Thursday, June 5, 2014

Right To Work & Right To Spank

Buffalo, NY---The map below says a great deal about Right to Work States, authoritarian and corporal punishment in schools.  This article in VOX is profound.

Friday, May 23, 2014

Moving from New York State in Droves

Buffalo, NY---A very tiny percentage of people move out if NYS annually (according to Current Population Survey (CPS), about the same number have been moving to Florida for decades to retire) and others that move are primarily in the lower income category because they can't afford to live in rich states (NYS is a "rich state"). They are moving to states like Texas because they can afford the lower cost of housing and because of the widely available low waged jobs.

Therefore, the evidence shows it is NOT because of New York's high taxes, but primarily because of the high cost of housing in New York which has become the exclusive province of the wealthy.

In fact, recent studies show trends that more people are staying put:

This map shows millionaires per capita and the megalopolis of Washington, NYC and Boston show that the wealthy tend to cluster where the money is.

NYS is in fact "growing" by approximately 1.7 percent annually.  This is due largely from immigrants moving to downstate.

The rhetoric that peddles to the contrary (Republican nominee for NYS Governor Rob #Astorino) "They are moving from New York in droves" is simply complete #Bunk.

Thursday, April 10, 2014

The Blame Game in Property Tax Increases

Buffalo, NY---Local government drives the cost of your property tax bill.  Here is a look at some of the reasons property taxes have been increasing over the years.  This does not take into account the STAR exemption which is said to drive up education spending as well as transfer from local government the costs of education to the taxpayers statewide.  Other factors contribute to the growth of property taxes as well and are definitely overlooked when considering the main drivers.


From 1995 to approximately 2012-2013, there were two economic contractions in New York State.  The first occurred after September 11, 2001 and the second occurred in 2007-2008 or the Housing/Banking crisis.  Immediately following those catastrophic events, local government employment surged.  The number of teachers as a segment of that population did not, however. In fact, they suffered major losses following and during the contraction cycles. During the 2012-2013 period, local government added some 78,000 people to the payroll.  These numbers do not include NYC and the Burroughs.  State employment levels have had a net loss of approximately 30,000 government employees since the 1990s. 


New York State had a net gain of roughly 8,600 teachers throughout the state to 2012. Approximately 6,000 of those went to Nassau and Suffolk County alone.  Suffolk and Nassau had an 11% and 3% increase in population between 1993 and 2012.  Suffolk County has the most number of students (255,293 in 2011) and teachers (18,663 in 2011) in the state (compare to Erie County which had had 133,580 Students and 10,457 Teachers in 2011).  Nearly all school districts in NYS have an average of 13 students per teacher ratio and have maintained that over 20 years. Suffolk County spends approximately $15,000 per student where as Erie County Spends approximately $5,000 per student. 


The state gained roughly 15,000 police personnel over the same time.   Police retirement costs have been rising exponentially and this is likely due to overtime.


Looking at the Office of the Comptroller of New York State’s, retirement benefits are one of the fastest growing segments of municipal budgets. Transportation and economic development are also large segments of municipal budgets, but not near as  large as retirement benefits. BUT the largest single cost to local governments is medical benefits which also has been growing, but not at the same rate as retirement benefit costs. (Note: This site does not take into consideration the time value of money.  Therefore, for example, $14,000 in 1999 is approximately $20,000 in today’s dollars).


Retirement benefit costs are fast growing for three reasons in New York State:  One, years that the stock market was doing well, local governments were funding at lower levels (the New York State and Local Government Retirement Fund is fully funded and one of the few in the nation that is fully funded).  Two, the two economic contractions cause lower yields and therefore require higher funding levels to make up the difference.  Three, the large surge in local government employment.


Therefore, it appears that the single largest contributing factor to your tax bills is medical benefits.  Would it not seem logical for State and Federal government to lower the costs of healthcare so that tax payers could see their tax bills at the local level reduced and reduced significantly?  This means more than supplying affordable healthcare insurance.  This means investigating the cost of providing healthcare at its core.



*All assumptions are based on the review of the Bureau of the Census Pension Series and Government Employment data and the Common Core of Data (CCD) from the Department of Education.

Wednesday, January 15, 2014

Fish Story

Buffalo, NY--- This recent news flash that from 2011-2012, there are more people moving to Florida from NYS in the past year rather than the reverse lured the worst of the social media trolls.  Several conservative media outlets mixed the American Community Survey (ACS) years, e.g., comparing the 2011-2012 results with the 2006-2010 (every ACS survey is different and has different measures).  The most spouted and unintelligible response in comments by the trolling public was that it was because New York State supposedly has some of the highest taxes in the nation. 

