Citing Detroit, Bloomberg urges city to take action on pension and health care costs

Credit: Edward Reed/New York City Mayor's Office
Credit: Edward Reed/New York City Mayor’s Office

Citing Detroit’s filing for bankrupcy, Mayor Michael Bloomberg cautioned against the city’s rising pension and health care costs in a speech at a Brooklyn incubator Tuesday.

“It would be easy to sit back and think that what happened in Detroit could not happen here in New York City,” Bloomberg said, adding, “we would be foolish to ignore the factors that drove Detroit to bankruptcy.”

After touting New York’s economic growth in his administration—diversifying the economy has led to a 303 percent increase in jobs lost during the 2008 recession—Bloomberg said rising pension and health care costs are the biggest risks the city’s faces.

In 2002, the city’s pension costs were $1.4 billion. But by 2009, they grew to $6.3 billion. Some 95 percent of city employees and retirees contribute nothing to basic health care premiums, Bloomberg said, according to prepared remarks.

This year, the city’s pension costs are about $8 billion, in addition to $6.3 billion on health insurance.

“The next mayor will have an unprecedented opportunity to win pension and health care changes from the city’s labor unions,” Bloomberg said, noting union leaders have gone about four years without new contracts.

“The reality is, we may be a long way from Detroit,” Bloomberg said. “But we are only a short distance from relapsing into decline.”

At an unrelated press conference Tuesday afternoon, City Council Speaker and mayoral candidate Christine Quinn said negotiating union contracts would be “one of the most important first tasks as mayor.”

“You can’t spend more money than you have. That doesn’t help the city and it doesn’t help workers,” Quinn said.

Former MTA chair and Republican candidate for mayor, Joe Lhota, also said he would combat the problems cited by Bloomberg.

“The day after I am elected, I will begin working with the city’s union leaders to develop a strategy that will result in collective bargaining agreements fair to the workers and the public,” Lhota said in a statement.

GOP candidate and Gristedes Foods head John Catsimatidis said in a statement he was concerned “career politicians in this race will give away the store by promising the unions what they want in order to win their endorsement for the election.”

Follow Anna Sanders on Twitter: @AnnaESanders



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