Job Creation in Suffolk County Still Lagging

Finally, a second classmate from my professional certification program has found employment. Twelve more to go. In these troubling times, the employment process is very hard and very slow. She, like the first, had to meet with an extraordinary amount of people within the organization, eleven in her case, in order to gain admittance. This is a woman of extraordinary savvy with almost two decades of experience in the technology realm and she more than deserved the opportunity. But, she had to commute to Manhattan to get it after working locally for the past 15 years. (The first classmate accepted an opportunity in Nassau County.)

Even though there are signs that there is some easing in the job market, job creation in Suffolk County is still lagging. Marquee companies like CA are still laying off and others like Motorola (formerly Symbol) and Nortel Networks are hanging by a thread. The rest simply have hiring freezes in place. Even the County itself has implemented a hiring freeze. But most importantly, many worthy development projects have completely stalled; the type of projects that could bring good jobs to the region, improve tourism and create affordable housing. The County needs to step up its efforts to remove the obstacles to growth, now more than ever.

Local Unions Still Resistant to Concessions Despite Bad Economy

On a local level, Governor Paterson recently proposed the layoffs of nearly 9000 state workers if the union does not make any attempt to help him find $500,000,000 in cost savings; the MTA voted today to raise fares approximately 23%, raise bridge tolls, cut services and layoff workers unless the state votes to help bail them out and Suffolk County Executive Steve Levy has sent out 2,200 notices to some county workers putting them on notice for the potential layoff of 386 persons if the unions do not agree to some concessions.

As the State and local governments struggle to bring their budgets in order and minimize their looming deficits, the biggest area of contention are with the unions. Note here that I am speaking only about unions that represent employees who work in any public service sector supported by taxpayer dollars; the United Auto Workers, the teamsters and the like who work for large private corporations fall into a different category for purposes of this discussion. Anyhow, we must admit that the generous union contracts entered into during the previous boom years are crippling state and locals governments alike in their ability to trim their budgets as they stare down the failing economy.

Now it may not seem from any of my previous posts that I have any support for unions but I do believe that unions have a noble purpose in providing employment security for many citizens. Certainly this purpose was critical during much of the 20th century to balance out huge employee/employer discrepancies and abuses. Yes, we needed unions to reset the playing field and that did take place. Now, unions are reaping generous benefits above and beyond what employees of private enterprise could ever hope to attain. In addition, these private employees most shoulder the higher tax burden required to pay for all of those union perks.

I believe that a shift in the balance between the benefits of public and private employment requires an re-evaluation of union benefits. So, at the very least, unions should be reasonable when it comes to economic crisis. For the majority of New Yorkers who are not in a union, the axe could come at any time. While they work fearful for their livelihood, union members have the advantage of negotiation before the axe falls. Yet, union members are acting like the Wall Street folk, defending their entitlement to their generous contracts.

Recently, union members protested County Executive Levy's proposal to cut some county jobs as they have the right. But, listening to some of their defense made it hard to sympathize. Many lamented with indignation how it was unfair for them to work within an environment where their jobs were threatened. Hello! Times have changed. If we continue to pay you, our whole government welfare is on the line. When the analogy is used by Obama and Bernanke alike that when your neighbors house is burning - in an upside down mortgage or potential foreclosure - we have to save them with a housing bailout to save the neighborhood. How about public service union employees realizing that if they don't sacrifice a little now, the future could be bad for all of us?

The Suffolk County employees are being asked to accept a lag payroll, meaning that they will sacrifice 10 days of pay now to be paid at a higher rate when they retire. They are still going to get the money, just not now. One Suffolk employee even suggested raising taxes as being better than laying of people. Huh! For God's sake, none of the concessions sound so bad if you still get to keep your job. And, what about the ones who do end up being laid off? They will still get their pensions. The rest of us have to rely on our own 401k/IRA savings, which averaged just $15,000 per employee by 2008 estimates though I'm sure they are worth considerably less now with the market so topsy-turvy. This is pitiful compared to the value of a union pension.

