NYC Budget vs. everywhere else
August 11, 2021 6:27 PM Subscribe
NYC Budget is nearly $100 billion, with the nearest city (LA) having one at $8 billion. The per capita spending is nearly 3x higher. How is it possible that the revenue for NYC is so much higher and how is possible that NYC spends so much?
Please point me to articles and reasons why this has occurred? Do LA residents (and other cities) just get less services than NYC? Is this because there are so many rich people in NYC? I know one reason it's higher is that education comes out of the city fund, but this is 1/4 of all spending. Property taxes are really not high (at least compared to suburban areas). It just seems like it doesn't add up.
Please point me to articles and reasons why this has occurred? Do LA residents (and other cities) just get less services than NYC? Is this because there are so many rich people in NYC? I know one reason it's higher is that education comes out of the city fund, but this is 1/4 of all spending. Property taxes are really not high (at least compared to suburban areas). It just seems like it doesn't add up.
It doesn't explain everything, but New York has a city income tax, while LA does not. New York's population is over twice as much as LA's. To lunasol's point, property taxes in California are generally from the county, and LA County is HUGE compared to the city of LA.
posted by LionIndex at 6:48 PM on August 11, 2021 [3 favorites]
posted by LionIndex at 6:48 PM on August 11, 2021 [3 favorites]
NYC budget includes a lot of things that are county services in LA, for instance schools (LAUSD budget is $7.59b alone) and water/sewer (LADWP budget is >$6b) etc.
posted by goingonit at 7:25 PM on August 11, 2021 [4 favorites]
posted by goingonit at 7:25 PM on August 11, 2021 [4 favorites]
Fwiw, in this year's new budget, there is about $10 billion in federal revenue that will not be there going forward. Spending what we don't have. Look at the budgets under Bloomberg and then the growth over DeBlaz' 8 years.
posted by AugustWest at 7:40 PM on August 11, 2021
posted by AugustWest at 7:40 PM on August 11, 2021
Best answer: Great question - I took a seminar in grad school comparing NYC, Chicago and LA. So first I'm going to rewind the clock as NYC's budget has recently doubled - 6 years ago it was around 45 billion.
The single two largest items in NYC's budget is education and cops.
LA has a separate school district, and it's budget is ~10 billion. So for comparison total LA budget should actually be closer to 20 billion, while the typical NYC budget, for twice as many people, was also roughly double LA's. And most of the remaining difference is what NYC spends on cops. Typically. I'll note NYW is also a separate tax body, sort of like LADWP.
So why has NYC doubled to around 80 billion? Cities tend to do infrastructure/hiring* in waves, and there is generally a push and a pull. The push is that every previous wave of infrastructure means 30 or 40 years later a new round will be needed to replace the aging facilities or staff. The pull is the cost of borrowing money is very low, so it's a good time to finance big capital projects.
And frankly NYC, relative to it's global peers, has long been starved of capital financing from both it's state and the federal government. The decades the anti-urban politics starting in the 70's have left US's major urban center with just embarrassingly shoddy infrastructure that is entirely out of date, from top to bottom.
posted by zenon at 8:34 PM on August 11, 2021 [23 favorites]
The single two largest items in NYC's budget is education and cops.
LA has a separate school district, and it's budget is ~10 billion. So for comparison total LA budget should actually be closer to 20 billion, while the typical NYC budget, for twice as many people, was also roughly double LA's. And most of the remaining difference is what NYC spends on cops. Typically. I'll note NYW is also a separate tax body, sort of like LADWP.
So why has NYC doubled to around 80 billion? Cities tend to do infrastructure/hiring* in waves, and there is generally a push and a pull. The push is that every previous wave of infrastructure means 30 or 40 years later a new round will be needed to replace the aging facilities or staff. The pull is the cost of borrowing money is very low, so it's a good time to finance big capital projects.
And frankly NYC, relative to it's global peers, has long been starved of capital financing from both it's state and the federal government. The decades the anti-urban politics starting in the 70's have left US's major urban center with just embarrassingly shoddy infrastructure that is entirely out of date, from top to bottom.
posted by zenon at 8:34 PM on August 11, 2021 [23 favorites]
*staffing costs would include pension obligations of all those retiring teachers so this means that the budget ends up getting hit twice for a single position, which can make for a much bigger wave and impact on the budget.
The primary book we used was New York, Chicago, and Los Angeles by Janet L. Abu-Lughod.
posted by zenon at 8:45 PM on August 11, 2021 [3 favorites]
The primary book we used was New York, Chicago, and Los Angeles by Janet L. Abu-Lughod.
posted by zenon at 8:45 PM on August 11, 2021 [3 favorites]
Regarding revenues, a big difference between the two cities is that NYC collects way more in property taxes than LA does. For FY2021, NYC property tax revenue was projected at $30.85 billion, while LA was at about $2.4 billion.
