Bloomberg warns successor on pensions, health care costs

Mayor Bloomberg discusses how NYC's municipal economic and Mayor Bloomberg discusses how NYC's municipal economic and fiscal policies have helped the city thrive and the challenges that could derail continued progress. (Aug. 6, 2013) Photo Credit: Mayor's Office

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Mayor Michael Bloomberg Tuesday warned that his successor needs to control pensions and health care costs for city workers or risk pushing the Big Apple toward insolvency like Detroit.

Bloomberg, in a speech at a Brooklyn business incubator where drug giant Pfizer had operated, said these costs threaten how much the city can spend on services that attract new residents and keep current ones from fleeing.

"The less it invests in things that benefit all residents, the less attractive a place it is to live and visit," Bloomberg said, adding that the gains the city has made could unravel. "In New York City, that risk is still very real."

City workers -- from teachers to civilian employees to police -- have been working under expired contracts for several years. The next mayor will have to negotiate with unions on issues like raises, retroactive pay and contributions to health care and pension benefits.

The city would have to pay $8 billion in 2014 to cover the pay raises for all city workers since their last contract expired, the mayor's office said. Health insurance will cost $6.3 billion; 95 percent of the city's workers contribute nothing to premiums, Bloomberg said. The mayor also said pension costs have risen to $8 billion a year, from $1.4 billion early in his first term.

Carol Kellermann, president of the budget commission, said the next mayor would have to convince union leadership that retroactive raises are unaffordable and city workers should contribute more to health care, like government and private employees elsewhere.

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Democratic contenders City Council Speaker Christine Quinn, former city Comptroller Bill Thompson and Public Advocate Bill de Blasio have refused to lay down specifics on future contract negotiations in public.

Former Rep. Anthony Weiner has proposed city workers pay a "small portion" of their health premiums and asked those who smoke to contribute more.

City Comptroller John Liu slammed Bloomberg's inability to negotiate new contracts as a "dine-and-dash."

Democratic Candidate Sal Albanese, a former city councilman, proposed exchanging retroactive pay for an agreement to "modernize" city workers' pension and health care plans.

Republicans Joe Lhota, a former MTA chief, and Doe Fund founder George McDonald oppose retroactive pay and would require more contributions from workers. A spokesman for Gristedes magnate John Catsimatidis said the candidate would not negotiate in public.

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Michael Mulgrew, president of the United Federation of Teachers, which is backing Thompson, panned Bloomberg's remarks as "self-congratulatory speechmaking." DC37, the city's largest public employee union, which endorsed Liu, did not respond to request for comment.

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