Mayor Michael Bloomberg warned in his “State of the City” address today that New York still faces deep budget problems and can no longer afford to pay generous pension benefits to government workers.
In his speech on Staten Island, Bloomberg said reforms of the city’s pension system will be his administration’s number one priority in Albany in the weeks ahead.
The mayor said he wants to raise the retirement age to 65 for non-uniformed workers. The change, which would only apply to new hires, would save billions of dollars over the long term, Bloomberg said.
He said the city would ask state lawmakers to change the law to allow the city to negotiate pension benefits directly with the unions during collective bargaining. Right now, the state, not the city, sets pension benefits.
Even if the state does not act, Bloomberg said he is dedicated to forcing change in a system that will cost the city $7 billion this year. He vowed not to sign any contract with a salary increase unless it also included benefit concessions that save the city money.
“City workers deserve a safe and secure retirement, but right now, they receive retirement benefits that are far more generous than those received by most workers in the private sector _ and that provide for a much earlier retirement age,” Bloomberg said. “It would be great if we could continue to afford such generous benefits, but we can’t.”
Year-end bonuses would also be eliminated, saving about $200 million per year.
“City taxpayers just cannot be expected to give substantial holiday bonuses when so many of them are out of work or having their own wages frozen or cut,” Bloomberg said.
In other parts of his speech, Bloomberg said spending cutbacks won’t stop New York from transforming itself into a city of the future.
He says he is still planning development projects and other improvements meant to maintain the city’s status as a world capital.
Bloomberg said he doesn’t want to see the city repeat mistakes of past fiscal downturns, when vital city services broke down due to a lack of money.
“We won’t forget the single most important lesson of the 1970s: when you stop investing in the future, the future hits the road,” the mayor said. “Jobs, people, capital – they all leave. We didn’t allow that to happen after the attacks of 9/11 and I promise you we won’t allow it to happen now.”