Tag: Albany

When asked at the end of the1974 season why he was replacing his general manager, the owner of the Houston Oilers football team replied “I gave him an unlimited budget, and he exceeded it!”  The same may be said of New York State’s Medicaid program.  Its budget is unlimited – its cost goes up by whatever it does every year, and taxes are raised and other services cut to make up the difference. Medicaid, along with debt service and pensions, get the first, second and third bites of the apple.  (Public schools in the portion of New York State outside New York City get the fourth.)  And when the cost of Medicaid is restrained, as in the mid-to-late 1990s, it is by reducing the number of beneficiaries who receive health care benefits, not by restraining the increase in what the health care industry decides to charge.  The number of people employed by that industry in New York, fueled in large part by government money, rises rapidly each and every year.  With just 6.5% of the nation’s population, New York State accounted for 15.1% of its Medicaid spending (see attached spreadsheet).

How much more would the federal government have to spend on health care to provide universal health insurance?  How much more would New York State have to provide in state education funding to provide every New York City child with a qualified teacher and an a national average class size?  How much more would the MTA have to borrow to build long promised improvements such as the Second Avenue Subway?  Now imagine you were asking these questions in the early 1990s, when former President Clinton held up a card and promised universal heath care and the Pataki, Silver and Bruno era began in Albany.  What numbers have you arrived at?  Chances are, that much and more has been borrowed and spent since.  But like a football held by Lucy Van Pelt, these benefits have been pulled away at the last moment, and the money has gone elsewhere.

You may have heard that New Jersey Governor John Corzine has called a special session of the New Jersey State legislature to tackle the “intractable” issue of high New Jersey property taxes.  He plans to reduce pensions and benefits for new employees, to offset the cost of the pension enrichment for those cashing in and moving out, and borrowing against the pension funds, passed during the Whitman Administration.  He plans to try to entice, or force, New Jersey’s high-spending school districts to consolidate to cut costs.  And, he plans to raise other taxes, perhaps at the state level, to offset a property tax decline.  Those are tough stands. Compared with the next Governor of New York, however, the fact is Corzine has it easy.

In several past posts, and in several future posts, I’ve discussed the winners, those categories of services and people who get far more public funding here than the national average, in some cases more than in anywhere else in the United States.  But despite state and local taxes that were 43% higher than the national average in FY 2004, relative to personal income, and lots of fee income besides, taxpayers are not the only losers in New York City.

Spending on the city’s public schools has been below national average as a share of income, often far below, as far back as the data goes.  Parks, recreation and culture had been above the national average until1989, Ed Koch’s last year in office.  It has been far below average ever since, despite lots of private donations.  Major transportation projects are proposed and planned, but never built here.  Yesterday, the Daily News reported that the city’s libraries are rarely open.  http://www.nydailynews.com/front/story/441273p-371556c.html.  No surprise there.

As I recall from high school Latin, “scrute” is trash, and the word scrutinize, from which it is derived, means to pick through the trash.  Using data from the Governments Division of the Census Bureau, and the New York State and U.S. Departments of Labor, this essay will pick through the trash at the NYC Department of Sanitation to find out what kind of deal we are getting.  That isn’t as easy as for, say, schools and policing, which are provided in every locality, because not everyone has public trash collection.  But I did the best I can, and from what I can see, our deal stinks.

It’s over 90 degrees as I sit here, and I’m thinking about energy, the environment, and leadership.  If you read my prior post on the subject, you know that I believe leaders are those who can convince people to cooperate toward a common goal, trusting that their goodwill will not be abused by those who are just out for themselves.  I said there was no leadership on energy.

We don’t have air conditioning because in this climate, unless you have it and become dependent on it, you only really miss it a few days a year a few years a decade.  And on those days, you are begged not to use it.  With energy scarce and the environment only capable of holding so much carbon, with with so many billions living in multiple dwellings without cross ventilation, with so many people who are old and without health problems, I’ve decided air conditioning is one amenity we can live without.  But somewhere in the west, I’m sure Dick Cheney, who considers conservation a “personal virtue,” has an air conditioned dog house.

In my prior post, I pointed out that although New York City’s poverty rate is 55% higher than the national average, its private, mostly non-profit employment in the Social Assistance sub-sector relative to population is 154% higher than the national average — 2 ½ times that average.  Yet, despite all these people hired, at first glance, to tend to their well being, advocates and analysts say the city’s poor are not well off compared with poor people elsewhere.  Disaggregating 2004 annual average employment relative to population for this sub-sector into specific industries, on finds a complex picture that raises many issues, but let’s put the headline up front.  Excluding one industry, one finds that New York City employment in the rest of the Social Assistance sector relative to population is just 54% higher than the national average, dead on what one would expect given the city’s higher poverty rate.  On a net basis, therefore, that one industry can explain all the additional Social Assistance employment in excess of what one would expect given the city’s higher poverty rate.  In that industry, New York City’s employment per 100,000 residents is seven times the national average, a greater disproportion than for just about any other sector.  That industry is…

Is New York City the best place to be poor?  If the measure of quality of life for the poor and troubled is the number of people hired to provide them with services, it certainly appears, at first glance, to be one of the best places.   Or at least it should be.

In 2004, according to data from the Governments Division of the U.S. Census Bureau attached to a prior post here, the City of New York employed 278 persons in “public welfare” agencies for every 100,000 residents.  The national average was 93; the rest of New York State averaged 231 and New Jersey averaged 121.  Much of the social service work in the city, however, is actually done by private, mostly non-profit agencies in the Social Assistance sub-sector which, according to the current industry classification system, “provide a wide variety of social assistance services directly to their clients.”  According to covered employment (ES202) data for the second quarter of 2005, New York City had 1,857 people employed in this sub-sector for every 100,000 residents.  The national average was 708; the rest of the New York State averaged 1,048 and New Jersey averaged 730.

As noted in my prior post, we are facing a slowly building economic crisis on energy, and we are facing it without leadership. But what would leadership on energy look like? And do I have a proposal? As it so happens, I do. The unfortunate fact about the demand for energy in the United States is that it is “inelastic” in the short run. Since we cannot start living in compact cities or throw away our energy-intensive homes and vehicles overnight (doing so would take a lot of energy), we consume nearly as much no matter how much it costs, desperately bidding against the rest of the world for the limited supply, sacrificing other aspects of our standard of living. In the long run, if we had had leadership, we would have made different choices over the past 20 years. In the long run, if we had leadership, we might make different choices over the next 20 years. In the short run, however, there is only one thing that suburban, auto-oriented America can do to substantially reduce its energy consumption – carpool on a large scale.

I am more concerned about the intermediate-term future of the U.S. economy today that I have been in nearly 20 years, since 1986 and 1987. At the end of the 1990s I knew the stock market was overvalued and heading for a fall, but felt that the underlying economy was sound. Now, despite the hard work of the American people and the innovation of American companies, we are vulnerable to a significant downturn in our standard of living.