NYC Budget Deficits May Be Larger

Another issue is the dreaded Wall Street bonus. If these get cut the city collects less income tax which must be made up off the backs of everyone else. Those beggging for lower Wall Street bonuses should consider the ramifications.

the big issue of the fiscal situation at all gov levels is the cost of the aging population. pensions and health care benefits are underestimated across the board imho.

I think NYC fixed its pension accounting; the problem is Medicaid and reduced state subsidies. That's not to say that pensions don't need to be fixed, but I believe they're properly accounted for.

No one's "begging" for lower Wall Street bonuses, RS - it's a question of reasonableness, given that heads they win - if earnings are good - and tails they win - the government bails them out. The risk/reward is all wrong, and you, libertarian that you claim to be, should be the first to admit it: had the government not intervened 2 years ago, there would be no Wall Street.

ok redbaiter..ive considered and ill give in on this one: youre right...the city's fiscal issues can be cured by overpaying wallstreeters like never before..think of the tax revenues!! one of your best ideas ever!!

notadmin,
Pension issue is huge, New Yorkers voted for the ostridge approach in turning down Harry Wilson for state comptroller instead of Dinapoli. We'd be better off if they fixed the retirement and pension system so they could keep more fireemn,cops,etc instead of paying people not to work.

RS, you're confused (again). One thing is pension accounting, another is managing a pension fund, and a third is changing the pension system. You need to send LICCdope a text asap, so he can explain the difference to you: it's somehow related to the difference between trading bonds and managing a bond fund.

HAHAHAHA!

Not Harry Wilson, nor Woodrow Wilson, nor Edith Wilson can unilaterally change pension agreements in NY. It will take a) a constitutional amendment; and b) collective bargaining.

Here I'll agree with you: we need Margaret Thatcher.

Fixing the pension accounting is largely WHY to deficits will be so big, dummy. It makes the expenses accurate.

The pension accounting system has been fixed, and NYC is one of the few governments that has done so. But it is based on actuarial calculations, which rely on estimates and assumptions wherein a small change can make a big difference.

my guess is that they will have to begin by cutting health care benefits to current and future retirees. that's already half of the cost per retiree and the part that grows the most. besides, it's not guarantee by the constitution, hence higher co-pays can be required without making a legal mess.

"We'd be better off if they fixed the retirement and pension system so they could keep more fireemn,cops,etc instead of paying people not to work."

Yes, because we will be so much safer with 65 year old fire fighters.

No, because we'd be better off with more younger fire-fighters. 50 is not old, there are plenty of tasks they
can do that generate value as opposed to collecting benefits and doing another job. The truth is that municipal
and state workers don't contribute enough to their retirement and retire too early. It's great to be generous, but
our politicians have been generous with OUR MONEY!

Most govt. workers can't retire at young ages. Firemen and cops have a special pension plan (20 years regardless of age). In the MTA, for instance, you can't retire before 50, even if you started working for them at 19. So that's 30 years right there. Is that not enough?

Riverfktard says 'don't wish for the cure for cancer, think of all the out of work oncologists!'.

U can't make this shit up.

Not to mention that cutting benefits will make it harder to recruit good candidates and will only fuel the exodus to the higher paying suburban police departments. Why make $76k at the NYPD when you can go to NJ and make $125k? And that's before overtime...

Most govt. workers can't retire at young ages

This has to change. A century ago the life expectancy rate was a fraction of what it is today.
Today we live longer. Rules and benefits have to change.

"Today we live longer."

-------------------

U.S. Life Expectancy Declines

http://news.discovery.com/human/united-states-life-expectancy-101210.html

Socialist, If we raised pay and reduced benefits, we'd get more and better qualified candidates and save money.
It's not the salaries but the benefits that are killing us. And 20 year olds don't take jobs based on retirement packages. And 20 year olds are at that age where they can adapt and switch to 401k style based solutions.

And are people REALLY living longer? When someone is in a nursing home with Alzheimers and does not know their own name and shits on themself everyday, are they really still "living?

Note to developers: Convert unsold condos into nursing homes. BIG $$$$$

"And 20 year olds are at that age where they can adapt and switch to 401k style based solutions."

TRANSLATION: 20 year olds are stupid and can invest in 401k plans that wll be wiped out before they retire.

That's a harsh translation socialist.
Perhaps a better translation is that 20 year olds have different priorities and prefer cash to
benefits that are years in the future. Those of us in the private sector have long ago switched to a 401k
arrangement. If you start young and invest in index funds responsibly the results are fine. And the money
goes into the real economy funding real companies, and generating good returns for those that invest.

river:

what are your credentials re: 20 year olds?

