NYC Mayor Bloomberg Backs Governor Cuomo’s Pension Overhaul

New York Mayor Michael Bloomberg told state lawmakers he backs Governor Andrew Cuomo’s proposals to increase payments for Medicaid, reduce pension-benefit costs for future workers and impose evaluation standards on teachers.

The mayor told a joint session of the Legislature in Albany of his “strong support” for many of Cuomo’s priorities in the $132.5 billion proposed budget. He set aside past disagreements with the Democratic governor over taxi legislation, fingerprint requirements for food-stamp applicants and infrastructure payments for the 9/11 Memorial & Museum at Ground Zero.

“The governor has set an agenda for this session that is both far-ranging and ambitious,” Bloomberg said, citing the pension changes and teacher evaluations as his top two points of agreement.

Bloomberg, a 69-year-old independent, presented his view of Cuomo’s budget as he prepares a preliminary fiscal 2013 spending plan for the most populous U.S. city. To balance his budget, now estimated at about $70 billion, he must close a $2 billion deficit, he said in November. His proposal is due by the first week of February.

Medicaid Savings

New York City may save $11 million if Cuomo’s plan for the state to gradually take over increases in Medicaid costs is approved by lawmakers, according to budget documents. In a report released today, Fitch Ratings said the shift may benefit the city, counties and other localities.

Over the next 30 years, the city would also save $30 billion if Cuomo gets approval for his plan to raise the retirement age for new workers to 65 from 62 and give them the option of picking a 401(k)-type retirement plan instead of a government pension, budget documents said. Pension costs account for more than 12 percent of the city’s budget after rising to $8 billion annually from $1.5 billion in 2002, Bloomberg said.

“That’s something that city taxpayers, and city workers should all want to see happen,” Bloomberg said.

Public-worker unions say they don’t want it and have been fighting the plan since Cuomo announced it Jan. 17.

“The proposal for a new public employee pension tier is an assault on the middle class and a cheap shot at public employees,” Danny Donohue, president of the Civil Service Employees Association, the state’s largest public-workers union, said in a statement e-mailed Jan 17.

School Funds

Unions also have resisted Cuomo’s plan to withhold school districts’ share of a 4 percent increase in education funding unless they put in place a new teacher-evaluation system by Jan. 17, 2013. Lawmakers approved the extra spending as part of last year’s budget, bringing the total to $20.3 billion for fiscal 2013, or about $800 million more than in the current year.

School districts haven’t adopted a teacher-evaluation system, even as federal officials say $700 million from President Barack Obama’s Race to the Top program could be withheld if they don’t.

New York City would get an additional $224 million in state aid for its schools in Cuomo’s proposed budget, according to budget documents.

Bloomberg said he “strongly supports” Cuomo’s emphasis on teacher evaluation because “the education of every student in our city and state is on the line.”

9/11 Clash

Bloomberg and Cuomo have clashed over more than $300 million each says the other owes to finish work on the 9/11 Memorial & Museum. The dispute will probably postpone the museum’s scheduled Sept. 11, 2012, opening, the mayor has said. Work has stopped while the mayor and the Port Authority of New York and New Jersey, which owns the 16-acre World Trade Center site, try to resolve the disagreement.

The governor, who controls the Port Authority with New Jersey Governor Chris Christie, says the memorial foundation owes the agency $300 million for infrastructure work. The mayor, who is the memorial foundation’s chairman, says the Port Authority was responsible for that work, and owes the foundation $140 million for construction delays.

Cuomo also had threatened to veto a bill sought by Bloomberg to permit private livery cars to pick up passengers on streets outside Manhattan. (The two sides later reached an agreement on that plan.) He rejected Bloomberg’s policy to fingerprint food-stamp recipients to help deter fraud.

Working Together

The mayor has also said the city might stop using the state’s public insurer, EmblemHealth, if Cuomo went ahead with a plan to sell it. Of the governor’s plan last year to increase the tax rate on high-earners, later approved by lawmakers, the mayor said, “fundamentally you cannot tax your way out of problems.”

“We both have our constituencies, we both have our ideas, you have to work together,” Bloomberg said today in Albany after meeting with Cuomo. “We work together well. It doesn’t mean I’ll get everything I want, doesn’t mean he gets everything he wants.”

The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

To contact the reporters on this story: Freeman Klopott in Albany at fklopott@bloomberg.net; Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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