The Pension Mess: Have We Gone Too Far?

By Gabe Pressman
|  Thursday, Feb 3, 2011  |  Updated 3:15 PM EDT
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The Pension Mess: Have We Gone Too Far?

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The sad fact is that the state's cupboard is bare, and many union leaders refuse to accept it. That’s why a major upheaval is facing the people of New York in the days to come.

After many years in which government employees piled up wage increases and benefits in successive contracts, the money has run out. Both Mayor Bloomberg and New York’s new Governor, Andrew Cuomo, are facing a financial crisis. They simply can’t afford to continue to pay their employees what they expect to get.

It’s a very sad situation for everyone concerned. It’s not the fault of hundreds of thousands of government workers that they fought for their wages and benefits over many decades----and now find their future is quite uncertain. It’s not the fault of the politicians that, in the years when the economy was booming, they gave away wages and benefits that now seem out of line.

Many people in private industry don’t get pensions at all. Some companies are curtailing salaries and benefits. Many people in private industry have lost their jobs.

Carol Kellerman, president of the watchdog group, Citizens Budget Commission, told me: “Our organization, the CBC, has been saying it for years. These contracts were negotiated in better times. The Mayor is facing large cuts in state aid and tax revenues.
The governor has similar problems. We simply have to reduce government expenses. There’s no alternative.”

In Albany the Empire Center for Government Reform Research estimates that over the next five years, annual contributions to the teachers retirement system will more than quadruple.  That’s absolutely untenable! We all have to recognize that. The taxpayers----many in jeopardy of losing their jobs----can’t afford this kind of two-tiered society.

In old Russian novels, I remember, there were several classes of people. There were peasants and nobles. And then there was another group, officials. They were the government functionaries who had security and steady jobs.

Are we in danger of having the majority of our people subsidizing a similar group of officials in our present society? People aren’t likely to stand for that.

Bloomberg has startled labor leaders with a proposal to eliminate $12,000 annual pension payments to police and fire fighters, not only in the future, but for present employees and retirees too. Leaders of the police and fire fighters unions have denounced the Mayor for not recognizing the unique and dangerous nature of their jobs.

CBC president Kellerman says: “There’s no way we can compensate police and fire fighters for the risks they take. But it’s just not realistic to continue this special pension benefit under current circumstances.”

It’s a tough situation for government employees -- and for the citizens of New York. Our leaders should have seen this crisis coming.  But it’s too late to do anything about that. Many of the politicians who put through these sweetheart deals are no longer around.

We have to look to the future. We need an equitable pension system to take care of our government employees but we can’t break the bank. That would inflict too much misery on all of us.     

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