Spiraling costs of employee benefits–as well as 4 percent pay raises–are squeezing the budgets of both New York State and New York City.
According to the state Division of Budget (DOB), employee benefits (pensions, health insurance, federal payroll taxes, unemployment insurance, etc.) now average 48.43 percent of salary (up from 43.90 percent during the past fiscal year).
That’s projected to jump to 54.47 percent next year and to a whopping 61.82 percent in 2012-13, or nearly $620 for every $1,000 of salary (here).
In New York City, Mayor Michael Bloomberg, “in attempt to pressure municipal unions to accept lower pensions for new hires,” has included no raises for city employees in his 2011 budget, the New York Post reports (here).
Bloomberg pointed out that fringe-benefit costs now average 75 percent of salaries–100 percent for the uniformed forces and 50 percent for civilian workers–and are running away from the cost of running the rest of the government.
Meanwhile, the city is earmarking an extra $600 million for pension costs pending the outcome of an analysis on projected life spans of city retirees. The analysis likely will lower the projected 8 percent rate of return for the city’s pension plans.
Mayor Bloomberg has already allocated $7.4 billion to fund the city’s five pension systems next year, up a worrisome 13 percent from the $6.6 billion being spent this year. When Bloomberg took office in 2002, taxpayers contributed just $1.3 billion toward the pensions of city workers.
Governor Cuomo’s 2012-13 budget, to be presented later today, will command media attention for the rest of the week. Advance reports on his modified pension reform proposal are especially promising. Meanwhile, there’s a (fiscally) cost-free approach to helping local governments and school districts alleviate their budget problems: repealing the Triborough Amendment. Read More
Governor Cuomo’s proposal to cap arbitration awards for police and firefighters is not included in the Senate or Assembly budget bills. This may be blessing in disguise: as argued here, Cuomo’s original proposal didn’t go nearly far enough. Since the arbitration law expires on June 30, the governor remains in a commanding position to demand more. Read More
Employee compensation in the state and local government sector increased at twice the private-sector rate during the 12 months ending in December, according to national data released todayby the federal Bureau of Labor Statistics.
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“Mandate relief remains elusive,” is one of the state-related headlines in today’s Albany Times Union — and that much, at least, is true. Unfortunately, the articlebeneath the headline repeats a familiar canard about the origins of the Triborough Amendment. Read More
Oneida County employees participating in a proposed cash buyout program would have a strong incentive to get their co-workers to join them: their payments will increase if more employees participate. Read More
Should physicians, who are licensed by the state of New York, be required to take a civil service exam in order to work for the state of New York? A state judge thinks so, but that's unlikely to be the last word on the controversy. Read More
As schools open, the number of school districts at impasse with teacher unions has increased by 12 percent since a year ago, according to the Public Employment Relations Board. Also noteworthy--although not emphasized by PERB--nearly one out of three school districts has yet to negotiate a new contract with its teachers. Read More
New York City will track the whereabouts of its 379 building inspectors with GPS technology installed, not in their city-issued vehicles, but in their cell phones. Read More