Mayor's Rough Draft

There is no question that the city faces a serious budget problem for the fiscal year that begins July 1, and that some painful measures will need to be taken to close it.

But the spending plan presented by Mayor Bloomberg Jan. 30 should be viewed as a rough draft—in more ways than one—to a greater degree than usual. That much should be clear by the fact that it includes the possibility of 15,000 education job cuts.

Other than some of the bright boys and girls at the Manhattan Institute, nobody thinks this is a feasible idea, and that includes the man who is banking on having the Legislature extend mayoral control over the schools and using the progress seen in education here to make his case for a third term.

And so the job-cut figures should be viewed as the Mayor's version of the Washington Monument, which Federal agency heads have been known to include in their list of items to be cut from the budget in order to elicit gasps of horror from Congress, followed by efforts to find alternative solutions.

In this case, Mr. Bloomberg is looking to get the attention of Governor Paterson, who has proposed a $770-million cut in state education aid to New York City as part of his own deficit-closing proposal. He was hoping to get the angry response from United Federation of Teachers President Randi Weingarten that she delivered a few hours after his budget speech, presumably followed by an urgent message to the Governor to reconsider his planned cut.

One option the Mayor presented as an alternative painkiller—reduced pension rights for future city employees— seems unlikely to go very far, judging by the reaction of the State Senator who took over that body's Committee on Civil Service and Pensions last month. Diane Savino based her opposition on several facts, all of which we've noted previously in this space, but the most-cogent one is that the measure would produce little if any savings over the next 17 months.

Long-term, according to Mr. Bloomberg, the savings would be considerable: a total of $7 billion by 2029. But whether reducing this aspect of employee compensation is worth the savings, given the effect it will have on recruitment and retention of good personnel, is not something that should be decided in the heat of a budget crisis that could prove to be short-lived.

There is a reason that the pension systems do not revise their estimates on earnings based on one good or rotten year, and when they do make adjustments, it is usually in quarter-point increments even when earnings have gone up or down in larger quantities over several years. Those gradual recalculations reflect the tendency of the stock market to experience dramatic fluctuations but then to level off.

For a good part of this decade, pension earnings have been off, but for the last half of the 1990s they boomed right along with the stock market. That dramatic shift is largely responsible for the city's rising pension costs in recent years, but the structural problem the Mayor sees now could diminish sharply within the next couple of years if the market makes a comeback.

Mr. Bloomberg also put forward a proposal that employees pay 10 percent of their basic health-care costs. The municipal unions have rejected this idea in the past, but it gained some traction when Transport Workers Union Local 100 agreed to have its members pay 1.5 percent of their total earnings toward health-care premiums under its recently expired contract. There have been ongoing negotiations between the Mayor's Office and the unions on this subject, and this could turn into the major battleground for the two sides between now and June.

In the interim, though, the job-cut figures should be taken for what they are: an attempt to create enough fear to get the attention of the interested parties, rather than an indication of what the final toll will be.