According to City Comptroller John Liu, all those warnings you’ve been hearing about the escalating costs of public employee pensions and health benefits are wrong. Mr. Liu recently put out a report that argues that the cost of pensions and benefits actually will go down beginning in 2016.
Did we mention that Mr. Liu is a potential mayoral candidate in 2013 who hopes to cash in on the support of the city’s public employee unions?
Mayor Michael Bloomberg, who has been trying desperately to reform the system before it forces the city into bankruptcy, was rightly skeptical of Mr. Liu’s facts and figures. Mr. Bloomberg’s office noted that Mr. Liu’s report assumed that life expectancy rates will not change in the coming half-century. Perhaps the comptroller knows something that the rest of us don’t?
Mr. Liu’s study may be flawed, but it is not without good news: some hard-won reforms in the city’s pension system, including a tiered system for newer employees, are bringing down long-term costs. Mr. Bloomberg and others have been arguing for years that the current system, with defined pensions and generous health-care coverage, is simply unaffordable.
The city and state simply cannot afford the kind of pension and health-care benefits they have offered in the past, when life expectancy and health-care costs were lower. Public employees perform honorable work, but should they really be eligible for retirement while still in their 50’s, or even their late 40’s—when many file their papers, collect their benefits and launch second careers?
The system remains in desperate need of radical change. Mr. Liu is determined to resist those changes in return for union support in 2013. Something to keep in mind as the shadow campaign to succeed Mr. Bloomberg begins to take shape.