Economic Prospects For New York

Most every night I see one or more taxpayer-financed ads run by the state of New York boasting that "New York is open for business."   The ads tout Governor Cuomo's program of tax free zones for business expansion, and claim that New York "is ranked No. 2 in the nation in private sector job creation."  Could this really be true?  The New York Post has an editorial this morning expressing extreme skepticism.

I've spent quite a bit of time looking today, and I can't find anything like the statistics that my tax dollars are paying to put on the television every day to fool the voters.  At the Manhattan Institute's Empire Center E.J. McMahon claims that New York private sector job growth badly lagged the national average in 2013, and he links to statistics released on June 19 by the New York State Department of Labor to back him up -- which they certainly appear to do.   Total employment for New York State up by 1.4%; for the United States up by 2.1%.  New York City slightly beat the nation with growth of 2.3%, but all the suburban counties lagged (Nassau/Suffolk +1.5%; Putnam/Rockland/Westchester +0.6%) and upstate things ranged from pitiful growth to actual declines (Binghamton -0.7%; Elmira -1.2%; Glens Falls -0.7%; Ithaca -2.0%; Syracuse - 1.0%).

Meanwhile the U.S. Conference of Mayors is out with a study of growth prospects of all U.S. major metropolitan areas from 2013 to 2020.   Here is the press release.  This was picked up today by the Wall Street Journal among others.  The study is based on analysis by economic consulting firm IHS Global Insight.   They rank the 363 metro areas from projected fastest growing to slowest.  The ten fastest are mostly in low-tax Texas, Utah and Florida.  Of the ten slowest, five are in New York:  Binghamton, Utica/Rome, Kingston, Elmira and Buffalo/Niagara Falls.  Here is a chart:

They project New York City to grow at just about the average of all American metro areas, which is pitiful given the ever-increasing predominance of the largest cities around the world as the places where everyone wants to live.

Meanwhile, on Friday Mayor de Blasio and Speaker Mark-Viverito of the City Council held a press conference to announce a budget deal for the coming (July 1 - June 30) fiscal year.  Here is the New York Times Report.  I cant find any written documentation of this as yet.  The summary is that last year they spent about $70 billion; in his May plan, de Blasio proposed to spend about $73 billion; and now that the City Council has weighed in, it's going to be about $75 billion -- a 7+% rate of spending increase when the rate of inflation is thought to be under 2%.  The basic role of the City Council in this process is to add spending for various feel-good initiatives that may or may not do anything useful:  $6.25 million to provide free lunches for every middle school student! (Poor students already got free lunches; so this is for the rich ones?)  $6.2 million to hire 200 new administrative aids for the police department!  etc.  Here is the New York Times take:

Mayor Bill de Blasio and the City Council Speaker, Melissa Mark-Viverito, have announced an agreement on a $75 billion budget that Mr. de Blasio said signaled a more compassionate era for New York City, with investments in public housing, expanded prekindergarten programs and summer jobs for youths, but with no tax increases or major cuts.

With no documentation, they continue to hide the big numbers.  Where are the retroactive raises for the teachers?  Even after the efforts of Comptroller Scott Stringer to bring some honesty to this process, it appears that only about $700 million of some $4 billion of retroactive teacher raises will be accounted for in the current year.  The rest will be deferred and hidden in future years.  And then there is the issue that the pension projections are laughable.  Not a word on that that I can find.  Hiding major fiscal time bombs in a way that would be fraud if you did it is what de Blasio and the Times refer to as "compassionate."

So we have a ball and chain of huge future obligations to drag down our economic performance for decades to come.  But as of now, it's still well hidden by politicians who continue to play for today's headlines.