Wednesday, Mayor de Blasio presented a fiscal 2018 Executive Budget that called for pension contributions totaling $9.6 billion — another all-time high. Yet city pension plans remain significantly underfunded even by lenient government accounting standards, posing a big risk to New York’s fiscal future.
After increasing from $1.4 billion to $8.1 billion under former Mayor Bloomberg, pension costs have continued rising under de Blasio. Based on the mayor’s latest proposed financial plan, the pension appropriation in de Blasio’s fourth budget will be $1.5 billion (19%) above the level in Bloomberg’s last budget. By fiscal year 2021, according to the mayor’s latest projections, pension costs will reach $10 billion, or nearly 15% of city-funded spending.
New York City’s pension costs will soon displace social services as the second-biggest spending category in the city budget, consuming the equivalent of more than 80 cents out of every dollar raised by the city’s personal income tax.
But even with annual contributions approaching the once-unimaginable level of $10 billion a year....
E.J. McMahon is research director of the Empire Center for Public Policy and an adjunct fellow at the Manhattan Institute
Josh B. McGee is a senior fellow at the Manhattan Institute and vice president of public accountability at the Laura and John Arnold Foundation. In 2015, McGee was appointed to chair the Texas Pension Review Board by Governor Greg Abbott.
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