Bloomberg Cautions Against Generous Pension Increases
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Mayor Bloomberg said yesterday that the city’s method for calculating pensions payments is sound, but warned that the city can’t afford to keep sweetening benefits for public employees.
“The city cannot be as generous as every special interest group would like it to be,” Mr. Bloomberg told reporters. “These are tradeoffs. If we enhance the pension system then we can’t afford to pay as much in salaries. If we enhance the pension system and salaries, we can’t afford to have as many employees or to provide as many services and that’s what everybody is unwilling to face.”
The comments came after the New York Times reported that an alternative calculation found that the city might be short by as much as $49 billion when it comes time to payout future pension benefits to public employees.
Mr. Bloomberg said the real problem is not the calculation, but that Albany continues to enhance public benefits and stick the city with the bill.
He said the city has in the past funded its pension obligations, but that it has not done the same planning for its health care costs. As part of this year’s budget, he created a health care fund to squirrel away $2 billion over two years for future payments.
During his state of the city address in January, Mr. Bloomberg said the city had to “rein in health care and pension costs that have spiraled out of control” and raised the specter of employee contributions to health care and pension “modifications.”
He also pointed out that public pension benefits, which in some case are equal to the employees’ annual salary, are far more generous in the public sector than in the private.
Labor leaders, who are trying to protect their employees’ benefits packages, have said Mr. Bloomberg should not be raiding the savings of their members after they’ve fulfilled years of public service.
The president of the United Federation of Teachers, Randi Weingarten, has said that it does not make sense to roll back health benefits for public workers while the city is experiencing unprecedented prosperity and the mayor is trying to get more New Yorkers enrolled in health care.
