Last week, New York City Mayor Michael Bloomberg made a fairly rare trip up to Albany on behalf of the so-called Bipartisan Coalition of Mayor and County Leaders to advocate for changes to the pension system that Gov. Andrew Cuomo has been pushing.
The main change would be to offer state and municipal workers 401(k)-style plans that have been popular in the private sector. These plans generally require a smaller investment from the employer and a larger contribution from workers.
“The governor’s proposals are commonsense and long overdue and could save New York City $30 billion over the next 30 years–and local governments in the rest of the state approximately $50 billion,” said Bloomberg. “And it would accomplish all of this without affecting the retirement benefits for one single existing public employee.”
Barbara Bowen, president of the Professional Staff Congress, the union that represents City University of New York employees, feels that the mayor is off base with his sentiments, especially when it comes to her members, whose pensions are funded by the state and the city.
“Public worker pension cuts would make it harder to recruit the best faculty at CUNY and SUNY, and that will hurt students’ education,” she said in an emailed statement to the AmNews. “The proposed pension cuts are unnecessary and unfair.
“New York’s budget problems were not caused by middle-class public employees–they were caused by the economic crash and a generation of tax cuts for the rich,” she continued. “What New York needs is progressive tax reform to make sure that corporations and the wealthy pay their fair share.”
DC 37 President Lillian Roberts wasn’t as kind to Bloomberg when she spoke to the AmNews.
“It appears to me that the people we elected to look at our finances–the state and city comptrollers–there’s been no dialogue between them,” said Roberts. She said DC 37 employees invested their pension dollars, and as markets declined their investment went down, as most investments did during the economics collapse.
Roberts remembered a news conference she had with Bloomberg in the aftermath of the collapse, where they discussed different measures to save money for the city, including decreasing the number of investors.
“We can cut off half a billion dollars because we have too many investors doing the same thing,” said Roberts. “If he’s concerned with saving money, he can also pick up a billion dollars’ worth of frauds because of him going outside of the state and country for contracts.
“I’m glad he’s concerned, but he needs to take a look at himself,” she said. “If some of our workers didn’t have these pensions, they’d be on welfare.”
In Albany, Bloomberg spoke about how pension costs have increased to the point that he has been forced to cut services.
“When I became New York City’s mayor back in 2002, just to put this in perspective, our city’s pension costs that year came to about $1.5 billion,” stated Bloomberg. “It is an enormous number. But let me put it in context. Today, that $1.5 billion annually has grown to over $8 billion annually. $8 billion per year. That’s something like $6.5, $7 billion more that the taxpayers of New York City have to come up with every single year. And it means we have to have less services and pay more taxes that we otherwise would.”
New York State United Teachers spokesperson Carl Korn told the AmNews that Cuomo’s pension reform would be dangerous for working-class New Yorkers, another attempt from Wall Street to get their hands on the hard-earned money of working people, since the funds would likely be redirected toward firms specializing in 401(k)s.
Korn added, “First of all, the bill offered by the Cuomo administration would cut pension benefits by 40 percent, and that is excessive. Cutting the pensions of middle-class workers is just a wrong approach. A better approach would be to make Wall Street and the wealthy pay their fare share.
“The corporate CEOs and hedge fund workers that Bloomberg caters to have million-dollar pension funds as well,” continued Korn. “There’s an alternative to undermining the economic security of union workers
closing up tax loopholes and making the wealthy pay their fair share. The average pension is $19,000 a year. Why would we give it to the same people who caused the economic collapse?”