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New York Post

 

Budget Weirdness

May 09, 2011

By Nicole Gelinas

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 city’s part is 11 percent more than this year -- in part because the mayor is just too nice to stick up for taxpayers against Gotham’s 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. That’s a huge gap -- nearly 6.9 percent.

More worrisome, it’s 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 won’t pay for our high spending. We’d need a permanent bubble for that.

So we’ve 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 can’t afford this stuff. He deserve credit, too, for being upfront about Gotham’s 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.

He’s right to oppose the City Council proposal to raid a $2 billion “surplus” -- money that’s 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 Walder’s 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 isn’t 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 it’s 10 percent. And the state’s down from 21 percent to 17 percent. If they’d kept up, “then spending . . . would cost local taxpayers $6.1 billion less” next year, the mayor noted.

Sorry: They’re 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 that’s 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 doesn’t get more from Albany, he’ll 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 doesn’t get union cooperation on cost-cutting, he’ll go ahead with the layoffs. Sorry, the union shouldn’t get to decide what services the taxpayers will get for their money -- that’s the mayor’s job, along with controlling costs to pay for it.

The mayor’s 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 Gotham’s pension costs.

Yet the mayor’s “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: He’s always had the right to bargain wages and health care for today’s workers -- and that hasn’t 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. That’s what Massachusetts is doing, and it would save the city a good $500 million, enough to keep the teachers.

The mayor’s strategy adds up to one thing: twisting himself in knots to acknowledge the city’s 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

 

 
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