It has become clear in recent months that City Comptroller John Liu lives in an alternate universe. He seems to think he still is a credible candidate for next year’s mayoral election. He apparently believes that the public will forget about his false promises to identify his fund-raising bundlers—as the law requires. He presumes to lecture Wall Street about ethics, even though his campaign treasury is under federal investigation.
And now Mr. Liu, in partnership with his friends in the labor movement, seems intent on blocking public employee pension reform—which is nothing less than a financial life-or-death issue for both the city and the state.
If Mr. Liu had any shame, he’d keep his head down and hope that the ongoing probes of his murky fund-raising practices don’t hit too close to home. If he had any self-awareness, he’d know better than to go public on an issue that both Governor Cuomo and Mayor Bloomberg rightly see as absolutely critical to New York’s fiscal health in the 21st century.
But Mr. Liu seems intent on calling attention to himself. And he has succeeded, for all the wrong reasons. Last week, the comptroller issued a report that ostensibly concerned itself with retirement savings for all New Yorkers. (Why the comptroller, as the guardian of the city’s municipal finances, should be studying retirement patterns for private-sector workers remains an unanswered question.) In reality, however, the report was timed and designed to argue against the governor’s plan to win significant pension savings over the next three decades.
Specifically, Mr. Liu’s report assailed Mr. Cuomo’s proposal to shift from defined-benefits pensions to 401(k) plans—or more modest traditional pensions—for new and future public employees at the state and local levels. Mr. Cuomo’s office figures that the reform will save $1 billion a year over the next 30 years.
Mr. Liu specifically targeted the 401(k) plans, saying that they threaten “retirement security.” Actually, the greatest threat to “retirement security” is the status quo. Albany and local governments in New York simply cannot afford traditional pension benefits. The city, for example, already pays more than $8 billion a year in pension costs for retired public employees. Even by New York City standards, $8 billion a year is big money.
The state and local governments are moving closer to a day when they will have to choose between writing checks to pensioners and writing checks for necessary services. That’s not fair to anybody, especially when actions taken now can prevent these sorts of terrible choices.
As comptroller, Mr. Liu is supposed to be looking out for the well-being of the city treasury. Pension reform is an absolute necessity if the city is to avoid dire fiscal straits in the coming decades. A responsible public official would realize the urgent need for sensible reform.
But responsibility took flight from the comptroller’s office a long time ago. Luckily for the city’s fiscal health, nobody pays much attention to John Liu anymore. With good reason.