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When New York City Mayor Zohran Mamdani debuted his first budget last week, the $127 billion price tag sparked a range of inartful, and often inaccurate, comparisons on social media with spending by the state of Florida ($117 billion, with three times the population) and other governmental units as far away as Tokyo.
Florida Governor DeSantis doesn’t oversee trash pickup or legions of firefighters, just as Mayor Mamdani isn’t responsible for his state’s prison system or its sprawling wilderness preserves. Nor are Japanese prefectures comparable to New York City’s five boroughs.
None of this excuses Gotham’s excess. To the contrary, the quest for rage-clicks with apples-to-oranges comparisons risks numbing Americans to even more extreme parts of NYC’s spending — and the lessons the rest of the country should draw.
The biggest piece of the NYC budget, the public school system, is best viewed as a union jobs program for adults, shielded from scrutiny by what is often a greater focus on equity than on outcomes. It’s on track to make up roughly one-third of city spending next year.
The most recent federal data, for school year 2022-23, pegged NYC’s spending at $33,387 per pupil. None of nation’s other 90 largest districts topped $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 posted comparable average scores, even as NYC spent two-and-a-half times as much per student.
NYC’s high spending stems in part from its recent decline in public school enrollment. The number of students was sliding in the leadup to COVID and dove as families exited the system (and often the state altogether). The number of first-graders sank from 87,000 in 2015 to fewer than 70,000 last year—and a rising share of them are attending charter schools, which are publicly funded but privately managed.
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My colleague Danyela Egorov notes NYC has at least 100 city-run schools with fewer than 150 students. Most government agencies facing such dissatisfaction would by now have undertaken a radical transformation. The teachers union risked losing political clout if the workforce shrank, so it got Albany to force the city to hire thousands more teachers to backfill empty classrooms, under the guise of shrinking class sizes.
Labor’s stranglehold isn’t limited to the Department of Education. Outside the highest echelons of managers, virtually every city employee has his or her terms and conditions of employment set by a union contract — part of the enduring and costly legacy of Mayor Robert Wagner, who ordered city agencies to ink contracts with employee unions in the late 1950s.
The result is almost cartoonish inefficiency, since even the smallest changes to how agencies run and how services are delivered must be negotiated. Union deals until recently prevented residents of the city’s public housing from getting repairs after 4:30pm (or on weekends); another union’s control of city lifeguard jobs has forced the city to leave some beaches closed.
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NYC is also one of the few remaining public employers that provides premium-free health insurance to not only its employees but also its retirees. (Even New York state government requires its employees to pick up at least 12 percent of the cost).
When police officers and firefighters are eligible to retire at half-pay and keep their benefits after 20 years on the job, it means city taxpayers can be on the hook for the current equivalent of almost $1 million in healthcare benefits alone before that retiree hits Medicare age — and then for additional coverage after.
The city’s unions are meanwhile pressing state lawmakers to make even non-uniformed workers eligible for full pensions at age 55 and to slash how much they must contribute toward them.
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The problem isn’t that NYC splurges on one benefit or another. Its “union town” mindset reflects an institutional resistance to efficiency; taxpayers, and the quality of the services being 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 unionized employees to keep getting raises even after their contract has expired, leaving elected officials with little leverage to push for changes that would improve services or otherwise bring down costs.
It’s on top of this bloat that NYC also goes above and beyond offering services many other communities wouldn’t imagine. The price of the city’s newly expanded housing-voucher program is poised to keep ballooning, rising over the next two years by $2 billion more than originally budgeted. Meanwhile, NYC keeps blurring the line between public education and government childcare as it expands “pre-kindergarten” offerings down to two-year-olds as it pursues “universal childcare.”
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Mamdani’s ambitious spending agenda has been temporarily derailed as he grapples with the fact that city officials for years spent more than they collected, a risky proposition outside of a recession or emergency. For the new mayor, it’s a painful lesson in fiscal reality.
For the rest of America, it’s a chance to learn from, and avoid, NYC’s bad choices.
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