Tag: City Hall

One of the most positive trends of the past few years has been an emphasis on creating a culture of entrepreneurship in New York City and State. Until the last few years of the Bloomberg Administration economic development had meant bribing existing large companies, companies that were shrinking over time and threatening to move away, to promise to keep some jobs in New York. Bribing them with tax breaks and subsidies. New York had played this losing hand for years. More recently encouraging people to start new businesses, and at the very least not throwing obstacles in their path, has been the policy. Here as elsewhere the trend has been to latch on to whatever is trendy – new and social media, information technology, biotech, artisanal food products, artisanal alcohol, Greek Yogurt – and ignore everything else. But at least there has been some sense that economic development means encouraging and providing an environment for acts of creation, not just taxing the suckers and transferring money to existing business and unions that are failing in the marketplace but contributing to political campaigns.

With the Democrats back in charge of City Hall I feared that economic development would revert to the bad old days. After all, Bill DeBlasio is yet another ambitious politician who will require campaign cash for his next move, and businesses that do not exist yet do not make campaign contributions. Moreover entrepreneurs have not been part of the Democratic Party coalition since the New Deal, which favored existing large corporations, and entrepreneurs have generally been seen by Democrats as a source of revenues and a foil to be demonized, while existing companies are seen as a source of jobs. The good news, according to some recent reports, is the DeBlasio Administration is apparently unwilling to get in a tax break bidding war with New Jersey over large existing financial businesses threatening to leave the state. It would be better news, however, if the DeBlasio Administration (and Cuomo Administration) would double down on Bloomberg’s late term policy of encouragement for new companies. Particularly those in a decidedly non-trendy sector: banking.

It is late in coming, and only preliminary, but comparative local government finance data from the Governments Division of the U.S. Census Bureau became available for FY 2009 late last year. As in the past, I’ve crunched this down into tables that compare local government revenues, expenditures and debts for New York City, the rest of New York State, New Jersey and the United States for fiscal 2002 and 2009. I chose FY 2002 for a comparison year because it was a recession year for the economy, like FY2009, and because it was the last budget passed before now-Mayor Bloomberg took office. When the more detailed data from the 2007 Census of Governments was out, I had compared that year with 2000, another peak year for the economy, for the same reason – the need to separate the effect of trends in the economy from the effect of actual decisions by state and local officials, here and elsewhere, on the margins. The more detailed 2007 Census of Government data is attached to this post, and further described in this post.

Unfortunately, the part of the Room Eight program that allows spreadsheets to be attached no longer works, so I had to ask the site owners to post the new data here. The “output” worksheet was set up to print on two 8 ½ by 11 inch pages; the other worksheet show what I did with the data, step by step after downloading, to not only present it but also to make it comparable across areas to the extent possible, as described after the break.  I suggest downloading the data, printing it, and then reading on.

In New York City, politicians continue to argue over extending policies that provide higher wages for workers with privileged connections to government money (or employees of firms with privileged connections to government money). One of the goals is to prevent the city from reducing costs and providing better public services for its people by contracting with private companies, by comparing the cost of the contracts with the cost of public workers excluding their greatest cost – the many years they get in retirement.

In San Francisco, on the other hand, there is a higher minimum wage for everyone – now $10.20 per hour. Not just for those with a special relationship with the government, who are then made better off than those with no such relationship. Now San Francisco is not the equivalent of New York City. It is the equivalent of Manhattan. So I wouldn’t argue that all of New York City should have a higher minimum wage. But perhaps Manhattan and the downstate suburban towns that zone out the working poor should. To offset the cost of getting to work on a transit system that New York’s political class is sending back to the 1970s. Or the risk of long bicycle rides on suburban roads where the Lexus SUVs might just cement your low status by running you over. The political class and the executive class do pretty well in SF also, but I guess they have some money left over for the serfs.

