Bloomberg's Dilemma: Soaring Pension Costs Amid Economic Crisis
As the stock market has declined, so has the city's pension fund
By GABE PRESSMAN
Updated 8:30 AM EST, Wed, Jun 24, 2009
Mayor Bloomberg recognizes the problem. He calls New York City's pension system ''out of control." But the question is: which Bloomberg should we believe, the man who preaches fiscal restraint or the guy who gives away the store to the unions?
The Mayor blames the unions and the legislators in Albany for threatening to bankrupt the city. But, as Times reporter Michael Barbaro points out, "the Bloomberg administration itself is responsible for much of the growth in city pension costs over the last eight years, and has repeatedly missed opportunities to rein in the spending."
It's a political year. The Mayor is running for reelection. And there's the rub -- and it's always been so -- with Mayors and unions. Bloomberg needs union support and he dares not antagonize union members who vote in heavy numbers. Since Bloomberg took office back in 2002, city pension costs have risen by leaps and bounds. Those costs are nearly five times what they used to be.
What's particularly unfortunate -- and unfair -- is that the poor taxpayers, who are having trouble paying their mortgages, rents and other expenses, are, as usual, expected to kick in the money for the government employees.
City, state and federal employees, when they retire, get liberal pensions. By comparison, the average person who's worked in private industry gets very little if anything. Overall, the system isn't fair.
As the stock market has declined, so has the city's pension fund. This means the Mayor has to devote more money in the city budget to bolster that fund. Spending for pensions in next year's budget will be $82 million. The Independent Budget Office estimates it will go up to $395 million in 2011 and to $672 million in 2012.
The taxpayers are paying through the nose. And this is hardly the ideal time to be forced to do that. As Nicole Gelinas of the Manhattan Institute told the Times: ''You have a mayor who says that pension costs are unsustainable, that they will bankrupt the city, who has willfully increased the city's pension liabilities.''
So which Bloomberg should we believe? Has he a split personality? The people of New York need a man who will level with us -- and take whatever steps are necessary to put his actions in step with his rhetoric.
First Published: Jun 23, 2009 7:11 PM EST
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