While private employees have to save for their own retirements, public employees earn retirement credits for each year that they work. It is hard to feel bad for them right now when a large portion of their health insurance is being paid and they receive generous holiday and vacation days. They had a good run but if we all have to pay the piper, then they should too. How can they still remain reluctant to do so?

Brain Drain

Long Island is suffering from a brain drain, and I'm not talking about the thousands of young people 24-39 who are forced to leave each year because of the high cost of living here or that employers are concerned about the future of the Long Island economy without this vital pool of talent. I am talking about my brain when I read the news.

Maybe it is just me but I can't seem to get enough information in any one Long Island publication to satisfy my brain. Yes there is island-wide coverage provided by Newsday and News 12 but their news gathering is dominated by shallow sensationalist stories that do not adequately feed an inquiring mind. Maybe, I am asking too much. Maybe Long Islanders do not really require much depth in their news coverage and I am just barking up the wrong tree.

Maybe it is just a case of Long Island being so localized, so carved up into so many pieces; villages, towns, school districts, taxing districts and special districts that it is impossible to do a broad coverage of news. Don't get me wrong, each of these tiny pieces has its own local publications. Today I read the Long Island Business News, The Long Island Press, the Long Island Advance, The Smithtown News, The Long-Islander, The East Hampton Star and a host of other little dailies looking for information. Because of the sheer volume of teeny tiny weeklies, I have to limit myself to Suffolk county publications because I reside here. For those of us in Suffolk, Nassau county is a whole other planet. Enough said.

Maybe I am just complaining because of the sheer amount of publications I have to troll through just to get all the news and information that I crave. I wish there was an easier way.

Jellyfish Invade Robert Moses Beach

Today the water temperature at Robert Moses was perfect; the jellyfish thought so too and showed up in droves. Over the course of this summer, I have visited the ocean beaches from Robert Moses to Montauk, and the appearance of jellyfish has gone from occasional sightings to serious density. Today at Robert Moses, we were barely able to get into the water.

Now I’ve seen and heard about jellyfish in the Peconic Bay and in the Long Island Sound over the years. There was much ado about their earlier arrival and denser presence in bay waters this summer. Global warming was the cause they all chimed but then I see that global warming was blamed 10 years ago too.

I personally had not seen any jellyfish in the ocean until this year so up until now I was under the impression that they were strictly bay phenomena. Of course, I was wrong. It turns out that jellyfish have waxed and waned in the ocean over the years and this just happens to be one of those plentiful years. So, we have to be careful but it is not the end of the world.

Undocumented Workers Leave For Greener Pastures

You know things are bad in the Long Island economy when the undocumented immigrant workers start to leave. Anecdotal evidence from the front lines of community resources that provide services for immigrants suggests that many are leaving for greener pastures. Those of us who regularly pass hiring sites may realize that the throng of willing and able workers is all but dissipated.

For the past few years, County Executive Steve Levy has led a charge to crackdown on undocumented immigrants. Suffolk County recently passed a law that requires county contractors to use e-verify, a free internet based service run by the Dept of Homeland security, to certify employment eligibility of their workers. All of the bellyaching about immigrants taking jobs, burdening the school systems, emergency rooms and the like that pitted Hispanic community groups against one another and the county has met a greater decider – the economy.

The sole motivation for any undocumented worker to defy U. S. Law Enforcement and take a back-breaking journey to America is work. If they cannot find work in a community, they will move on to where the jobs are. Perhaps their presence or lack thereof can be viewed as yet another barometer of the economic reality in any community. When times are good, we will see them and complain, and when times are not, they disappear, depriving us of the access to cheap labor that we have all come to depend on. It is a double-edged sword.

TGIF...