According to the New York Times, “New York City will pay the federal government $70 million to settle a lawsuit that accused the city of overbilling Medicaid by improperly approving home care for frail and elderly clients.” The care in question was personal care, “which could include housecleaning, dressing, bathing and shopping and could cost $75,000 to $150,000 a year.” Actually, it only costs that much when provided in New York City. Which is why the last time I checked, New York State accounted for a huge share of U.S. Medicaid spending on “personal care.” Many states do not even offer personal care as part of their Medicaid program.

Of course “New York City will pay” is not an accurate description of what will happen. The people who live in New York City, and will live in New York City in the future, will pay. They will have their services cut further. They will have their taxes increased further. All to pay for the federal share of underserved services for seniors, with the city’s share having been paid already. Who should the sacrifices be targeted to? Social services for children? Public schools? Should we accept fewer police officers? Stop repainting the Brooklyn Bridge? Raise the property tax? I’d like to see the New York City Council have a debate and identify specifically who will be made worse off to pay this $70 million. As a clue to who is being and will be made worse off the pay for $billions Generation Greed has made off with, leaving debts and unfunded pension obligations behind.

I was surprised to read in the newspaper that the June 2011 employment-population ratio, the ratio of people age 16-plus who were working to the total population that age, had fallen to the lowest level since June 1983, when I graduated from college into unemployment. Part of this is cyclical – this is the worst recession since the early 1980s debacle, and has arrived just into time for the children of the benighted 1970s generation – the first to be worse off than those who came before – to repeat that young adulthood experience. But I believe there is also something structural going on.

In the past 15 years (the business cycle adjusted for), I am aware, New York City’s employment-population ratio and its labor force participation ratio – the share of its residents age 16-plus who are either working or looking for work – have been moving up. This is significant because one of New York City’s chief economic liabilities for the past half-century has been its need to carry a large economically inactive population. Through 1960, New York City residents had been more likely than the U.S. average to be working or looking for work, mostly because its women were more likely to work outside the home. But during the mass population migrations of the 1960s and 1970s this changed, giving New York the status of the city that didn’t work. Is it changing back? I downloaded the data in the linked at the end of the post spreadsheet to find out (had trouble attaching).

I normally write about issues that are not being addressed in my view, but today I find that having already taken the time to download data, the Bloomberg Administration is already proposing what I was about to suggest. Ah well, might as well write the post anyway because my justifications are in addition to the Mayor’s.

Residents of the Northeast might think they have a reason to be smug about rising oil prices, since a relatively large share of them use mass transit or walk to work, and those who drive tend to do so for shorter distances. But the Northeast leads the nation in another form of oil dependence – on heating oil. As shown in the attached spreadsheet, the states where the highest share of homes use heating oil are along the Atlantic Coast, with the percentage falling from 75.6% in Maine to 7.1% in North Carolina as one travels from north to south. New York City and the rest of New York State are in the middle of this pack at 35.2% and 30.4%. The U.S. average is just 7.3%. Therefore, Northeastern homes share with U.S. drivers elsewhere the economic and national security vulnerabilities of dependence on foreign oil.

Since the documents I am using as the basis of this analysis of the New York City budget are in the “Budget Summary” documents, a large number of agencies have ended up lumped together as “Other,” and that is how they are listed in the spreadsheet attached to the first post in this series. The largest among the included agencies are the Department of Environmental Protection, which manages water and sewer infrastructure, the Department of Transportation, which manages the city’s streets, Parks, Libraries, Cultural Affairs, and Housing Preservation and Development. A host of smaller agencies that could best be described as the bureaucracy. The budget proposal for these agencies, and the city-funded portion of the City University, are discussed in this post.

One might expect that when times are tough in the private sector, and more and more people have more and more needs, New York City’s health and social services spending would increase. But in fact that often isn’t the case. In particular, the Administration for Children’s Services has a recurring cycle. It is usually cut first and deepest (vying with parks and infrastructure) in recession until, after a lag of a few years, a notorious case of child torture and death that the agency was too overwhelmed to stop hits the media. Then there is a “reform” and increase in funding. But one type of spending in this general category increases relentlessly – Medicaid spending on senior citizens. That spending, however, is by the State of New York, not the City of New York, a fact that affects how it is presented in the city budget.