Employee Levels Fall But New York’s Fringe Benefits and Pensions Costs Soar

by Warner Todd Huston | May 13, 2011 1:55 pm

Pensions are the single biggest problem that every state, county and city in the Union face and New York City is no different. It is so bad that even as New York City has seen the numbers of its government employees fall, its costs in fringe benefits and pensions have still continued to soar. (Download the 2012 Budget Summary[1])

The latest budget info released by the Big Apple is a horror story of budget woes with pension costs leading the pack.

Marc Cenedella has done the heavy reading and his report[2] is discouraging, to say the least.

Cenedella discovered that at this point the pension obligations in New York City are almost equal to the costs of what current employees are making. This is simply untenable.

Even as the city has 16,000 fewer employees than it did in 2001, the report shows that spending on salaries increased $3.8 billion to $10.8 billion. Spending on pensions has grown from $1.3 billion to $8.3 billion over the same period.

Of course, it isn’t just government employees (unionized) that is sucking up more of the city’s budget dollars. Education expenses have skyrocketed, too, not that results have increased much, sadly. Costs have gone up three times the rate of inflation even though the number of teachers is not much different (113,000 in 2002 vs 109,000 today).

Expenses in general have grown exponentially, too. As Cenedella notes, “New York City hasn’t really grown its population but has increased expenses from $28.8 billion to $49.7 billion.”

The vast majority of that $20.9 billion increase has been in the form of more dollars to fewer employees. Pension costs are killing us most: this has grown from $1.3 billion in 2002 to $8.3 billion in 2012.

Meanwhile the city itself is turning status quo. Building and expansion has ceased and the city is just doing its best to tread water without drowning in its debt.

One solution to stem the tide is one solution that few Democrat-infested cities want to try. All new employees should be brought in at much lower pay scales, less generous pension promises, and much later retirement ages. Further, these cities need to unload even more older employees at earlier periods in their employment so that they get less pension benefits. Lastly, these employees need to be banned from further government employment so that they can’t double dip into the pension systems.

As I mentioned, New York City is not alone with this messy budget problem. Every state, county and city in America is finding the same troubles. So, why has this happened? It has happened because we have government employee unions. The sad thing is that these greedy, anti-democratic government employee unions have looked at we the people as a bottomless pit of money that they, the unions, have felt entitled to raid at will.

These unions have given millions to compliant politicians so that they will pass laws that create ever higher pay scales, greater benefits, and wildly out of line pensions to union members. The pols take the union bribes and comply with union demands. Then unions give even more to these Democrat pols and ask for even more benefits and pensions and the pols comply again with their pockets full of union cash. It is a never ending cycle that voters are wholly cut out of.

But the bill seems to be at last coming due. Democrats have created this pension bomb and it is about to blow up in their faces.

The final solution for the future is to make government employee unions illegal as they were before 1958. Even FDR, the patron saint of American leftism, knew that government employee unions were the kiss of death to budgets. He wasn’t right about much, but he was certainly right about that.

  1. 2012 Budget Summary: http://www.nyc.gov/html/omb/downloads/pdf/sum5_11.pdf
  2. his report: http://www.cenedella.com/job-search/new-york-citys-2012-budget-an-entrepreneur-observes/

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