When New York Mayor Zohran Mamdani debuted his first budget last week, the $127 billion price tag prompted a series of artless and often inaccurate comparisons on social media with the spending of the state of Florida ($117 billion, with three times as many residents) and other government units as far away as Tokyo.
Governor DeSantis of Florida has no responsibility for trash collection or legions of firefighters, just as Mayor Mamdani has no responsibility for his state’s prison system or vast natural areas. The Japanese prefectures are also not comparable to the five boroughs of New York City.
None of this is an excuse for Gotham’s excesses. Rather, the quest for anger-clicking apples-to-oranges comparisons threatens to numb Americans to even more extreme parts of NYC’s spending — and the lessons the rest of the country should learn.
The largest part of New York’s budget, the public school system, is best seen as an adult union program, shielded from criticism by what is often a greater emphasis on equity than on results. It’s on track to cover roughly a third of the city’s spending next year.
The most recent federal data, for the 2022-2023 school year, estimates NYC’s spending at $33,387 per student. None of the nation’s other 90 largest districts peaked at $24,000. The next largest, Los Angeles, spent $22,606, followed by Miami-Dade at $13,138, Chicago at $22,699 and Nevada’s Clark County schools at $11,569.
Fourth-graders in Miami-Dade outperformed their New York City counterparts in the most recent federal standardized math and reading tests; Eighth graders in the two districts achieved similar average scores, even though NYC spent two and a half times as much per student.
NYC’s high spending is partly due to the recent decline in public school enrollment. Student enrollment dropped in the lead-up to COVID and plunged as families left the system (and often the state altogether). The number of first-graders dropped from 87,000 in 2015 to fewer than 70,000 last year — and an increasing share of them are attending charter schools, which are publicly funded but privately run.
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My colleague Danyela Egorov notes that NYC has at least 100 city-run schools with fewer than 150 students. Most government agencies facing such dissatisfaction would have undergone a radical transformation by now. The teachers union risked losing political influence if its workforce were to shrink, so Albany forced the city to hire thousands of additional teachers to fill empty classrooms, under the guise of shrinking class sizes.
Labour’s stranglehold is not limited to the Department of Education. Beyond the highest echelons of managers, the terms and conditions of virtually every city employee are codified in a union contract — part of the lasting and costly legacy of Mayor Robert Wagner, who in the late 1950s ordered city agencies to enter into contracts with employee unions.
The result is almost caricatured inefficiency, as even the smallest changes in the way agencies function and how services are delivered have to be negotiated. Union agreements until recently prevented residents of the city’s public housing from receiving repairs after 4:30 p.m. (or on weekends); Another union’s control of lifeguard jobs in the city has forced the city to leave some beaches closed.
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NYC is also one of the few remaining public employers that offers premium-free health insurance not only to its employees, but also to its retirees. (Even New York’s state government requires its employees to cover at least 12 percent of the costs).
When police officers and firefighters become eligible to retire at half pay and keep their benefits after 20 years, that means the city’s taxpayers could be on the hook for the current equivalent of nearly $1 million in health care benefits alone before that retiree reaches Medicare age — and for additional coverage afterward.
The city’s unions, meanwhile, are pushing state lawmakers to make even non-uniformed workers eligible for a full pension at age 55 and cut back on the contributions they have to make.
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The problem isn’t that NYC is spending money on one benefit or another. The “union town” mentality reflects an institutional resistance to efficiency; taxpayers and the quality of services provided are an afterthought. A city whose unions are powerful enough to force it to absorb 100 percent of the increase in health insurance costs is also unlikely to allow, let alone embrace, new opportunities for automation or other cost savings.
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New York’s unique collective bargaining law requires that unionized workers continue to get raises even after their contracts expire, leaving elected officials little leverage to implement changes that would improve service or otherwise reduce costs.
On top of this bloat, NYC also goes above and beyond to offer services that many other communities couldn’t imagine. The price of the city’s newly expanded housing voucher program is poised to continue rising, rising by $2 billion more than originally budgeted over the next two years. Meanwhile, New York continues to blur the line between public education and government child care, expanding preschool offerings to two-year-olds as it strives for universal child care.
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Mamdani’s ambitious spending agenda has been temporarily derailed as he grapples with the fact that city officials have spent more than they collected for years, a risky proposition absent a recession or emergency. For the new mayor it is a painful lesson in fiscal reality.
For the rest of America, it’s an opportunity to learn from and avoid NYC’s bad choices.
