NYC's Mayor Proposes Pension Reform
Saying city-funded pension costs have risen from $1.3 billion in FY2002 to $8.0 billion in FY2013, Mayor Michael Bloomberg called for action to address "a ticking time bomb in rising pension costs."
New York City Mayor Michael Bloomberg presented his preliminary budget for fiscal 2013 on Feb. 2, highlighting a balanced budget with no tax increases. He also warned that pension costs are rising to dangerous levels, with a chart showing pensions and benefits for the city's uniformed workforce exceeded 100 percent of their salaries and wages in FY2012 for the first time and will rise to 109 percent in FY2013.
"Cities across the country have struggled to keep their heads above water, laying off teachers, police officers, or firefighters, with a few even having to declare bankruptcy," Bloomberg said. "Weh've avoided those painful steps because we spent years planning ahead, made government more efficient, and saved for a rainy day. The budget we are presenting today is a balanced budget with no tax increases, no layoffs of teachers or uniformed workers, and no walking away from our long-term investments. It is a responsible budget that continues to make responsible spending cuts while protecting the core services and investments that have helped our city to weather the national recession better than most other places. But we face a ticking time bomb in rising pension costs. The only way we will be able to continue to pay for top-quality public schools, fire and police protection, and other services New Yorkers need, and also to protect the very financial security of the pension system City workers rely on, is to adopt real pension reform."
He called for a new pension plan for new employees. All new non-uniform employees would be required to work until age 65 to retire and receive a pension, and they'd contributed from 4 percent to 6 percent of their pay, depending on their salary levels. The city and new employees would share the cost or savings if pension contributions fell outside a set range. He said the plan would save the city about $30 billion in the next 30 years.
Bloomberg's capital plan includes $250 million to replace firefighting apparatus, support vehicles, fireboats, and equipment and also $151 million for a new public health laboratory. The city is spending $8.8 billion on its police department and $3.3 billion on the fire department in FY2012 and will see those costs rise slightly in FY2013, according to his preliminary budget.