Amid its budget crisis, the city is on track to lay off teachers, close fire companies, cut social services and impose other sacrifices. Yet such reductions could be avoided if the city reformed its unusually costly commitments for retiree health insurance and brought them in line with those of other public-sector employers.

The $1.6 billion in budget cuts announced by Mayor Bloomberg last month are the most recent example of the consequences of the national recession for local governments. New York provides a troubling example of how the inability to contain costs associated with a large municipal workforce imposes a greater burden on the most vulnerable populations, notably low-income children.