...And not a moment to soon. Today I put the news to rest and focused on the incoming family ready to have some good old fashioned Long Island fun. It was a long day of preparations; somehow the house is never ready for guests. They arrived to home-made sangria and a delicious meal featuring fresh vegetables, seafood, whole grain pasta and whole grain bread. Thankfully, most of my family eats well and are conscious of avoiding high fructose corn syrup, packaged foods, white flour based products and fast food.

I am always happy to see my mom and siblings. My mom is happy to enjoy the time with her grandchildren as much as they do with each other. We stay up too late and wake up too early but we always have the energy to roll out to the beach. That is the one of the true beauties of living in Suffolk County, the vacation makes itself, you only have to show up.

Summertime and the Living...

Today I was thinking about summer and how much I love the summer and how much I love summer on Long Island. So, as the financial markets hit hurricane territory with another round of treasury-funded bailouts and billions more in loans to struggling financials, I was going to focus on enjoying the summer. Yet how can I ignore that since March, with the government bailout of Bear Stearns, the treasury has been putting out financial fires and plugging leaks with ever-increasing loans to the financial markets. And can it stop? No. Consider that Fannie Mae and Freddie Mac guarantee and/or insure up to $5 trillion dollars in domestic mortgages. They cannot fail, not over the Treasury's dead body anyhow.

I started this week talking about one of my favorite events of the summer on Long Island so I was going to push the financial turmoil aside and not dwell on the doom and gloom, as I am wont to do. Alas, I cannot dismiss the nagging question, "Where is the money coming from? The U.S. is nearly $10 trillion in debt and it has been running on deficit spending for years. Do U.S. residents not realize that we make up the shortfall by borrowing, much of the funds coming from foreign governments and institutions? The treasury technically does not have the money to be the puppet master; propping up the economy with rebate checks, propping up the financial markets with loans, propping up the housing market with tax breaks and lest we forget, the ever escalating tab for the Iraq War. In addition, the Treasury has already borrowed the entire trillion dollar Social Security surplus and needs to repay Social Security when its current funds dwindle beyond sustenance amount. Lastly, all of this occurred amidst enormous tax-cuts but I digress…

Today was a simple meander through eastern Suffolk County within reasonable driving distance. We were looking for closer destinations where we could enjoy ourselves since in previous years we had no economic concern for our far flung destinations. To the tip of the North Fork, the South Fork, the North Shore, the South Shore and the in-between, we simply named it and we went. So we have to set our sights within reason not only to economize but also to conserve gasoline. We decided to check out a few bayside villages/hamlets that we had previously skipped over in our quest to visit the even more glorious. We enjoyed the views of the bay and the biggest bonus for the children, plenty of playgrounds on the water. Top that off with some home-made ice-cream and we thoroughly enjoyed our dollar-wise weather-wise perfect day.

Starbucks Wake Up Call

Starbucks, the epitome of coffee indulgence, is scaling back, closing 600 company-owned stores that are underperforming. Most of these stores have been open for less than 2 years. How quickly the tide turns. I have to admit, I was a Starbucks fan back when I was single and flush with cash. Starbucks introduced many of us to a better cup of coffee and there was no going back for me. I gave it up a few years ago, opting to make my own espresso at home and to frequent Starbucks only on special occasions because it is an expensive cup of coffee. I am surprised that Starbucks overbuilt by that many stores considering that their competition had intensified by 2006. Bad management happens all the time, doesn’t it? Then again, Americans were still living large in 2006 and happily willing to pay for a higher-end lifestyle, bigger homes, fancy kitchens and of course, fancy coffee.

Starbucks wasn’t the only one expanding though. In the same 2 years, I have seen a marked increase in the number of Dunkin' Donuts/Baskin Robbins combination stores here in Suffolk County. They were ready and waiting just when many of us started to be priced out by Starbucks. When Dunkin' Donuts started to add its own versions of espresso-based coffees, it was a cheaper alternative to Starbucks for the wallet-conscious but lately it seems to be getting pricey as well.