This dribbling is taken from the annual right leaning Tax Foundation report that ranks states according to selected statistics that result in the particular biased position as stated above.  It is often countered by the left leaning Institute on Tax and Economic Policy (ITEP) showing that the report fails to measure economic output and that the selected statistics are indeed biased in favor of promoting an unsubstantiated (meaning there is no evidence to support this position) need to lower corporate taxes and ending the estate tax in New York State. 

The same old tired sentiment goes like this, “Lowering corporate taxes leads to job creation”.  The Conservatives have been hyping the same ideology for forty years, and indeed, it is simply just an “ideology”. 

The social media trolls apparently take this infamous element of Conservative propaganda as scripture.  First of all, “New York isn't shrinking in population; it's just that Florida's growth is outpacing it by a 3-to-1 ratio, and ex-New Yorkers are the biggest domestic source of new Floridians and has been for years. More than 537,000 residents moved to Florida last year, and around a tenth of them came from New York State.”  However, if you measure the number of people from New York that move to Florida, one tenth of 537,000 is 53,009 people.  Drilling down to make more sense of this number, this is approximately 3% of New York’s total population that moves to Florida annually. 

Again, NYS is not shrinking.  New York is growing about 1% annually and one of the slowest growing of the big four: California, Texas, and Florida, New York still remaining at number 3. Florida’s rate of growth is 2.7 percent according to the Census Bureau while the rate of growth between 2012 and 2013 for the United States is 0.72%, the lowest since the recession.  The population loss is mainly from Upstate New York (Buffalo, Rochester and Syracuse) since New York City is growing, largely from an influx of foreign immigrants.

According to Atlantic Cities which has a regular series on migration patterns in the U.S., “People in their late twenties had the highest mobility rate (about 65 percent), while Latinos and African Americans were the most mobile racial groups (each with rates of roughly 43 percent). Households making under $50,000 a year moved a bit more than those with incomes over $75,000. Renters moved much more than homeowners: at a rate of two-thirds to less than a quarter, respectively… the unemployed moved at a higher five-year rate than people with jobs (48 to 37 percent).” 

Articles regarding migration broadly have broken it down into cohorts.  According to the AP analysis, half of all migrants to Florida are between the ages of 25 and 65 and two-fifths are under the age of 25. 

Working age population is not the devil in the details, however.  Education level is and it is often overlooked.  What we need to specifically know about New York working-aged outflows is how much of that particular cohort is considered “unskilled?” 

According to the ABC news article sourced above: “New Floridians, such as 47-year-old Michael Richards, list a number of reasons for moving here: the weather, no state income tax, a familiarity from family vacations or being stationed in the military, the availability of low-skill jobs and proximity to Latin America and Europe.”  The key words here are “availability of low-skilled jobs.” 

Let’s look at some facts. Although Florida has no state income tax, the state has a high sales tax which makes this state a particularly regressive tax state. This means in simple terms that low income folks subsidize the rich.  On the other hand, New York has one of the most progressive tax structures in the U.S. 

According to another article from NPR, “Florida's mean annual wage of $41,000 is less than California's $52,300, New York's $53,500 or Texas' $44,000, but some new Florida residents see benefits to working in a fluid, low-wage economy.”  There are volumes of geopolitical summaries which show that Right-To-Work states are the poorest states in the nation.  Moreover, these states are typically “Red” states, meaning that they vote Republican. 

Another characteristic of tax regressive states which include Florida is that these states are the most dependent upon government (they have more government employees than Blue states and are more dependent on public assistance).  Doesn't this sound a bit counter intuitive to the GOP talking points?

Finally, we know that these particular states have low literacy and education rates.  Yet, these states continue to vote the Republican line and that includes the ideology that lowering corporate tax rates lead to job creation when no such evidence exists.  This has major significance to broader patterns as we shall discuss below.

What is most disconcerting in this economic climate is that Americans are moving less than at any other time in its history.  Labor mobility (both horizontal and vertically) is a measure of economic well-being. This article “The Mystery of Our Declining Mobility” by Eric Jaffe in Atlantic Cities quotes a study in The Conversable Economist, “By most measures, internal migration in the United States is at a 30-year low. Migration rates have fallen for most distances, demographic and socioeconomic groups, and geographic areas. The widespread nature of the decrease suggests that the drop in mobility is not related to demographics, income, employment, labor-force participation, or home ownership.” 

