Key Questions de Blasio Won't Answer
May 19, 2014
Since unveiling his inaugural budget 11 days ago, Mayor de Blasio and his top staff have obsessively avoided public discussion and debate on the $76.2 billion proposal.
Here are some of the questions the mayor won’t take — including several that his staff has seen but refuses to answer. The questions concern the mayor’s unprecedented attempt to delay until 2020 paying teachers for the work they already did in 2009 and 2010. And while he may try to claim these are minor, technical accounting issues, they cast grave doubt on whether the mayor understands — or cares — that keeping New York from going broke is not a simple task:
•One good reason to try to delay accounting for a current operating expense is that we don’t have any money. The teachers’ deal has doubled next year’s deficit, to $2.2 billion. In the years the teachers did this work, the city had massive operating deficits — a $2.5 billion deficit in 2009, and a $1.9 billion deficit in 2010. If then-Mayor Bloomberg was wrong back then in saying the city couldn’t afford raises, where do you think he should have found the money — through raising taxes or cutting back further on public services during a historic financial crisis?
- The teachers refused to work with the mayor on concessions back then at a time when the city needed all the help it could get. Why, then, should they get a raise for these years a half-decade later, a raise that the city, by definition, still cannot afford to give?
- You propose to pay $4.3 billion worth of raises to teachers for retroactive pay — a 4 percent raise for 2009, and a 4 percent raise for 2010. Union chief Mike Mulgrew is telling his teachers — in writing — that “you will get all the retroactive pay you are entitled to.” If the teachers are already “entitled” to this pay, then they have already earned it, meaning the city already owes them the money. How, then, can the city justify including this spending not on this year’s budget, but starting only next fall, and continuing through the next mayor’s term?
- If the city already owes the teachers this money for work already done but won’t pay them until the future, isn’t the city just borrowing from the teachers rather than from more sophisticated bondholders? How does this square with the state’s prohibition against borrowing for operating expenses? As a debtor to the teachers, do you have a duty to make the teachers aware of the risks that other municipal bondholders face?
- Who is not leveling with the public: the teachers’ union, telling people they’re “entitled” to pay for work they’ve already done — or your budget director, who told a closed-door crowd of elites last week that “the payments are earned in the year they are received” — that is, in the future, not in the past?
- In his talk to select elites last week, your budget director implied that the reason the city can book the $4.3 billion cost of past raises through 2020 rather than now is because the city won’t have to pay teachers who quit or get fired before then. But though the city doesn’t know which teachers will quit or get fired in the next half-decade, it certainly knows, based on past data, that most teachers won’t quit or be fired. The fact that you are uncertain whom you’ll be paying for past work doesn’t make the obligation to pay for past work any less certain. Why, then, not book the obligation now?
- A teacher who retires today after a 35-year career gets a $68,000 annual pension, guaranteed for life. Teacher pensions will cost $3.3 billion next year. Is it reasonable for professional-class workers to expect not only to be completely protected from the market swings that impact private-sector workers’ retirement savings, but also to be held harmless from a recession that forced many people to go without a raise?
- How much will the new teachers’ raises add to future pension costs — a cost that future mayors (and taxpayers) must pay?
- After Lehman Brothers collapsed in 2008, New York muddled through partly because Bloomberg, during the good years, had socked away an $8 billion cumulative surplus. During your good years, you’re socking away future deficits. What do you say when and if Wall Street crashes — statistically something that no successful mayor avoids?
Original Source: http://nypost.com/2014/05/18/key-questions-de-blasio-wont-answer/