This isn’t Obama territory yet, mainly because the proportion of revenues to debt isn’t as high, it’s still only double annual revenues, that’s Bush league debt, but it does show that New York City is headed down the same path as the rest of the urban technocracies. Bloomberg isn’t any better at economic planning, he just has more revenue to play with, thanks to Wall Street and the tourism trade. Take those two things away and the city is toast.
When the mayor took office in 2002, the total outstanding debt of the city was $55.2 billion. This year, the Citizens Budget Commission estimates the total reached $110 billion. The increase: 100%! You can track the changes from 2002 to 2012 in this nifty chart from the Citizens Budget Commission.
The Independent Budget Office estimates that interest expense will soar from $6.1 billion in the current fiscal year to $6.5 billion next year and $7 billion in 2016 (adjusted for various financial maneuvers). Needless to say, that is at a much greater rate than the increase in revenue.
Like every other over-governmented city, New York City is suffering from pension shock. Pension expenses increased by 519% since 2002, accounting for a chunk of the debt and the spending involved.
Bloomberg tried to become the education mayor and school spending is now devouring almost 20 percent of the New York City budget. But that’s a small bite compared to the pension costs that are going to kick in down the road. Worse still it appears that there aren’t any real educational results to show for it that can’t be put down to promotion and number juggling.
Education is now the city’s single biggest area of expenditure in its ten year capital plan. Ten times more than its criminal justice system. Three times more than bridges and highways. Twenty times more than its hospitals. Forty times more than its firefighters. Education spending is eating the future of New York City alive.
Salaries and wages have tripled since 2001 while the number of employees has dropped. Like so many urban technocracies, New York City is discovering that it cannot afford its government employee class. For now the city has plugged the gap with hundreds of millions of dollars in shakedowns of companies. But if those companies leave, then there will be no more cards left to play.