Michael Bloomberg’s remarks on Governor Cuomo’s pension reform plan

Michael Bloomberg’s remarks on Governor Cuomo’s pension reform plan

Post ID: 32116 | POSTED ON: Feb 29, 2012

ALBANY , NY — “This really is something that’s important, and I’m proud to stand shoulder to shoulder with mayors and county executives from across our great state.

“Our brand-new coalition of elected officials called New York Leaders for Pension Reform represents at the moment 15 million New Yorkers, and it’s going to grow from here. We come from both ends of the political spectrum and all corners of the state, from urban and rural communities, from Suffolk to Syracuse and White Plains to Watertown.

“But in spite of those differences, it is our growing concern for New York’s fiscal future that unites us. We’ve each seen firsthand how pension costs are spiraling out of control – and we all agree that something have to be done to rein them in.

 “Governor Cuomo has proposed reforms to the pension system in his budget – and we’re here today in Albany to urge every legislator to get behind his plan so we can quickly put our state on a stronger, surer footing. 

“As local elected leaders, we are the ones who see firsthand just how rising pension obligations are taking a bigger and bigger bite out of our budgets. We see how they are taking away from the essential services that our constituents need and deserve. We see how they’re increasing our tax rates all across this state, money that’s coming out of the pockets of people who are working hard trying to make ends meet and have a future for themselves and their families. 

“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 – that is billion with a ‘b.’ 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.

“As a matter of fact, in New York City we’ve had nine different programs to eliminate our gap, which is what we call our Programs to Reduce our Expenses. We’ve reduced them by $6 billion annually. That’s all been eaten up by the increase in pension costs. 

“The pension increase is more than a five-fold increase, amounting to more than the operations of New York City’s Police, Fire and Sanitation Departments combined. Just think about that, we’re spending more money on pensions than on Police, Fire and Sanitation together.

“Pension costs now account for roughly 12 percent of New York City government’s revenues – which means that one out of every six tax dollars New Yorkers pay to the City is going to someone’s retirement. And unless we enact sensible reforms now, our pension costs will only keep growing.

“That means even more taxpayer dollars will be going towards pensions when they instead could be going towards our schools, or instead could be going towards our parks and libraries, or to pay police and fire for protection, or create jobs. Eventually, we’re just going to reach a point where we’ll be forced to cut back on all of our services just to pay for pensions.

“Let me be clear about something else: This is not a problem that affects only the five boroughs of New York City. It’s not a downstate issue, or an upstate issue. And it’s not a Republican issue, or a Democratic issue. This is a New York issue.

“And you’ll hear in a moment from my peers, mounting pension costs are crushing the budgets of every public employer in New York State. And if nothing is done, cities and counties are going to face even more severe budget cuts and tax increases – or both.

“In his proposed budget, Governor Cuomo has included reforms to bring pension costs under control. It includes the creation of a new tier of pension benefits for yet-to-be-hired employees. This new tier would eliminate overtime pay from pension calculations and modestly raise the retirement age for future employees, bringing it into line with other states. It would also create an option – entirely voluntary – for employees to participate in a 401k-type plan.

“The Governor’s proposals are commonsense and long overdue, and they could save New York City $30 billion over the next 30 years – and local governments in the rest of the state approximately $50 billion. And it would accomplish all of this without affecting the retirement benefits for one single existing public employee.

“Those current employees deserve a retirement based on the benefits they’ve been promised – and we should honor those benefits.  As a matter of fact, the State Constitution requires us to honor those benefits. But our current course is simply unsustainable. For future workers, we must have a retirement system that is affordable. And we are going to work with Governor Cuomo and our partners in the legislature every day until that is a reality.

“Some of the members of our coalition have joined us today, and I’d like to ask them to say a few words – starting with the President of the County Executives Association of America: Monroe County Executive Maggie Brooks.”

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