FEDERAL employees are just fine without pensions

"TRANSLATION: 20 year olds are stupid and can invest in 401k plans that wll be wiped out before they retire. "

If all the 401ks are wiped out, then we'd have a government unable to pay defined benefit pensions anyway.

So, you lose that point...

"50 is not old"

Tell that to LICCdope.

http://www.ritholtz.com/blog/2010/12/buy-hold-vs-trend/

"FEDERAL employees are just fine without pensions"

What do you consider FERS then?

riversider is absolutely right. The excessive pensions and benefits of unionized government workers is a major problem for government budgets. Reasonable, common sense reforms such as replacing defined benefit plans with defined contribution plans, and having employees pay 20-30% of health care premiums, will go a long way to fixing the budget problems.

For once I agree with LICCdope.

I'm sure I'll live to rue the day....

"What do you consider FERS then?"

What are you stupid? Its a defined contribution plan, like a 401-k. The Federal Government is under NO obligation to pay for pensions of Federal workers, which is why you only hear about this at the state and local level.

And to be clear, they have both a 401-k style plan and purchase annuities, rather than having a Federal version of CALPERS. So the government is never on the hook.

"Perhaps a better translation is that 20 year olds have different priorities and prefer cash to
benefits that are years in the future."

So what. Lots of 20 year olds don't have health insurance because they think tey will never get sick or injured. But when they do, they stick us with the bill.

"Those of us in the private sector have long ago switched to a 401k
arrangement."

So what? Who cares about the private sector? They switched to 401ks to save money and enrich themselves.

"Reasonable, common sense reforms such as replacing defined benefit plans with defined contribution plans, and having employees pay 20-30% of health care premiums, will go a long way to fixing the budget problems."

Why not reduce healthcare costs by 20-30% instead by enacting single payer? Of course, you don't support single payer, because you fools are still delusional and think that all of our problems will be solved with tort reform.

"Retiree Care to Cost San Francisco $4.4 Billion
By ELIZABETH LESLY STEVENS 8:09 PM ET

San Francisco faces a $4.4 billion total for lifetime health-care benefits for retired city employees and their dependents, the controller has found...."

http://www.nytimes.com/2010/12/17/us/17bcbenefits.html?hp

"...The city has set aside $9.7 million to cover the costs...."

Its get better..."To put the $4.4 billion liability in perspective, San Francisco has borrowed $2.6 billion through general obligation bonds in its entire history."

> Retiree Care to Cost San Francisco $4.4 Billion

well, obviously the benefits will have to be cut for current retirees and near future ones. higher co-pays, lower overall coverage. the city will pay what it can, i don't imagine that this structural permanent costs can be financed. the first few years maybe, but not for say, the entire next 20 to 30 years. cutting health care benefits is a preferred outcome than pushing the city towards bankruptcy (same for nyc) in which case those benefits will be cut much more. only the pension check is protected by constitutions.

....and the story says SF ALSO has hundreds of millions in unfunded pension liabilities. This story is typical for both liberal cities and red states. Its a national problem.

http://www.cepr.net/index.php/blogs/beat-the-press/nyt-scare-story-on-sf-retiree-health-care?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+beat_the_press+%28Beat+the+Press%29

"What are you stupid? Its a defined contribution plan, like a 401-k. The Federal Government is under NO obligation to pay for pensions of Federal workers, which is why you only hear about this at the state and local level."

Did you miss your meds today jason?

"Your FERS pension is a defined benefit program. "Defined Benefit" means the amount you *get* is defined or fixed. It doesn't matter how much money you contributed - the monthly income from your pension will be a fixed amount based on certain factors."

"In the MTA, for instance, you can't retire before 50, even if you started working for them at 19. So that's 30 years right there"

Is your argument really that MTA workers all started at 19?

You might as well just give it up then.

It does not matter what age you started at fool. YOu have to put in 30 years to get a pension.

"Did you miss your meds today jason?"

No, but FERS does NOT involve the Federal Government having to fund a pension. The employees fund annuities. How anyone could be so stupid as to conflate the two is beyond me. If states had this set up, we would not even be having this conversation, because all pensions would be privately managed, not state managed, and would be be fully funded at all times.

So who is responsible for making up the difference if FERS has a deficit? The retired Federal employees just eat it?