No matter how diligent we are, there are still plenty of mornings when we are running late or have an early appointment and towing groggy children when we are simply going to have to buy a cup of coffee. That rich Starbucks taste has forever spoiled me and though I am always trying to find a cheaper alternative, it is difficult for me to settle for the regular stuff, no matter how hard I try.

Suffering Life: Suffolk Life Newspapers Closing After 46 Years

I have not been out on Long Island long enough to experience the heyday of Suffolk Life. But, I have been here long enough to appreciate the wealth of information that I gained from reading it, every single issue since I moved here.

I always read the "letters to the editor" to gauge community reaction to news and events unique to Suffolk County. And I definitely read Wilmotts and Why Nots to see what “Mr. David” had to say. I didn’t always agree but I admired his spunk. He reminded me a little of a Lou Dobbs type figure, a fist-thumping champion of his cause. It was pretty clear that he held the well-being of Suffolk County near and dear.

I realize now that I took for granted its arrival every Wednesday without fail, never absent, never late. I know there are other local papers out there but they are town or village specific. No other paper, not even Newsday covered the scope of Suffolk County to the extent of Suffolk Life. It will be sorely missed.

Reality Check: Affording a Home on Long Island

Much of the housing meltdown can be attributed to a flagrant disregard for the general guidelines of housing affordability that have been in place for decades. Many argue that an easing of the rules was necessary to increase homeownership especially in high-cost regions like Long Island. No one can deny that we were all excited that homes were selling like hotcakes and that everyone’s equity was increasing allowing us all oodles of cash to spend. Spending is great for the economy, a win-win situation.

Unfortunately mortgage brokers and other unscrupulous lenders turned that ‘easing’ inch into a yard and here we are. Now that lenders have returned to strict adherence of the guidelines it appears that suddenly no one can get loans. Financial experts have taken to assuring us that the credit crunch is overblown and that those with good credit can still get loans. But given the current conditions, how much house can anyone really afford on Long Island?

Most of us are still of the mindset that a household making $100,000 is doing well. According to the real estate affordability math, that is simply not the case when it comes to homeownership on Long Island. The basic rule of thumb is/has been that aspiring homeowners should spend no more than 28% of their gross income on housing and have a 10% down payment. (Since we are only finding a rough estimate of affordability, we can disregard the other factors that do come in to play like creditworthiness; the amount of long term debt such as student loans, credit cards, car payments and the like.)

Using simple math, 28% of $100,000 allows for $28,000 a year on housing costs or about $2330 a month. If we subtract an approximate monthly average of $500 for real estate taxes and insurance, $1800 a month is available for principal and interest. Assuming an interest rate of 7%, our $100k earning homeowner(s) can borrow $270,000, essentially affording a house for $300,000 with a 10% down payment of $30,000.

Considering that the median home price is currently $440,000 in Nassau County and $360,000 in Suffolk County, this potential homeowner faces a difficult search. The median prices have dropped at least $15% from their highs but unfortunately they are still too high for most of us. Many of us could not afford to buy the very homes that we are in if we were starting out on that path today given the current prices. Somewhere along the line the ratio of the median income to the median home price went way out of whack. We will have to be patient while the market corrects.

Markets rebound, they always do…well, they always have.

Who is the Middle Class?

As most of us know, the definition of middle class is far from simple. There is no official government definition but rather a broad analysis of income based on the census data.

“Based on 2005 Census Bureau reports, some 40 percent of the nearly 115 million households in the U.S. earned less than $36,000 a year. That represented just 12 percent of all income. The 40 percent on the next rung up the economic ladder took in between $36,000 and $91,705 — or about 37.6 percent of all income. The top 20 percent, who made $91,705 or more, collected half of all income” (MSNBC 10/17/07)

One could conclude that the middle class is the 40% of people making between $36k and $92k. Considering that the 2007 federal guidelines state that the poverty threshold for a family of four is $20,650, this definition makes sense. However, this data would make it seem that many of us on Long Island are well-off. Enter The Fiscal Policy Institute (FPI), a nonpartisan research and education organization that focuses on the tax, budget, economic and related public policy issues that affect the quality of life and the economic well-being of New York State residents. According to their press release dated June 12, 2008 the federal poverty level is a poor indicator by which to base affordability standards.

