New York’s government workforce includes the hundreds of thousands of employees who staff state and city agencies, transit systems, and public services. This page covers CBC’s work on municipal and state headcount management, pension and benefit costs, collective bargaining, overtime spending, and strategies for improving operational efficiency.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The City and municipal unions should work together to modernize government.
Sharing the financial benefits of a more efficient government that delivers better services and improves career opportunities for City employees is a win-win.
Civic leadership must be willing to restrain its own special interest in favor of the greater good.
HUD should grant regulatory waivers that free up funding for NYCHA, such as permission to reinvest savings from reducing energy consumption, and that improve operations, such as waivers from onerous and outdated rules that prohibit the use of design-build, construction manager-build, or best value capital procurement for federally funded capital projects.
The monitor should appeal to HUD for federal regulatory relief that improves operations or frees up funding for implementation.
The monitor should increase focus on identifying and advocating for long-overdue work rule reforms, broader job descriptions, fringe benefit savings, operational changes, and other actions that would boost productivity and bring NYCHA’s operations in line with other property managers.
The monitor should publish data on NYCHA’s progress towards meeting specific benchmarks laid out in the agreement.
The monitor should publicly report its approved budget.
Key Data
(March 2026) Tier 6 enhancements in 2022 and 2024 cost State and local governments $438 million annually, and a 2022 estimate for just one of the additional proposed changes—to reduce progressive employee contributions—exceeded $700 million annually.
(Oct 2025) Twelve bills passed in 2025 have fiscal notes, which estimate costs of at least $30.0 million immediately and $18.1 million annually thereafter.
(Aug 2025) As of August 2025, the CBC estimated that using One-Person Train Operation (OPTO) systemwide could save $442 million annually, which could be reinvested to close the MTA’s structural operating budget gap.
(Dec 2022) The November 2022 Financial Plan demonstrated that increased pension costs widened future budget gaps to $4.6 billion in fiscal year 2025 and $5.9 billion in fiscal year 2026.
(Sept 2022) As of April 2022, the City had an authorized headcount of 333,129 for fiscal year 2023, but there were more than 28,500 vacant positions (23,793 full-time).
New York State's proposed Tier 6 pension enhancements threaten to cost billions of dollars annually, potentially driving up property taxes or diverting funds from other essential programs. Rather than increasing benefits, the state should focus on addressing recruitment challenges by improving pay and working conditions for hard-to-fill government positions.
Recommendations related to Government Workers
New York State should not enhance Tier 6 pension benefits, as the expansions would cost the State, local governments, and school districts billions of dollars annually.
State leaders should address the root causes of recruitment challenges, such as lower pay and challenging work conditions, rather than enhancing Tier 6.
Key Data
$438 million
— The annual cost of Tier 6 enhancements enacted in 2022 and 2024 to State and local governments.
$700 million
— The annual cost of just one of the additional proposed changes—reducing progressive employee contributions—based on a 2022 estimate.
2 percentage points
— The growth threshold in pension contribution rates that triggers an exemption to the State’s property tax levy cap.
Citizens Budget Commission held its 94th annual gala—a must-attend event for New York's business and Civic Leaders—on March 5th, 2026. CBC honored Lazard CEO and Chairman Peter Orszag with the Medal for High Civic Service, given to a current or former public servant who exemplifies CBC’s values and a dedication…
1,143 is the number of days Camille Joseph Varlack served in city government as Chief of Staff, Deputy Mayor for Administration and briefly First Deputy Mayor during the Adam's administration. A good Chief of Staff can make an administration—but they're rarely in the spotlight. On this episode of What's the…
791 is the number of staff the City Comptroller can employ for the vital task of auditing City agencies, managing the $306 billion pension fund, registering contracts, analyzing the budget, monitoring the economy—essentially serving as the people's check on the Mayor's office. This episode of What's the Data Point involves…
New York City faces a precarious budget situation where current revenues are insufficient to sustain spending, necessitating a focus on fiscal discipline and efficient service delivery. To ensure a bright future, the city must modernize government operations through collaboration with municipal unions and prioritize leadership that places the greater good above special interests.
Recommendations related to Government Workers
The City and municipal unions should work together to modernize government.
Sharing the financial benefits of a more efficient government that delivers better services and improves career opportunities for City employees is a win-win.
Civic leadership must be willing to restrain its own special interest in favor of the greater good.
Key Data
$453 million
— The amount of debt New York City had to repay 50 years ago, which it could not afford.
$120 billion
— The amount New York City currently spends annually, which can deliver a great deal if focused well and efficiently used.
