The Office of the New York City Actuary is expected to recommend changes to the assumptions used to calculate the City’s annual pension costs. These changed assumptions will have an impact on the amount the City is required to contribute to its employee pension funds.
Yesterday, Mayor Bloomberg, Comptroller Liu and a number of city labor leaders announced an agreement that is intended to “depoliticize,” “professionalize” and “streamline” the way pension funds invest. This consolidation is meant to reduce the complexity, inconsistency and inefficiency of administering five different pension funds. This makes sense.
In June 2010 the New York State budget was two months past due; Governor David Paterson’s calls for state employee furloughs and salary freezes had been rebuffed by labor union leaders; and a no-layoff pledge for state workers, agreed to in exchange for pension reforms for new hires, was in effect through the end of the calendar year.
In the last two months, the Bloomberg Administration announced two agreements with municipal unions. These agreements have been heralded as union-labor compromises to prevent the planned layoff of more than 5,000 employees.
State leaders have seized the opportunity presented by the unprecedented budget deficit to implement long-term solutions that will help restore the State’s fiscal strength. While the budget negotiations signaled a change in Albany’s working dynamics, some old habits die hard; indeed, some just won’t die at all.
New York City Budget Director Mark Page testified this week that additional cuts to services may be necessary. The current financial plan, released on February 17th, showed the City in a relatively good financial position, but still relies on State action worth $600 million to close the budget gap for fiscal year 2012. In the event the State does not restore some of
The dramatic aid reductions proposed by Governor Andrew Cuomo in his Executive Budget on February 1 are likely to lead to cuts in spending by New York City agencies. These forthcoming cuts should be understood in the context of previous efforts to reduce municipal spending.
Governor Andrew Cuomo’s proposals to cap property taxes and reduce education aid mean that New York State’s 676 school districts will need to manage with fewer resources; their biggest challenge is to reduce spending without hurting services for the more than 2.7 million public school children.
As New York’s elected officials consider options for balancing budgets in the face of record deficits, they should be attuned to opportunities for cost-savings in all areas, no matter how big or small. One approach for identifying potential savings is examining practices in which New York State and its local governments are out of line with their peers.
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