McMahon: Albany not helping NYC avoid fate of Detroit

New York City Mayor Michael Bloomberg (Jan. 18,

New York City Mayor Michael Bloomberg (Jan. 18, 2013) (Credit: Getty Images)

E.J. McMahon

E.J. McMahon is a senior fellow for the E.J. McMahon

E.J. McMahon is a senior fellow at the Manhattan Institute


Mayor Michael Bloomberg warned last week that if New York City fails to control unsustainable employee compensation costs, it could find itself trapped in the same "downward cycle" as bankrupt Detroit:

"We are only a short distance from relapsing into decline, if we allow health care and pension benefits to crowd out the investments that make New York City a place where people want to live, work, study and visit."

Give Bloomberg credit for trying to inject a dose of fiscal reality into a mayoral campaign otherwise dominated -- on the Democratic side, at least -- by appeals to special interest groups, occasionally interrupted by fresh evidence of Anthony Weiner's surpassing weirdness.

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But while the mayor intended to put his would-be successors on the spot, his speech also provided important reminders of the extent to which the city's bargaining position in ongoing contract negotiations has been hemmed in by Albany.

Bloomberg noted, for example, that state law has forced the city to continue giving pay raises to employees whose most recent contracts expired three or four years ago -- something union leaders invariably gloss over when they demand retroactive pay hikes the city can't afford.

The provision in question, known as the Triborough Amendment, creates similar costs and collective bargaining disadvantages for municipalities and school districts throughout the state. Yet Gov. Andrew Cuomo has made it clear he won't lift a finger to change the law.

Bloomberg also pointed out that the city has benefited from Gov. David Paterson's 2009 veto of legislation renewing a 33-year-old pension sweetener for city police officers and firefighters. Cuomo had a chance to emulate Paterson this year by refusing to renew an even older "temporary" binding arbitration law that undermines the city's ability to seek contract concessions from its police union. Unfortunately, the governor elected to placate labor -- keeping the arbitration law in place for three more years with only minor tweaks that won't help the city.

By all means, the mayoral candidates should feel pressure to explain what they'll do to stop New York from following Detroit into fiscal perdition. But a year in advance of a gubernatorial election, taxpayers shouldn't let Cuomo off the hook, either.

E.J. McMahon is president of the Empire Center for Public Policy and senior fellow at the Manhattan Institute.