking what would happen in 2014, when the bonds issued against that future revenues would have been spent, and the MTA would be right back in the same position despite permanently higher taxes? Doesn’t anyone care that the MTA is in this position today precisely because no one bothered to care about today back when today was tomorrow? Has no one pointed out that New Yorkers will be paying a higher sales tax, forever, just to pay the interest on money that has already been spent, to which they want to add this additional tax? How much deeper into indentured servitude are the generations in charge willing to send younger and future residents of New York City, the Metropolitan Transportation District, New York State and the United States by deferring costs and advancing revenues? Does everyone comfort themselves by telling themselves there is no choice?

You might have heard that “U.S. companies slashed payrolls last month at the fastest pace in 34 years as the economy headed for its deepest and longest recession since World War II. Employers cut 533,000 jobs, bringing losses so far this year to 1.91 million,” as reported by Bloomberg News.  (I can’t believe I keep promoting that man’s business after term limits repeal). You may have also heard that the number of people collecting unemployment insurance is at a 26-year high, because those laid off can’t find new jobs. But what you may not have realized is that these figures only include wage and salary employees who are eligible for unemployment benefits, given that unemployment tax revenues is what the Current Employment Survey, the source of the payroll employment number, is benchmarked to. Increasingly, especially in New York City and a few other places, immigrants and younger people, even college graduates, are not allowed to be employees. They are hired as “independent contractors,” “freelancers,” and “permalancers” even if their work arrangements are not different than those of older generations classified as employees. But they don’t get health insurance, and don’t get whatever retirement benefits that still exist. And when they are laid off and have their hours cut, it doesn’t show up in the statistics, they don’t get unemployment insurance, and if they don’t have savings or family nearby and able to help, they face immediate economic disaster. When they had money the City of New York taxed them twice, through the local income tax and the unincorporated business tax. What will happen to them now?

I’ve been reading about the negotiations between the current State Senate majority leader, Dean Skelos, and the “Gang of Three,” Sen. Carl Kruger, Sen. Ruben Diaz Sr., and Senator-elect Pedro Espada Jr., over control of the State Senate. I have a question for those who consider themselves Republicans,Democrats, “conservatives,” “proggressives,” the Manhattan Institute, the Fiscal Policy Institute, the New York Times, the New York Post, etc. Anyone want to take ownership of these guys, and say that the four of them are working for their values?

In the spreadsheet attached to this post, I provided tables of comparative data on local government employment and pay for different parts of New York State in March 2007, along with the data and capacity to quickly make similar comparisons with major counties around the country. The sources and tabulation methods are explained in that post. Attached to this post is a table that takes similar information I compiled five years ago, when the 2002 Census of Governments was released, and compares it with 2007 for the United States; New York City; the downstate suburban counties (Nassau, Suffolk, Westchester, Rockland, Putnam); the mostly highly urbanized Upstate NY counties (Albany, Broome, Dutchess, Erie, Monroe, Niagara, Oneida, Onondaga, Orange, Rensselaer, Saratoga, and Schenectady); the other more rural Upstate New York counties; and the total for New Jersey. The data show that full time equivalent local government employment per 100,000 people rose 1.4% in the United States from 2002 to 2007. For New York City it fell 4.3%, for the Downstate Suburbs it rose 8.2%, for the Upstate Metro counties it rose 1.1%, for the rest of New York State it rose 2.9%, and for New Jersey it rose 5.4%. Needless to say, I am not surprised.

It wasn’t easy and it wasn’t fun, but I’ve compiled a spreadsheet of local government employment and payroll data from the U.S. Census Bureau’s 2007 Census of Governments in time for Governor Paterson’s emergency budget session. The attached spreadsheet has two summary tables that print in two pages; one shows the number of full time-equivalent workers in various categories (police officers, sanitation department workers) per 100,000 people in March 2007, and the second shows their level of pay at that time, relative to the national average. In each case, the summary tables provide data for all local governments in the United States; New York City; the downstate suburban counties (Nassau, Suffolk, Westchester, Rockland, Putnam); the mostly highly urbanized Upstate NY counties (Albany, Broome, Dutchess, Erie, Monroe, Niagara, Oneida, Onondaga, Orange, Rensselaer, Saratoga, and Schenectady); the other more rural Upstate New York counties; the total for New Jersey, and Fairfield County in Connecticut. In a new feature, I have put one additional column in the summary tables — “your county here.” By blocking that column, and replacing text in the existing formula with the column letter (s) for whatever county one is interested in, one can put any other county in the table. The choices are all the counties in New York and New Jersey, almost all of the counties elsewhere in the country with the most total private-sector employment in 2006, and a few others that interest me, because I know people who live there. A discussion of where the data came from and how to interpret it follows.

The destruction of our public and private institutions due to their exploitation by greedy insiders, the former I have long been familiar with and frustrated by, the latter has been shocking to me in its extent, have much in common. Take this recent article from Bloomberg News. “Americans, it seems, don't want declines of 50 percent or 70 percent in the year-end bonuses paid to those who work at the nation's banks and securities firms, or at least the ones they now own, partly through the government's $700 billion bailout. No, these Americans want Wall Street bonuses to go to zero.” “The industry, however, seems not to get it. Maybe the survivors are in denial. Perhaps they believe that surely since they did a good job this year — presuming they don't work in mortgage securities or derivatives or whatever the real losers are — that they deserve the same bonuses they got during the seven fat years. Or maybe they think if they get just one more good hit, they will have accumulated ‘the number’ they need to retire and never work again.” So who on the public sector side will be looking to make one last score and hit “the number” and never have to work again?” I’ll give you a hint: for some the number is currently 55, for others the number is 62, and the idea is to get a special deal to reduce it, for those anywhere close now, at the expense of the future. Again.

The data is out for the employment phase of the 2007 Census of Governments (the finance phase will not arrive until next summer), and I have thus far tabulated the information for selected state governments: the State of New York, the U.S. average for all states, some other states around the Northeast — New Jersey, Pennsylvania, Massachusetts, and Connecticut — and some other states carried by President-elect Obama in 2008 — California, Colorado, Virginia, and North Carolina. One might expect people in those states, as opposed to (say) Tennessee, to have similar public service expectations to those of New York. The data show that New York had less state employment per 100,000 residents in March of 2007 than the U.S. average and all of the states listed save Pennsylvania and California, and that while New York State’s per capita income was 19.9% above the national average in 2006, it’s March 2007 payroll per full time equivalent worker was only 17.3% above average. A more detailed analysis, however, shows this is somewhat misleading — low New York employment and pay in higher education, and the shift of some functions to the local level, offsets above average employment and pay in other categories. The data is attached (set to print in two pages), and discussed below.

The back-to-school employment data is out from the New York State Department of Labor (attached), and guess what? In the face of an upcoming fiscal and economic catastrophe, the public schools in the portion of New York State outside New York City added another 4,900 jobs in the year to September 2008, bringing the total increase since September 1993 to 76,400. This despite staffing levels (as well as pay and cost) in the rest of the state that were already sky-high relative to the national average (adjusted for the student population, the cost of living, etcetera). Overall local government employment in the portion of the state outside of New York City is up 2,500 from a year earlier and 119,500 from 1993. All these people have a “right” to their jobs, pensions and benefits, it seems, and if honoring that right in a budget crisis would drive property taxes too high, well, New York City’s share of state education funding will just have be cut again, Silver and Skelos are likely to agree. As in the previous two recessions, but perhaps to a greater extent, particularly if credit conditions prevent the state from getting through the recession by borrowing even more.