A significant and important counter to this conclusion is contained in the recent working paper “Why Has Regional Income Convergence in the U.S. Stopped?” by Peter Ganong and Daniel Shoag. This article in Atlantic Cities and in Harvard Magazine (January – February 2014) entitled “Gated Economies: Immobile Labor” are easier reads summarizing the results of this study. Immobile Labor begins, “For 100 years, the United States experienced a steady decline in income disparities between the richest and poorest states—with Mississippi and Alabama, for example, beginning to catch up to the more prosperous Connecticut and New York. But this equalizing trend ceased after 1980. Why?”

Much has already been said in the media about the rising income disparity and inequality in America, but this study and its authors have an answer to the why.  It is also the answer as to why Upstate New Yorkers are moving to states like Florida and Texas.  More profoundly, it answers the question of “who?” the 3% is and why they are moving out of the state more than any other explanation. 

The findings are particularly significant concerning restrictive land use regulations.   This DOES NOT MEAN land use regulation per se.  It is the “exclusion” of unwanted land uses, and not housing discrimination.  A phenomenon that generally takes place under gentrification whether intentionally or accidental is when places develop too fast or become too crowded, there is a rush to curb development permits.  Eventually, people, who once could afford to live one place, then cannot any longer and so are forced to move to a more affordable place.  Boom and bust economies like the boomtowns of (Williston) North Dakota are an excellent example.

Peter Ganong and Daniel Shoag found that land-use restrictions in high-income locales have created barriers to entry for less-skilled workers while also exacerbating inequality and threatening labor mobility.  Interestingly, they found that the restrictive land use laws precede concentrations of wealth.  This means that high housing costs, not the rich, result in barriers to low-skilled workers, thus stemming the flow of lower-income people to the most productive places.  Intuitively this works since Blue States have higher economic outputs than the Red States like Florida and other Red States have hardly any land use regulations at all.

The Northeast Coast has the highest household income of the U.S.  This also means that high income/high skilled people are not moving in droves to Florida.  In fact, it is exactly the opposite.

And so, now we have the gist of the Blue State/Red State - Union/Right-to-Work dichotomy in simple economic terms.  It always is about the land.  Let that be a lesson to the people of the Town of Amity, New York.

More on the history of labor mobility in future posts.

Wednesday, November 6, 2013

New York State Banking Aristocracy Won't Allow This In New York

Public Banking in Vermont

November 5, 2013

For Immediate Release

Contact: Matt Stannard

Development Director, Public Banking Institute

Public Bank of Vermont Could Create Thousands of Jobs, Save Millions of Dollars: Report

A report released yesterday by Vermonters for a New Economy concludes that a publicly-owned bank in Vermont could yield over 2,500 jobs in the state, add almost $200 million to the Gross State Product and over $300 million in state output, and save the state “close to $100 million in interest costs.”

The results of the report led Vermont State Sen. Anthony Pollina to announce today that he will be filing legislation this session that would give the Vermont Economic Development Authority a banking license. Such a bank would, according to Vermonters for a New Economy, “enable Vermont to keep our taxpayer dollars in Vermont, working for our economy.”

Vermonters for a New Economy commissioned the report from the Political Economy Research Institute, an independent unit of the University of Massachusetts, Amherst, with close ties to the school's Department of Economics.

The study demonstrates that public goods can be funded without putting governments in debt to private lenders with outlandishly high interest rates, says Marc Armstrong, Executive Director of the Public Banking Institute, a nonpartisan group devoted to education and advocacy on publicly-owned banks. “Vermont is already in the banking business with the extensive loan programs in place at the Vermont Economic Development Authority (VEDA), Vermont Housing Finance Agency (VHFA), and the Vermont Student Assistance Corporation (VSAC),” Armstrong said. “This study confirms the merits of funding these same loans with inexpensive bank credit, something only available to licensed banks.” The report points out that the new credit generated by the bank would be at low cost to the state because a public bank does not need to sell bonds to borrow money.

Public banking advocates argue that democratically-run, publicly-owned banks avoid the diversion of public money and private deposits into speculative instruments and foreign industries that compete with domestic industries, and avoid high interest rates in the financing of public services. The Bank of North Dakota, the only state-owned bank in the continental United States, was founded in 1919 and has been profitable every year since 1971. In 2012, BND set a new profit record for the ninth straight year, making $81.6 million in profits in 2012. Return on Equity was 17.6% and its assets grew 14% -- to almost $6.2 billion. During the 2008 economic crisis, North Dakota had its largest budget surplus in state history.

Armstrong believes the study also demonstrates that public reliance on private sector banking is “wasteful,” because it places taxpayer money into private banks, only to be borrowed back at higher rates. “This is like lending your snow blower to your neighbor, only to have your neighbor charge you when you want it back,” Armstrong said.

