Monthly Archives: October 2009

Taxes

Win or Lose, the Yankees Are Going to Have to Pay in Philly

Posted by Bernard O’Brien, October 30, 2009

As the Yankees head to Philadelphia, players and coaches will have to give a little more than their best effort. And we don’t mean just playing harder on the field. We mean a small piece of their income.

Derek Jeter may recall that when he won his first World Series ring in 1996, a portion of his income as well as that of his Yankee teammates was subject to New York City tax regardless of whether they lived in the five boroughs. Visiting teams playing at Yankee Stadium also had to toss some cash into the city’s coffers. That’s because from 1971 until 1999, all noncity residents (including professional athletes) who derived income from working within the Big Apple owed what was commonly referred to as the New York City commuter tax. Players who live in the city are still subject to the local income tax on residents.

New York and Philadelphia are among a handful of U.S. cities that still levy a tax on wages earned from work (which includes playing professional sports) performed within its borders. But unlike New York City’s income tax, Philadelphia’s wage tax covers nonresidents, too. In other words, the Philadelphia Phillies’ players (and all visiting players coming to compete in Philadelphia) still see a portion of their not insignificant wages taxed by the City of Brotherly Love.

Philadelphia is hardly alone in taxing nonresident professional athletes. All states and the handful of cities with income tax systems that cover nonresidents take a piece of player earnings based on the number of days they work there.

Using information provided by the Philadelphia Revenue Department, we estimate that each game the Bronx Bombers play in Philadelphia during the upcoming World Series will result in the Yankees pitching in about $25,000 in Philadelphia wage taxes. If the series goes at least five games, the three games played in Citizens Bank Park mean the Yankee players will pony up roughly $75,000 for Philly’s revenue stream.

While players that live outside New York City won’t be on the hook for paying taxes to the city on income earned during games in the Bronx (they will owe New York State income tax), that doesn’t mean City Hall’s tax coffers will be bereft of a piece of the World Series action. We’ll take our share in other ways, such as a higher sales tax than in Philly. We just won’t get a hit off the players’ earnings.

Federal and State Aid, Social and Community Services

City’s Food Stamp Enrollment Surges

1 Comment

Posted by Paul Lopatto, October 22, 2009

Earlier this week it was widely reported that the number of homeless families had hit a record high in the city. Less noticed has been another record increase: As of August there were nearly 1.6 million New Yorkers on the food stamp rolls.

The rapid increase in food stamp enrollment began in early 2008, following years of relatively slow growth. From January 2008 through August 2009 food stamp enrollment increased by 354,000 persons, expanding the caseload by nearly 30 percent. Based on the current average monthly grant, the increase of food stamp recipients over the same period should result in about $680 million annually in additional federal assistance to low-income city residents, a level that’s juiced by the increase in benefits under the stimulus act.

While food stamp enrollment has fluctuated significantly over the last few decades, the pace of growth over the last year and a half has been unmatched since the early years of the program in the 1970s. It is likely that some of this growth can be attributed to policy initiatives by both city and state officials to increase the share of eligible people who enroll in the program.

At the city level, the application has been shortened and the hours of operation at some food stamp offices has been lengthened. As part of a statewide initiative the city’s Human Resources Administration has also been implementing new systems that make better use of information technology to allow for off-site electronic filing of applications and supporting documents, and recertification of some cases over the phone. In 2008 the social services agency also performed a data match to identify Medicaid recipients who might be eligible for food stamps but never applied, and then did a targeted outreach campaign to encourage them to fill out applications.

While these outreach efforts and initiatives to ease the application process helped boost enrollment, the extensive job losses and resultant income decreases experienced by large numbers of New Yorkers over the last year have significantly increased the pool of people who are eligible for assistance. Evidence from previous economic downturns, as detailed in IBO’s 2008 report Most Food Stamp Recipients No Longer Also Welfare Recipients, suggests that further labor market declines are likely to lead to continued growth in the food stamp caseload. Comparisons with prior recessions, however, serve to highlight the unprecedented magnitude of the recent caseload increases. Monthly food stamp enrollment growth since September 2008 has occurred at three times the rate seen in the last downturn that began in 2001.

The combined effects of the more user-friendly policies and rising economic distress have pushed the city’s food stamp caseload beyond its previous peak of 1.46 million people in April 1995. But current recipients differ from their earlier counterparts in one important respect. In 1995 nearly 80 percent of food stamp recipients also received public assistance; today only about one-quarter also receive welfare benefits.

