During the Pataki administration, New York City’s pleas from the business community for overall lower taxes, and from poverty advocates for more spending on the poor, have largely been ignored. Not so the whines of suburban New York about its high cost of living – high property taxes, high housing costs, and the lack of alternatives to multiple automobile ownership, all of which are pricing out the young. When our politicians talk about bringing down the high cost of living, however, their “solutions” have generally involved subsidizing the high costs with taxes collected elsewhere, rather than reducing those costs. Reducing taxes in the suburbs is difficult (but not impossible) because suburban living is expensive by design, and in some ways by choice. And unless and until suburbanites become willing to change their choices and bring the cost of living down, the high cost of suburban living will remain a phony issue.
Tag: Albany
Slow Population and Employment Growth in New York City (Phony/Exaggerated Problem 1 of 4)
|The Manhattan Institute, the Public Policy Institute, and the New York Post continually moan about the extent to which New York State’s economy and population grow more slowly than the national average. The reason, they assert, is because New York’s state and local taxes are high, and the solution is to cut taxes on people like themselves until they are near or below the national average. Since New York has more pension obligations and debts than the national average, and the federal government covers a lower share of Medicaid and social services costs here, this would require spending on public services and benefits that were much lower than the national average. In other words, all public services in the state, or at least those outside certain affluent suburbs, would have to be funded like New York City’s schools.
New York’s Economic Problems: Real and Unreal
|Happy Labor Day. I began the day looking through the news, and seeing the usual round of Labor Day stories about the New York economy. There is no doubt New York State’s economy is not the strongest in the country. There is no doubt there are people in this state with economic problems. And there is no doubt that bad state and local government policies play a role in creating those problems.
And yet, hearing what is said in the media, by interest groups, and by elected and would-be elected officials, I find that the state’s problems are generally vastly exaggerated and misdiagnosed. Some of the purported problems are inherent conditions which cannot be remedied; others are the flip side of good things New Yorkers would be loath to give up. Some of the exaggerated problems are little more than a disingenuous excuse for more public money for interests that aren’t necessarily the most in need – a plea for the continuation, or even expansion, of policies that were bad to begin with. Meanwhile the state’s actual economic problems, as I see them, are generally not on the state government agenda, mainly because there isn’t an organized group giving campaign contributions that is interested in them. I’ll discuss the real problems, and my suggested solutions, in later essays (probably next week). First, however, I’ll go over what I see as phony or exaggerated problems: slow job and population growth in New York City, poverty and income inequality in New York City, the high cost of living in the Downstate Suburbs, and job losses and decline in Upstate New York.
A Modest Proposal on Vouchers
|I have a “modest proposal.” http://en.wikipedia.org/wiki/A_Modest_Proposal. Rather than creating a voucher system in education, as some have suggested, why not convert Medicare — which is a voucher system — into something that works like the public schools?
Under the Medicare program, the federal government pays for health care, but the elderly are allowed to choose any health care provider they please. If the nearest public clinic isn’t good enough, they are allowed to use other non-profit, for-profit, and public health facilities elsewhere, and still have Medicare pay. Moreover, the level of Medicare reimbursement is the about same (with an adjustment for the cost of living) whether the patients were dishwashers or doctors in their working lives, and whether they live in Scarsdale or the South Bronx.
It Takes A Thief…
|In the past, I have generally found NY Times editorials hard to read, as their tendency had been to come up with lame excuses to back the incumbent, when they weren’t just endorsing the Democrat for President. But things have been getting better. With the exception of the final decision, I found myself agreeing with much of what was said about Spitzer and Suozzi as candidates for Governor today. The Times acknowledges Spitzer’s substantial accomplishments, but points out that Suozzi’s accomplishments are in some ways greater, because they were more difficult and involved greater personal risk. The Times all but says that although Spitzer’s record is excellent, Suozzi may be the better candidate.
The Candidates On Pensions: Suozzi Had the Best Answer
|Last week was Medicaid week, based on data I have collected and want to let people see. That was planned. This week is turning out to be public employee pension week. That was not planned, but is in response to an excellent series the Times has produced on the subject. Better than anything the Times has done on any subject where I have specific knowledge in years. Today, the Times smoked out the three remaining major party candidates for Governor on the state legislature’s practice of granting New York City public employee pension sweeteners over the objection of New York City. For the most part, all three candidates answered the same, but even so, Suozzi had the best answer.
More From the Times on Pensions
|May I call your attention to the latest NY Times articles here and here. And let me repeat what I said yesterday: these pensions will not be paid!
Twenty years from now, when the burden of debt and senior citizen benefits is leading to public service and benefit cuts, soaring taxes, and a crashing standard of living, and seniors of my generation, and those after, realize that they will have to work until physically unable and then face poverty rather than having the cruise-ship lifestyle of those who came before, then public employees who retired in their 40s and 50s will be as unpopular as the tobacco companies are today. Back room deals will be cut, and budgets passed with little review, but to their detriment, not their benefit. With no one else benefiting from this largess, they will be a big target for desperate times.
Twenty Years From Now Public Employee Pensions Will Not Be Paid!
|Imagine it’s 20 years from now, the year 2026. After 43 years in which Social Security payroll taxes had been greater than Social Security payments, with the surplus used to finance the rest of the federal government (but also promised to future retirees), the Social Security system will have begun to run a deficit in 2018. Taxes will have been substantially increased, and many kinds of federal spending (housing subsidies at the top of the list) slashed to pay Social Security back, but now Congress has no choice but to bite the bullet and drastically slash Social Security benefits for future retirees. That’s bad for the 50% of private sector workers who have no retirement plan other than Social Security, and bad for the additional 30% who only have a 401K plan – a plan they now realize has nowhere near enough money to pay for decent retirement. The poverty rate among the elderly, who have been the richest and most privileged of Americans for the past 60 years, begins to soar.
Medicaid: The Family of Last Resort Dilemma
|Society faces a dilemma. It does not want to see children and the elderly suffer from the neglect of family members. When it assumes the role of “family of last resort,” however, it encourages the selfish to shift family burdens onto the community, taxing those who meet such obligations to pay for it. Concerns about burden shifting by parents led to the Welfare Reform Act of 1996, which cut them off from assistance after five years even at the risk of suffering by the children. Yet the modest, and now miniscule, cost of welfare is dwarfed by the cost of custodial care for the elderly, and as the population ages that cost is set to explode, with consequences that dwarf those of baby boom retirement and the unfunded cost of Social Security. This may be the most important financial issue we face as a society. And for New York, which has more generous services for the elderly than any other state, it is a greater issue still.
Medicaid: Parsing The High Cost Per Recipient (Second of Three)
|As I reported here, in 2003 New York State was charged $7,912 per Medicaid beneficiary, 76% higher than the national average of $4,487 and more than any other state. This is not a surprise, as New York has had the highest Medicaid spending per recipient as far back as I have collected data. And, I once read a paper that described New York State’s Medicaid program as being vastly more expensive than other states in the early 1970s, less than a decade after the program was created. In fact, I saw a film on the Channel 25 “City Classics” program showing a press conference by former Mayor Abe Beame, who was bemoaning the fact that Medicaid spending was out of control and seeking to use city resources to combat fraud to stop it. The state had no interest in doing so, Beame said, because it could simply force the city to pay.