Last Friday, Mayor Bloomberg updated his budget proposal for the fiscal year that starts in July: The city will spend some $49.7 billion of its own money. With state and federal cash, the total is $68.9 billion. The citys part is 11 percent more than this year -- in part because the mayor is just too nice to stick up for taxpayers against Gothams public-workers unions.
The immediate problem is that taxes and other revenues will net the city just $46.5 billion next year -- $3.2 billion less than the $49.7 billion the mayor means to spend. Thats a huge gap -- nearly 6.9 percent.
More worrisome, its our fourth straight year of big budget gaps. The rafts keeping city government afloat since 2009 are Wall Street bailouts, which have pushed up bank profits, plus the Obama stimulus.
But that windfall is gone. Though New York has weathered the recession better than the rest of the country, a healthy economy wont pay for our high spending. Wed need a permanent bubble for that.
So weve got to do something to cut costs. That means tackling soaring expenses like Medicaid and debt costs -- and also pensions and other worker and retiree benefits (mainly health). Next year, pensions and worker benefits will eat up 35 percent of city revenues -- $16.4 billion.
The mayor is right to say that we cant afford this stuff. He deserve credit, too, for being upfront about Gothams massive pension burden, paying the $8.4 billion contribution to the fund this year, for example, rather than weasel his way out of it, as state and local governments from New Jersey to Illinois have done.
Hes right to oppose the City Council proposal to raid a $2 billion “surplus” -- money thats needed to pay for future health benefits -- to give unions more cash now.
The mayor is right, too, to take a page from MTA chief Jay Walders playbook, directing his deputies to save money by slashing real estate, merging help desks and squeezing outside contractors for some savings. But Bloomberg is going about “fixing” the big-ticket problems strangely.
Start with his claim that the problem isnt that the city spends too much, but that Washington and Albany spend too little. He made the point strongly Friday, pointing to “deep disinvestment in New York City by the state and federal governments.”
When the mayor took office, the feds paid 15 percent of our budget; today its 10 percent. And the states down from 21 percent to 17 percent. If theyd kept up, “then spending . . . would cost local taxpayers $6.1 billion less” next year, the mayor noted.
Sorry: Theyre spending less as a share simply because the city has vastly increased its outlays. Why should state and federal taxpayers go along for the ride?
Bloomberg has upped education spending, for example, by 108 percent, more than three times the inflation rate (and thats before adding in the growth in teacher-pension costs). Nor did the feds make us spend so much on public-employee benefits -- and up until 2008, the mayor freely gave out raises without demanding big changes to these benefits in return.
As for the state, the mayor says that if he doesnt get more from Albany, hell lay off 4,100 teachers. But where is Gov. Cuomo supposed to get the money? Instead of throwing around threats, the city and state should be working to do more with less in education.
Bloomberg is also implicitly “threatening” the teachers union -- saying that if he doesnt get union cooperation on cost-cutting, hell go ahead with the layoffs. Sorry, the union shouldnt get to decide what services the taxpayers will get for their money -- thats the mayors job, along with controlling costs to pay for it.
The mayors on slightly firmer ground complaining about the state on pensions -- since the governor and Legislature do set pension rules for public workers, regularly adding to Gothams pension costs.
Yet the mayors “answer” here is weird, too. He wants Albany to give him the right to bargain with unions over pensions for future workers. As he put it Friday: “As [some] states try to walk away from their unions, not have unions, we want to negotiate more with our unions.”
Come on: Hes always had the right to bargain wages and health care for todays workers -- and that hasnt done the taxpayers any more good. Better to ask Albany to remove health benefits from the collective-bargaining process, so that the city can ask workers to pay premiums as it sees fit to control costs. Thats what Massachusetts is doing, and it would save the city a good $500 million, enough to keep the teachers.
The mayors strategy adds up to one thing: twisting himself in knots to acknowledge the citys untenable fiscal situation while avoiding a head-on fight with labor. But sometimes peace -- and cognitive dissonance -- is unaffordable.
Original Source: http://www.nypost.com/p/news/opinion/opedcolumnists/budget_weirdness_CcBGIbm55eJit1PRsx9KpM