“The federal poverty level is the same whether the family lives in Manhattan or rural Mississippi. That makes it an especially inappropriate measure for New York, where the cost of living is high…In New York, the basic budgets are higher than in most other states, and range from just over $41,000 for a four-person family in rural areas to over $60,000 in Nassau and Suffolk counties.”

This data probably confirms what most people living on Long Island already know. If you live on Long Island, earnings of 90-100k plant you firmly in the middle class even if census data puts you in the top 20% of earners for the United States. The teachers, policemen, county officials and other public service personnel tell us this repeatedly when defending their 90-100k salaries - without these salaries they cannot afford to live on Long Island. I certainly agree with this assessment if you read their defense to mean that they cannot afford the middle class lifestyle on Long Island. (note: My problem with their earnings is that they get these salaries along with lucrative benefits and pensions all at the taxpayer’s expense.)

Make no mistake about it, if $60k is needed to cover basic needs then many middle class Long Islanders are struggling (as we know they are). However, federal poverty level guidelines disqualifies them for any public assistance. When calculating these guidelines, the government does make regional adjustments for Alaska and Hawaii. Based on the FPI data, the government definitely needs to reconsider its classifications and extend those regional adjustments to include other high cost of living states like NY and California.

How is the Middle Class on Long Island surviving?

How is the middle class on Long Island surviving? I want to know. How is everyone managing the tax burden, the oil and gasoline bills, housing costs and basic necessities? Some years back, my husband agreed to a 2 hour commute to NYC for work so that we could purchase an affordable house way out here in Suffolk County. We deliberately made sure that we were not going to be house poor. To that end we locked in a low rate fixed mortgage and spent years fixing up the house ourselves to limit renovation costs. We even replaced the boiler and put in new windows to save on heating costs. We spent frugally and minimized our credit card debt. We even replaced our aging (more expensive) vehicles with cheaper vehicles. We didn’t take fancy vacations, in fact, we barely took any. Those we did take involved driving and staying in modest accommodations. We wanted to save for a rainy day since my husband works in an industry riddled with debt and constant layoffs. We wanted to save for college for our children. We didn’t want them to be saddled with the debt that we still have all of these years later.

Over the next few years, the cost of heating oil and gasoline tripled and our taxes increased significantly. Now food costs are on the rise, our house prices are falling and our savings invested in the stock market are decreasing in value. I still see people shopping and spending all around me. My daughter wants designer clothes because all the girls at school are wearing them. I want to ask these mothers how they are affording it all. Maybe I did something wrong and missed the boat somewhere. Maybe because I moved here in this decade that my housing costs are higher than those who grew up out here. I figure there has to be an explanation. My inquiring mind wants to know because our quality of life is going down not up despite everything we have done to achieve the opposite.

All I know is that I am starting to think harder and harder about suburban life and whether the taxes, commute, and everything are worth it. Don’t get me wrong, I like it out here. I was always happy to be living in vacationland, knowing that I didn’t have to leave the Island in the summer if I didn’t want to. Knowing I had all the amenities to have a great vacation right here at home. That was part of the allure of moving out here in the 1st place. We didn’t need to go anywhere else for a summer vacation especially when people were clamoring to vacation out here. The biggest downside to all of this is now more people are going to be sticking around or coming to vacation out here this summer since it is too expensive to go anywhere else. That may upset my pleasant world a little.

Nevertheless, I need to be enlightened by my fellow middle class dwellers and maybe together we can make some sense of all of the rising costs and what we plan to do about it.

