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Monday, February 6, 2012

Pensions to Cost City More Than Pay: Mayor Bloomberg

By DAVID SEIFMAN City Hall Bureau Chief - NY POST
Last Updated: 5:58 AM, February 3, 2012

Pensions and fringe benefits for uniformed workers are going to cost the city more next year than their actual salaries, Mayor Bloomberg revealed yesterday as he made another strong pitch for Albany to enact pension reforms.
“There’s no one in the private sector that comes even remotely close to that,” the mayor declared during a presentation of the $70.3 billion preliminary city budget for fiscal year 2013, which starts on July 1.
Budget documents show that the salaries of the four uniformed forces — police, fire, correction and sanitation — totaled $7.617 billion in fiscal 2012, and are projected to drop slightly to $7.468 billion by next year.
Benefits and pensions are heading in the other direction — $7.497 billion in 2012 vs. $7.63 billion in 2013.
One union official pointed out that the Fire Department hasn’t hired anyone for three years because of a court order, resulting in a lower payroll that is bound to go up when the order is lifted. He contended that it thus makes the mayor’s comparison of payroll vs. pensions and benefits not very meaningful.
“That’s a ridiculous argument,” countered Bloomberg. “The per-capita costs are higher than salaries, and it’s getting worse.”
Harry Nespoli, president of the Uniformed Sanitationmen’s Association, shot back that the mayor needs to look at the bigger picture, which shows that the city’s pension bill is flattening out at about $8 billion a year as the stock market rebounds.
“There’s no reason to change our pensions at all,” he declared.
In an ironic twist, Bloomberg was able to plug part of a projected $2 billion deficit for 2013 with money he had socked away for higher pension bills that didn’t materialize.
Anticipating that actuary Robert North Jr. would reduce the expected rate of return of the city’s five pension funds from 8 to 7 percent a year, officials set aside what was expected to be an extra $1 billion a year for the costs that would have resulted.
But North decided to spread out the city’s payments over 22 years, so the tab came to only $575 million the first year, leaving Bloomberg with a windfall of $425 million.
He didn’t sound too happy about it.
“We were willing to do more and had planned to do more,” the mayor said.
“I suppose the good news is it’s easier to balance the budget. The bad news is that it is an obligation we have just transferred to our children.”
North’s action requires approval by the state Legislature, which is by no means assured.
The budget included cuts to cultural programs, libraries, day-care services and fire companies — all of which the mayor put on the table in previous years for the City Council to restore.
The mayor’s new d├ętente with Gov. Cuomo was evident throughout his hourlong presentation.
Instead of complaining, as he did last year, that the city was getting shortchanged $300 million in state aid, Bloomberg pointed out that Cuomo faced the same difficult budget choices as he did.
“The governor doesn’t have extra money, either,” the mayor concluded.

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