A comparison between NYC and San Francisco might be a little easier, since the city of San Francisco is coextensive with San Francisco County. Btw, San Francisco actually has the highest per capita spending among major US cities (aside from D.C., which is obviously a special case).
posted by theory at 9:15 PM on August 11, 2021 [1 favorite]
A comparison between NYC and San Francisco might be a little easier, since the city of San Francisco is coextensive with San Francisco County. Btw, San Francisco actually has the highest per capita spending among major US cities (aside from D.C., which is obviously a special case).
posted by theory at 9:15 PM on August 11, 2021 [1 favorite]
My experience was more on the spending side than revenue budgeting but NYC has more costs than anywhere. DOE has over a million students in the system. Payrolls and pension obligations and debt service costs are pretty hard to fathom even in comparison to other big places (partly for reasons articulated here about city/county/metro wide provision of services).
Looking at the Adopted FY22 budget there’s about 67B in projected revenue with 30 from General Property, 33 from Other - which I’m fairly certain is how they characterize the city income tax which is significant in that it brings in a lot of money from the smallish proportion of really rich New Yorkers.
LA doesn’t have a city income tax, I believe, because CA doesn’t allow for it.
posted by Exceptional_Hubris at 5:14 AM on August 12, 2021 [1 favorite]
Looking at the Adopted FY22 budget there’s about 67B in projected revenue with 30 from General Property, 33 from Other - which I’m fairly certain is how they characterize the city income tax which is significant in that it brings in a lot of money from the smallish proportion of really rich New Yorkers.
LA doesn’t have a city income tax, I believe, because CA doesn’t allow for it.
posted by Exceptional_Hubris at 5:14 AM on August 12, 2021 [1 favorite]
One thing after re reading other answers. The 100B annual budget in NYC is operating only meaning it’s just for non durable costs like staff and maintenance. Construction and things the city can issue bonds and borrow for is not captured in that number. There is an additional 53B forecast over the next four fiscal years. Mostly for Schools, water, housing and transit.
posted by Exceptional_Hubris at 5:23 AM on August 12, 2021 [2 favorites]
posted by Exceptional_Hubris at 5:23 AM on August 12, 2021 [2 favorites]
The single two largest items in NYC's budget is education and cops.
Per this the NYC police budget is $11b, the education budget is $24b, and social services is $10b.
That's $44b of $100b. The rest of the departments (like fire fighting) combine to $15b, so we're up to $59b. I think pensions and debt service are the rest. Pensions are about $18b, debt service $7b so we are up to around $84b. I think 'general government' is the rest.
posted by The_Vegetables at 9:50 AM on August 12, 2021
Per this the NYC police budget is $11b, the education budget is $24b, and social services is $10b.
That's $44b of $100b. The rest of the departments (like fire fighting) combine to $15b, so we're up to $59b. I think pensions and debt service are the rest. Pensions are about $18b, debt service $7b so we are up to around $84b. I think 'general government' is the rest.
posted by The_Vegetables at 9:50 AM on August 12, 2021
LA (and California generally) have Prop 13, so their property tax collections are low comparatively and the city makes up it's budget with various taxes, with special taxes being 20% of the revenue (including business tax- largest at 6.2% and sales tax at 5.6%) vs property tax at 19%.
"Licenses, Permits, Fees, and Fines" makes up 11% of LA's budget and is growing. Yikes.
posted by The_Vegetables at 10:01 AM on August 12, 2021
"Licenses, Permits, Fees, and Fines" makes up 11% of LA's budget and is growing. Yikes.
posted by The_Vegetables at 10:01 AM on August 12, 2021
LA doesn’t have a city income tax, I believe, because CA doesn’t allow for it.
It's more complicated than that... there are cities within LA County that collect an additional percentage over the state and county rates, but LA City isn't one of them. Most of the ones who do mostly do it to round the tax rate up to 10% (Current State rate is 7.25, LA County adds 2.25 for a total of 9.5%)
"Licenses, Permits, Fees, and Fines" makes up 11% of LA's budget and is growing.
I'm not saying this isn't legit yikes-worthy, but there's big money in filming permits and like, everything is under construction right now. I suspect (hope?) that's where most of the growth is.