Property Tax Grievance

Last week my husband and I were lucky enough to file a grievance with the Town Assessor to reduce our property taxes. We had received a deluge of mail from many law firms and agencies offering to file on our behalf. In return the typical fee is 50% of your 1st year tax savings plus any appraisal fees if required. Of course, if your taxes are not reduced then you pay nothing. It is a win-win situation since you have nothing to lose and everything to gain. My husband thought it was a great idea and that we should sign up with one of these firms. I figured that I should research the matter and do it myself since that’s the type of person I am. Somehow, I had the date of May 20, 2008 in my head. It was the deadline stated on all of these offers. On May 19, I finally got around to my research only to find that May 20, 2008 was the absolute deadline for filing with my Town and that the grievance period began on May 1st. Great! I had no choice but to show up the next day and take my chances with the process.

I arrived in the rain with great trepidation because I was unprepared. Also, because it was the last day, I had no chance to fix any issues that may arise. I was pleasantly surprised. For all of the typical complaining about government employees, those at my Town Assessor’s office were stellar. Though the line got long at times, they patiently helped everyone along who needed it. If you couldn’t grasp the computer, if you couldn’t fill out the application, if you couldn’t grasp one single iota of the process, it did not matter. The Assessor’s office helped you with everything. It was incredible. Even when the waiting line for the computers got too long, residents were led to the back office to use the employees’ personal computers.

Luckily, I found the process to be simple. First, you are given an application and led to a computer to look up your address to get your tax id# (if you didn’t bring your tax statement with you) and your assessed valuation. The assessed valuation is the multiplier used to calculate the dollar amount of taxes owed. Using the valuation, the
assessed value (the current market value as deemed by the Assessor) of your property is calculated. I couldn’t believe the amount that my house was assessed, close to $100,000 more than I thought is was worth. This was a good sign that I might have a case. In my town, you also received a list of all the sales of homes in your zip code during the past year. It was your job to find 3 comps, 3 homes as similar to yours as you can find in your neighborhood that sold for less than the amount your home is currently valued by the Town Assessor. The same process an appraiser uses to qualify the value of your home. You were given the opportunity to use the computer again to verify the 3 homes you had chosen to get additional details to complete the application. You could also attach a recent copy of an appraisal if you had one. The final step was for you to value your home based on the comps that you picked and that was it.

Your application then goes to the Assessment Review Board for approval. I was concerned that some of the comps that I picked had higher assessed valuations than my house. However, the state of New York sets the rules for property tax grievance. Only the current market value of your home and other homes in the area can be used to determine if your house is overvalued. I hope that I am approved for this year. It will be a great help. If not, I will definitely try again next year. I couldn’t believe that there were so many firms and agencies making so much money for a process that was so simple, at least in my town.

Suffolk County Police Overpaid?

Steve Levy, Suffolk County Executive, published an editorial in The Smithtown News on May 8, 2008 in response to the Suffolk County Police union (PBA) propaganda that the County was placing the public in jeopardy by understaffing the police department. In this letter he put in the specifics of what Suffolk County police officers earn.

“It costs the county an average of $144,000 in wages and benefits (not including overtime and up to 12 percent in night differential pay) to place a single police officer on the street.

Police Officers get up to 89 paid days off a year, including five personal days, 26 sick days, up to 30 vacation days and 28 chart days. These paid days off do not include the 13 holidays.

The law enforcement contracts allow some individuals to collect up to $300,000 in unused sick, vacation days and other paid time upon their retirement.”

These numbers are outrageous. I know police officers have a tough job but these are suburban police officers, they are not working in a major city. Levy states that the PBA union has been getting its way in negotiations for decades and that these generous contracts have “made us one of the highest taxed regions in the nation. It is my intent to put a stop to these [contract] giveaways that have been crippling our local economy and forcing so many of our families off of Long Island.”

The PBA has run amok with its demands and claims. I certainly do not feel like the police department is understaffed. Everywhere I go I see plenty of Suffolk County police vehicles. Every time I pass a traffic accident these days, there are at least six to eight police cars responding and blocking the road. We cannot let unions like the police, teachers’ and others continue to gouge the public purse.