Tuesday, February 21, 2012
From the NY Post:
Liu cheerfully admits: “The city is spending more money than it takes in.” But he won’t admit that the biggest reason is public-worker pensions and health benefits, which cost $16 billion a year. He’s mum about health benefits and on pensions insists everything is great.
He insists that new public workers don’t have to make any of the changes that Gov. Cuomo has suggested: working longer, contributing more or shifting to private-pension accounts. Instead, Liu claims we can fix the pension crisis with some housekeeping — saving money on fees to the managers who invest the city’s pension funds and getting better returns on those investments.
Cutting fees is fine. But chasing higher returns usually means taking greater risk — meaning taxpayers, who guarantee pension benefits, could pay even more in the future.
Nor does either move come close to solving the problem.
Liu wants to gamble with pension money in another way, too — by increasing the pension funds’ role as a political slush fund. The city already puts $1 billion in pension-fund money into “economically targeted investments” — such as “affordable” housing. Liu would expand such investments to small businesses — likely minting campaign donors interested in this cash.
His other big idea is taxes — raising them for people who make more than half a million dollars a year. In his speech, he said “equality” is just as important as economic recovery.
Yet the “top 1 percent” pays 43.2 percent of city income taxes, on earnings that comprise 33.8 percent of city incomes. If a few of these taxpayers leave town, New York would end up losing money, thanks to the tax hikes.