New York City Mayor seeks to reform pension plans to tackle huge budget deficit

Mayor Michael Bloomberg warned that if the city of New York does not start tackling its budget deficit problems now, they could haunt the city for decades.

In his State of the City speech in Staten Island, the Mayor said New York is facing deep budget woes and that he will try to reduce pensions for city workers which he complained are overly generous. Bloomberg has retained ex-Mayor Ed Koch to help in his bid to bring back control of city-worker pensions from the state.

New York City currently faces a budget gap of $2.4-billion, larger than that of some states – and the pension fund crisis forms its very core. In 2011, it is estimated the city will spend about $7 billion on pension costs alone, up from $1.5 billion in 2001.

He will ask officials in Albany to change the law so that the City can directly negotiate pension benefits with unions during collective bargaining sessions.

In the event the state does not comply, the Mayor indicated he will not sign contract with a salary increase unless it also includes benefit concessions that save the city money.

City workers deserve a safe and secure retirement, but right now, they receive retirement benefits that are far more generous than those received by most workers in the private sector – and that provide for a much earlier retirement age, Bloomberg said.

It would be great if we could continue to afford such generous benefits, but we can't.

Among other measures, Bloomberg wants to hike the retirement age to 65 for non-uniformed workers. This move, which would apply only to newly-hired workers, would save billions of dollars over the long term, he claimed.

At present, most non-uniformed city workers can retire at the age 57, while city teachers with enough experience at 55.

Bloomberg also proposed the elimination of year-end bonuses for future uniformed retirees – which would generate savings of about $200 million annually.

City taxpayers just cannot be expected to give substantial holiday bonuses when so many of them are out of work or having their own wages frozen or cut, he noted.

Already union leaders are smelling blood.

The city’s biggest public-employee union. District Council 37 of the American Federation of State, County & Municipal Employees, attacked Bloomberg’s proposals.

Mayor Bloomberg chose to take the low road in his State of the City address; attacking city workers and the modest $17,000 per year pensions they've acquired after making contributions during decades of dedicated service and sacrifice, said Lillian Roberts, the union’ executive director.

Patrick Lynch, the pugnacious head of the Patrolmen's Benevolent Association said he will fight to protect the payments and bonuses, which he said were guaranteed in return for agreeing to concessions in prior pension reforms.

Michael Mulgrew, president of the United Federation of Teachers, denounced the Mayor.
I thought he was extremely misleading and seems to be wanting to protect millionaires and billionaires in New York City through these tough economic times and take it out on the working-class and the services to the poor, he said.