The bubble is close to bursting. The cost of pensions, Medicaid and worker and retiree benefits may soon become too much for the city government to bear. It’s estimated that taxes and other revenues will net the city $3.2 billion less than what the mayor intends to spend next year.
"Though New York has weathered the recession better than the rest of the country, a healthy economy won’t pay for our high spending," Nicole Gelinas of the Manhattan Institute said. "We’d need a permanent bubble for that. We’ve got to do something to cut costs….Next year pensions and worker benefits will eat up 35 percent of city revenues -- $16.4 billion."
It’s like a toboggan zooming down a hill. It seems clear that something has to be done to stop the momentum. We’re racing toward major trouble -- and our political leaders, so far, don’t seem to have the guts to try to stop it.
Dick Dadey of Citizens Union told me: "It’s an amazing turn in our priorities when city tax dollars, which used to go for providing real services like police, fire, sanitation and education, are needed to provide for pensions and benefits.
"It’s a tradeoff with no good choices. Ten years ago pension costs were about $1.2 billion. Now, the costs have gone up to more than $8 billion."
Back in the mid-seventies,I saw Governor Hugh Carey form a coalition of bankers, business people and unions to confront New York City’s fiscal crisis. Ultimately, the unity of this group helped the city out of a financial morass.
New York survived and prospered. The situation today is delicate and requires that Governor Cuomo, Mayor Bloomberg, the city unions and the business community work together to get us out of this mess.
Everyone must give a little, for the sake of the city, its workers and the citizens of New York.