On Friday, November 8, Vermonters for a New Economy will hold a roundtable discussion on the results of the study, at the North Branch Winery, in Montpelier, at noon eastern time.

Supporters of public banking are currently launching a Friends of Public Banking campaign with a goal of creating public banks in all fifty states in the U.S. 

# # #

Wednesday, October 9, 2013

Those Who Disregard History...

Buffalo, NY---"One of the biggest hoaxes of American history is that the Civil War ended back in 1865..."

The Salon article is spot on.  As previously covered in this blog and else where, the current House of Representatives' majority are Southern Republicans. These are the decendants of the Dixicrats of the 1930s through the 1960s who resisted New Deal, FDR and Civil Rights, who switched political parties (from Democrat to Republicans as soon as Attorney General Biddle issued the circular under FDR that the Justice Department would use the force of law to prosecute indentured servitude and peonage a few days after Pearl Harbor).  For those of you who resist the truth of history, Strom Thurmond did exactly that.  

Therefore---persistent Feudalism is rearing it's ugly teeth again. The Tea Party in Congress is yesterday's Feudal Lords return to State's Rights, Fugitive Slave Law and Southern Aristocracy demanding to retain their status quo or destroy the Federal Government through shutdown and insolvency.

Problem is that the Federal Government expanded its power and reach like no other time in history.  There is a reason perhaps that our country has to revisit in order to learn the lesson.  It will not likely be painless this time, nought.

Ten of the original 12 Confederate States are not participating in the Affordable Care Act:

Tuesday, July 23, 2013

Town of Amity: Adverse to Site Plan Review Law

Buffalo, NY---Recently the Town of Amity in Allegany County, New York proposed a new Site Plan Review law to its residents.  I was not in attendance at the two Town Board meetings in which it was discussed.  However, I did get the play by play thanks to modern technology.

I am one of the part-time residents that I speak of below.  I own property in the town and might retire there depending upon how things turn out.  There are a lot of ifs in fact.  If fracking is given the go-ahead, if development ruins the rural character, if my land gets contaminated , etc. The meetings on the site plan review law is telling. 

So here is my rationale to my emotion laden friends who are afraid and allowing their fears to dominate the debate without thought to the future of the town or without thoughtful and good neighborly relations:

Some of you are adverse to any type of regulation at all.  That is well known and has been since the Town’s birth well over 200 years ago.  Your existing concept of private property rights was the prevailing law in an agricultural-based economy that pretty much disappeared from the Town of Amity at the time that the Court House was built on the hill in the early 1970s.  The Town of Amity’s economic base is no longer primarily invested in agriculture.  Parts of it still remain; however, what does remain is being consumed by larger agricultural conglomerates or corporate farming if you will.  


There are very few small dairy cattle operations or chicken or pig farms in the Town any more. The Town’s economy is now steeped in a service economy or providing services largely involved in retail, food and hospitality.  It is quickly becoming a bedroom community for Buffalo and Rochester full of second residences with part-time residents.


The current proposal for a site plan review law did not incorporate what you think of as conventional zoning and the rumors circulated with this assumption were flat out incorrect.  Site plan review simply curtails the impact of land uses on adjacent properties.  What site plan review does is regulate design aspects to comply with what are already common requirements for development in some state statutes or nuisance violations.  It is NOT zoning.


More importantly, the site plan review law was for new development only and did not apply to residential development or your existing homes.  The standards are intended to protect common public health and safety issues that could arise from new development like on-site septic and sewer or the ability to not overload existing water resourcesor visual pollution form Las Vegas style signs, noise or odors that could potentially cause peace disturbances and soil erosion that could wash away your neighbor’s driveway.  The law was simple common sense solutions as any industrial or large commercial impact could and would cost the existing residents more in the form of taxes to mitigate those impacts down the road.  Under NYS Town Law, there is even the ability to waive any requirements as the board sees  as making common sense.


The proposed law was forward thinking planning for potential high impact development resulting from future gas drilling and its onslaught of workers and their families coming from out of town.  In fact, the law was actually minimal in regulation and very flexible. This is not seasonal and temporary hunters coming in for deer season.  These are workers and their families coming from who knows where and staying for a long time.  


The Town is hardly prepared for the gas fracking bust and boom. You might like it at first.  But I am certain that you are not going to like it when it starts to overwhelm services that the town provides.  What you have to ask yourself is this:  Should you want to prepare (be proactive) at least something in case or do you want to react after the fact when it is too late?