City comptroller William Thompson released his regular “state of the city’s finances” report today. It’s not necessary to go into the gory details, since it’s past time for everyone simply to stipulate that things are ugly so that we can get on with life. The good news, though, is that the solution, too, is found in the ugly parts.
According to Thompson’s projections, the city’s spending, adjusted for various gimmicks, will grow by 11.1 percent over the next three years. But pensions will grow by 21.8 percent, health insurance for city workers by 18.9 percent, and debt service by 29.5 percent. Medicaid, while the state has picked up most annual growth costs, still clocks in with a 7.9 percent increase over the same period. Spending under the “campaign for fiscal equity” education lawsuit of a few years back will rise a whopping 56 percent.
In three years’ time, absent change, such costs will consume 56 percent of the city-funded budget, up from 51 percent now. Dollar growth here is $4.8 billion, just $100 million shy of the projected deficit for 2012.
It is a mathematical fact that New York cannot close its deficits without the unionized labor force giving something back in terms of pension and health benefits, in the form of higher contributions, lower future benefits, or, likely, a combination of both.
It’s also a mathematical fact that we can’t continue to spend the way we do on healthcare and education; these areas need disproportionate cuts — not just their “fair share” of across-the-board cuts — in the city budget.
Trying to close budget gaps without addressing these issues is a losing game.
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