The growth in local government costs has slowed substantially since 2008.
Why is this important?
Local governments—county, town, village, school district and other special districts—provide many essential services, from collecting waste to protecting citizens to educating children. About three-quarters of the costs of these services are borne by local taxpayers and users through local property taxes, sales taxes and fees. Most of the rest comes from different state and federal programs.
Both the quality and cost of these services are important to Long Island’s economic health and quality of life, and getting the balance right is perhaps the most important function of local government. Long Island is a high-tax region, and surveys conducted by the Long Island Index repeatedly show that taxes are the number one concern of Long Island residents. These include federal and state taxes, but local property taxes are a large portion of the tax burden and are driven by the cost of local government.
How are we doing?
From 2000-2008, government expenditures grew much faster than inflation at all levels of local government. The budgets of towns and fire districts grew by over 6% per year, nearly twice the 3.2% increase in the Consumer Price Index. Counties, villages and school districts all grew by about 5.5% annually, and the two cities of Long Beach and Glen Cove grew by an average of 4.1%.
Since 2008, growth has slowed substantially, and in the case of the two counties, expenditures have declined in absolute terms by an average of 3% per year. The budgets of towns and villages have grown at or below the rate of inflation. School districts and fire districts have continued to grow at twice the rate of inflation. The fiscal problems of the two counties have caused them to make deep cuts in expenses. State-mandated cops on the growth in property taxes have presumably held down the rate of growth in town and village expenditures.
Local governments spend a total of $7,566 per person, 3% less than in 2008 but 22% higher than in 2000. Adjusted for inflation, services from all types of local governments cost $6,210 per person in 2000. By 2008, this had grown to $7,790 before declining by $78 per year between 2008 and 2011.