For more than half a century, City Hall has been paying for pensions of people who work for private institutions and aren’t city employees.
And until The Post’s David Seifman disclosed this bizarre arrangement in 2009, many longtime government watchdogs didn’t even know about it.
Four years later, the city’s still paying — though this month, Budget Director Mark Page announced that the city was suspending payments to the Cultural Institutions Retirement System on the grounds that it had been overbilled.
The deal dates back to 1962. Under Mayor Robert Wagner, the city agreed to cover salaries and pensions for thousands of workers at private cultural institutions that also get city funding.
Today the city pays into the pensions for 1,500 of these non-city workers. Most goes to workers at city-funded day-care centers, who were added to CIRS after the initial deal was struck. Page told the City Council the projected cost to the city for these pensions for this year was $17 million. As he put it, that’s “nice for those enterprises but not very nice for our taxpayers.”
Exactly. The larger problem is this: These pension arrangements are covered by collective-bargaining agreements involving municipal unions. So the city remains on the hook, and getting out from under this deal will not be easy.
Worse still, if such an arrangement can go on for 50 years with no one noticing, can it be the only one? Probably not, according to city Labor Commissioner Jim Hanley, given the complexities of city government.
It sounds like a joke. But it’s no laughing matter. For it speaks to why spending is easier to start than to stop — and how bad decisions made today may well bite New York taxpayers not yet born.