This separation of food stamps from public assistance began with the implementation of welfare reform policies in the mid-1990s and has continued since. Recent caseload numbers offer further confirmation of the severing of these programs. From September 2008 through August 2009, with the local job market faltering, the number of city residents receiving food stamps increased by 258,000 or 20 percent while the public assistance caseload increased by only 13,000 or 4 percent. This suggests that while negative public attitudes and restrictive government policies toward welfare persist, food stamps have become an increasingly acceptable form of low-income assistance.

This trend is not unique to New York; federal statistics indicate that the divergence of these two key income support programs is progressing on a nationwide basis. From January 2008 to July 2009 food stamp enrollment increased by 29 percent to a record high 35.9 million recipients. While federal welfare caseload numbers are not yet available for 2009, the data indicate that during 2008, with the national recession underway, the number of food stamp recipients increased by 15 percent compared to only 4 percent for public assistance. Although high levels of unemployment could eventually lead to a more rapid movement of out-of-work people onto the welfare rolls, the delinking of food stamps and welfare is likely to persist.

Environment, Fees and Fines

Two Decades Later, City’s Water Metering Still Not Universal

1 Comment

Posted by Alexis Arinsburg, October 5, 2009

Even as the city ramps up its initiative to install wireless transmitters for water meters across the city, thousands of city properties still have no meter at all or have a meter that is not being used for billing. Two decades after the city’s Department of Environmental Protection (DEP) first began installing water meters through the Universal Metering Program, 49,595 accounts, or 6 percent overall, are still not part of the system.

That’s a bit better than in 2006, when 8 percent of accounts were still being billed under the old frontage system, which uses a schedule of fees based on building size and the number of sinks, showers, tubs, and toilets to determine the water bill. A small number of building owners still pay on a per apartment basis.

The most recent deadline for getting all water accounts metered was June 30, 2009. The deadline has now been pushed out to June 30, 2012. Why the delay and what is the city doing to make water metering truly universal?

In the wake of a severe drought, the city began installing water meters in 1988 as a way to reduce water usage by charging consumers for the amount of water actually used. It also helped the city comply with state water conservation requirements. The Universal Metering Program was to be completed in 10 years.

At the program’s inception, Department of Environmental Protection officials acknowledged that there would be challenges to metering all its customers immediately. Landlords complained about the expected cost increase due to metered bills, especially if they owned buildings that were home to large families or had plumbing in poor condition. Progress on universal metering also encountered some unexpected hurdles, including a 206-count indictment for fraud and labor law violations against the Kentucky-based company the city contracted with to do a large number of the meter installations. Flawed water bills have also been an on-going problem, likely undermining some customers’ confidence in making the transition to metering.

To address owner concerns about a jump in costs due to metering, the city has created several programs to ease the switch. There are currently 29,962 customers in the Transition Program for buildings with six or more apartments. Under this program a meter is installed but bills are still generated based on the frontage system. The idea was that owners would be in the program for up to a year and prepare for the switch to metered billing. The program was supposed to expire in 1997 but was instead extended annually until this year, when the deadline was pushed to 2012.

A New York State audit from 2008 found “no indication DEP was routinely transferring accounts from the Transition Program to metered billing.” It is reasonable to assume that Transition Program customers who remain on frontage billing do so because it is less costly than switching to metering.

There’s also a Pre-Transition program with 761 customers. While similar to the Transition Program, accounts in Pre-Transition had meters installed between 1988 and July 1, 1992, but owners pay a water bill based on $821 per apartment. Additionally, all accounts in the Pre-Transition program should have undergone an inspection or audit to ensure that there were no major leaks, and if leaks were found, they were promptly repaired.

There are currently about 700 owners who, after leaving the Transition Program, have enrolled in the Conservation Program for Multiple Family Residential Buildings. The program, established in 2001, remains a long-term alternative to metering for some owners of buildings with six or more apartments. To be eligible, owners must take steps such as converting 70 percent of a property’s toilets, faucets, and showerheads to low-flow fixtures. Owners are subject to periodic conservation audits by DEP. To encourage additional participation and to reduce the expense of installing fixtures that comply with the program’s conservation requirements, DEP is considering offering rebates for the installation of low-flush toilets, much as it did in the early 1990s.

About 8,600 customers currently prefer to pay a 100 percent surcharge on their frontage bill rather than have a meter installed. These customers, typically single-family residences, don’t qualify for either the transition or conservation programs. The Department of Environmental Protection is exploring ways to encourage these customers to agree to have meters installed and convert to metered billing. As with the accounts that remain in the Transition Program, presumably most of the customers still pay less than they would under metering, even after paying twice their frontage charge.

That leaves 9,500 customers still billed on a frontage basis who are not paying a surcharge nor are they enrolled in the transition or conservation programs. The Department of Environmental Protection provided no further explanation when IBO asked about these accounts.

When it comes to achieving the goal of universal metering first announced more than two decades ago, the city is still swimming upstream.