Other things LA County is responsible for financially that NY City might be:
- Social Services (Public Assistance)
- Public Health
- Children & Families
- All felony criminal prosecution
posted by ApathyGirl at 11:33 AM on August 12, 2021 [1 favorite]
It's more complicated than that... there are cities within LA County that collect an additional percentage over the state and county rates, but LA City isn't one of them. Most of the ones who do mostly do it to round the tax rate up to 10% (Current State rate is 7.25, LA County adds 2.25 for a total of 9.5%)
"Licenses, Permits, Fees, and Fines" makes up 11% of LA's budget and is growing.
I'm not saying this isn't legit yikes-worthy, but there's big money in filming permits and like, everything is under construction right now. I suspect (hope?) that's where most of the growth is.
Other things LA County is responsible for financially that NY City might be:
- Social Services (Public Assistance)
- Public Health
- Children & Families
- All felony criminal prosecution
posted by ApathyGirl at 11:33 AM on August 12, 2021 [1 favorite]
I'm not saying this isn't legit yikes-worthy, but there's big money in filming permits and like, everything is under construction right now. I suspect (hope?) that's where most of the growth is.
Filming permits maybe, but LA and CA in general are not US leaders in construction, and have not been for the past decade. Arizona, Texas, and New York typically dominate California in total units, and others states like Washington, Florida, and occasionally Colorado in per capita (even if CA builds more total units). Permitting costs for construction is often listed as a reason why.
posted by The_Vegetables at 11:40 AM on August 12, 2021
Filming permits maybe, but LA and CA in general are not US leaders in construction, and have not been for the past decade. Arizona, Texas, and New York typically dominate California in total units, and others states like Washington, Florida, and occasionally Colorado in per capita (even if CA builds more total units). Permitting costs for construction is often listed as a reason why.
posted by The_Vegetables at 11:40 AM on August 12, 2021
It's more complicated than that... there are cities within LA County that collect an additional percentage over the state and county rates
These are sales taxes no? NYC collects (well NYS collects on behalf of the city) a municipal income tax on people who live and work in the city. Don’t worry we also pay city and state sales taxes too.
posted by Exceptional_Hubris at 8:21 PM on August 12, 2021
These are sales taxes no? NYC collects (well NYS collects on behalf of the city) a municipal income tax on people who live and work in the city. Don’t worry we also pay city and state sales taxes too.
posted by Exceptional_Hubris at 8:21 PM on August 12, 2021
It's more complicated than that. ... There are cities within LA County that collect an additional percentage above the state and county rates.
These are sales taxes, no?
Yes, to clarify the point made by Apathy Girl, they are.
The sales tax rate paid by residents of Los Angeles is 9.5%, according to the sales tax software company Avalara. This includes the 6% state sales tax + the 2.25% Los Angeles County district sales tax + the 1% Los Angeles County local sales tax + the 0.25% Los Angeles City sales tax.
NYC collects (well NYS collects on behalf of the city) a municipal income tax on people who live and work in the city. Don't worry we also pay city and state sales taxes too.
See above. You are not alone.
posted by virago at 9:13 AM on August 14, 2021
These are sales taxes, no?
Yes, to clarify the point made by Apathy Girl, they are.
The sales tax rate paid by residents of Los Angeles is 9.5%, according to the sales tax software company Avalara. This includes the 6% state sales tax + the 2.25% Los Angeles County district sales tax + the 1% Los Angeles County local sales tax + the 0.25% Los Angeles City sales tax.
NYC collects (well NYS collects on behalf of the city) a municipal income tax on people who live and work in the city. Don't worry we also pay city and state sales taxes too.
See above. You are not alone.
posted by virago at 9:13 AM on August 14, 2021
I missed the edit window, but I meant to remove the last two lines of my last comment and replace them with this
I'm sure that Los Angeles wishes that it had the authority to levy a municipal income tax, given that the misbegotten Proposition 13 has decimated funding for the state's public schools.
Property tax rates in my home state of Maine are skyrocketing as a result of long-delayed revaluations coinciding with the arrival of people from other states who can work from home and pay cash for homes in what had been vacation destinations. People have floated Prop 13 as a solution. Spare us.
posted by virago at 9:28 AM on August 14, 2021
I'm sure that Los Angeles wishes that it had the authority to levy a municipal income tax, given that the misbegotten Proposition 13 has decimated funding for the state's public schools.
Property tax rates in my home state of Maine are skyrocketing as a result of long-delayed revaluations coinciding with the arrival of people from other states who can work from home and pay cash for homes in what had been vacation destinations. People have floated Prop 13 as a solution. Spare us.
posted by virago at 9:28 AM on August 14, 2021
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posted by lunasol at 6:41 PM on August 11, 2021 [7 favorites]