Staten Island Chuck didn’t see his shadow yesterday. But Mayor Mike saw more budget deficits — meaning six more weeks . . . er, make that years of budget winter for New York.
City taxpayers will shell out $51.7 billion for the fiscal year that starts in July — $6,200 for every man, woman and child. That’s a 2.7 percent rise from this year, in line with inflation.
For the first time in a long time, pension costs won’t rise faster than the rest of the budget. They’ll gulp down an extra $145 million in taxpayer money — 1.8 percent more than last year.
But that’s not altogether a good thing. Thing is, pensions have already grown to a level that’s a few notches past insane. And they’re not going down. That’s $8 billion a year that we can’t spend on other stuff we need, such as active firefighters and cops and better roads.
So Bloomberg’s 100 percent right to do what he did yesterday: keep the pressure on the people who can do something about pensions, Gov. Cuomo and state lawmakers. His idea about being more realistic about the returns the city will earn on pension-fund investments is prudent, too.
But the mayor needs to get similarly hawkish with some other parts of the budget — like health-care costs.
Next year, Gotham will spend $6.7 billion on health and “fringe” benefits for workers and retirees — up 8.8 percent. Add health care to pensions, and these things consume 28 percent of the taxpayers’ money. These costs haven’t stopped growing — They’ll jump another 29 percent over three years, to $8.6 billion.
Plus, Bloomberg hasn’t set sufficient money aside to pay for these future costs. Yes, he set up a modest fund a few years ago, but he keeps taking out up to $1 billion a year, running it dry.
What’s more, it’s the growth this year in health costs, not pension costs, that has pushed New York over a crucial threshold: The city will pay more on benefits this year for current and retired workers than it will on salaries for firefighters, police and sanitation.
Bloomberg needn’t wait for Cuomo to act on health costs. That’s a matter of deal-making with unions — and city contracts with workers are up.
Yes, unions would rather wait out Bloomberg’s remaining 23 months than give up anything. But the mayor can play harder ball, threatening layoffs and even privatization in some areas unless they play.
Here’s a start: The Department of Sanitation says it will explore putting the work at four marine-transfer stations up for bid by 2014, to save $8 million — cutting 248 union jobs and the union dues those workers pay.
Debt costs, too, keep going up — rising 14.9 percent next year, to $5.9 billion, and to $7.1 billion in three years. Debt pays for investment in assets like roads, but Bloomberg should pay some of those costs, especially regular maintenance costs, in cash.
Yes, he’ll devote about 70 percent of the money from selling $1 billion worth of taxi medallions to paying some capital costs upfront — but it’s nowhere near enough.
Pensions, health-care and debt costs are the main reasons the city faces a $3 billion budget gap in two years’ time, and another $3.5 billion gap after that. (That, plus the ugly fact that Wall Street seems unlikely to bail the city out by having another boom anytime soon.)
Tellingly, in this year’s budget documents, the mayor’s stopped calling all of these costs “uncontrollable” and started calling them “not fully controlled by the city.” That’s closer to the truth — and it’s time to start controlling them.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s
City Journal.