By Jennifer Peltz
Mayor Michael Bloomberg is leaving the nation's biggest mayoral job with a glowing view of cities' future but a stern warning that they face a serious threat: public worker pension and health care costs and the politics around them.
"It's clear that the golden age of the suburb is over, and it's being replaced by a new urban renaissance" in which cities are magnets for people and pioneers in policy, Bloomberg told The Economic Club of New York during what was envisioned as the last major speech of his 12-year tenure.
But "we cannot blind ourselves to the obstacles that stand in the way ... a growing fiscal crisis that, if nothing is done, will extract a terrible toll," he said.
Bloomberg has said previously, including in a major speech this summer, that rising pension and health care costs imperil progress in New York and other cities. But he painted the issue Wednesday in dramatic terms, lashing out at what he called a "fiscal straitjacket" for cities and a "labor-electoral complex that has traditionally stymied reform."
While labor leaders' job is to protect their members' interests, government officials need to protect society's future, but "the future that most elected officials worry most about is their own," he said, adding that re-election-minded officials become "prisoners to the labor contracts of yesteryear."
Bloomberg has been locked in an increasingly bitter clash with unions in recent years, during which contracts with virtually all city workers have been allowed to lapse as he pressed for employees to forgo back raises and pay more for health insurance. He says the city can't afford to do otherwise; union leaders have said he's unfairly trying to squeeze workers when the city has ended recent budget years with surpluses.
Especially since Detroit's recent bankruptcy, mayors in many cities around the country have begun pushing to change the pensions that have long been seen as a prized — sometimes the primary — benefit of government jobs. Some have proposed replacing or reducing traditional pensions in favor of what are called defined-contribution plans, like a 401(k), at least for new employees.
Bloomberg suggests New York City employees should have a choice between the two types of plans.
In New York, the annual pension cost has risen from about $1.5 billion a year to $8.2 billion a year in 12 years, draining money that could otherwise have gone to affordable housing, tax cuts, schools or a host of other purposes, Bloomberg said. And health insurance costs have doubled since 2002, to $6.3 billion this year, he said this summer.
Bloomberg, a billionaire businessman Democrat-turned-Republican-turned-independent, leaves office Dec. 31. His successor, Democratic Mayor-elect Bill de Blasio, hasn't said what he aims to do about the expired contracts, the potentially billions of dollars in back raises that unions are seeking or the problem of pension and health costs.