Bloomberg has been warning city agencies to tighten their belts due to a downturn in real estate and Wall Street, but is there more to the city's upcoming fiscal woes? The New York Times certainly thinks so, and The Gothamist points out an interesting connection to former Mayor John Lindsay.
From The Gothamist:
Now The New York Times is reporting that the deals the Mayor has made with city unions may have hamstrung city budgets long after the billionaire politician has left office. Basically, these generous pay raises to unions including the police sergeants', sanitation workers', and police detectives, will lead to "expenses that stand to outpace revenue, especially toward the end of the city’s four-year spending plan."Contracts like those as well as ones with city teachers (that boosted pay 40%) and with FDNY brass, may have left the city in the lurch long after the mayor's left office. Some critics are concerned, suggesting that the costs may force downsizing in the future, but Deputy Mayor Ed Skyler said, "You have to deal with these expenses whether you put them in the financial plan now or later. Not including them at this point would be burying your head in the sand.”
The historical parallels to Mayor John Lindsay are worth mentioning. Lindsay was a Rockefeller Republican from the Upper East Side, much like Mayor Bloomberg. His negotiations with the city's public unions wound up being calamitous to the fiscal state of New York. The aftermath led to the city verging on the brink of bankruptcy and the turmoil of 1977.
Is New York in for another bankruptcy? I certainly hope not, but the numbers are not very comforting to say the least. Bloomberg's plan to save $500 million by cutting agency spending in the next budget might help in the short term, but those salaries could be devastating over the long run. Remember, the glitzy and glamorous New York everyone sees now is superficial for the most part. Just because there are several hundred Starbucks and even more bank branches does not mean all of the city is fiscally solvent.
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