New York State and local governments face increased fiscal burdens from 17 legislative proposals that would expand pension, disability, and death benefits for public employees without providing offsetting savings or enhanced services. These bills, which include measures like reducing service requirements and extending 'death gamble' benefits, would impose significant immediate and long-term costs on taxpayers.
Recommendations related to Government Workers
The Governor should veto the 17 bills that increase costs to New York State and local governments by expanding pension, disability, and death benefits without offsetting savings.
The state should reject the eight bills that would enhance pension benefits for public employees, as these increase costs outside the budget process.
The state should reject the nine bills that would expand disability or death benefits for public employees, as these increase costs without enhancing public services.
Key Data
$30.0 million
— Immediate costs estimated for 12 of the bills.
$18.1 million
— Annual costs estimated for 12 of the bills.
$5.9 million
— Annual cost of S6486/A6942, which reduces the service requirement for Tier 3 members of the Unformed Sanitation Force and Uniformed Correction Service.
$5.5 million
— First-year cost for S6671/A7360, which increases the pension benefit for certain Nassau County corrections officers.
$4.9 million
— First-year cost for S5083/A5898, which provides an in-service death benefit for retirement-eligible members of NYSLRS employed as State-paid judges.
$4.2 million
— Annual cost of S6640/A6784, which extends the 'death gamble' benefit to Tier 4 and Tier 6 Special Plan transit members of NYCERS.
The proposed legislation prohibiting one-person train operation would increase operating costs and hinder the modernization of subway services. By mandating the presence of conductors on most trains, the bill prevents the implementation of more efficient operational strategies used by transit systems worldwide.
Recommendations related to Government Workers
The Governor should veto A4873/S4091, which would prohibit the Metropolitan Transportation Authority from using one-person train operation.
The state should leave operational strategies and decisions to management to ensure the best, most flexible path to high-quality service at the lowest cost.
State laws should focus on ensuring agencies are high performing and transparent, and that management is accountable.
Key Data
$442 million
— Estimated annual savings from using one-person train operation systemwide, which could be reinvested to close the MTA’s structural operating budget gap or improve service.
$10 million
— Estimated annual cost of ceasing one-person train operation on the A, G, M, 5, and all shuttle services.
New York City employed 306,248 full-time and full-time equivalent workers in fiscal year 2024, with an additional 63,517 employees across covered organizations. Meanwhile, the State of New York maintained a workforce of 219,053 full-time equivalent employees during the same period.
Key Data
306,248
— Total number of full-time and full-time equivalent employees for the City of New York in fiscal year 2024.
369,765
— Total number of full-time and full-time equivalent employees for the City of New York and covered organizations in fiscal year 2024.
48,400
— Number of full-time and full-time equivalent police employees in the City of New York in fiscal year 2024.
219,053
— Total number of full-time equivalent employees for the State of New York in fiscal year 2024.
The Metropolitan Transportation Authority faces rising operating expenses, projected to grow by 3.3 percent annually through 2026, partly due to a tentative labor agreement that would increase annual costs by $330 million. To ensure long-term stability, the agency and union leadership must implement productivity improvements, such as expanding one-person train operations and modifying shift parameters.
Recommendations related to Government Workers
The MTA and union leadership should implement changes to increase productivity and flexibility, including expanding One-Person Train Operation, increasing worker availability, and modifying shift parameters and job duties to improve labor efficiency.
The MTA and union leadership should collaborate to work smarter to ensure all stakeholders contribute to a stronger workforce and agency.
Key Data
$330 million
— The amount by which annual labor costs will exceed the budget by 2026 if the tentative Transport Workers Union (TWU) pattern is adopted system-wide.
3.3 percent
— The projected annual increase in the MTA’s operating expenses from 2023 to 2026, driven by added labor costs.
New York City faces significant long-term fiscal challenges, including the need to manage over 24,000 vacant full-time positions and potential budget gaps exacerbated by future collective bargaining costs. To ensure future stability and preserve services, the city must prioritize improving operational efficiency and strategically reallocating staff to critical functions.
Recommendations related to Government Workers
The City can and should both hire for critical functions and eliminate many more, ultimately unneeded, positions.
The City and agencies should have flexibility to shift vacant positions across and within agencies to units and titles that have critical staffing needs.
The City must improve the quality and efficiency of the City’s operations to preserve services for New Yorkers.
Key Data
2,000
— The number of vacancies reduced annually in fiscal years 2024 and 2025 under the November Plan.
24,000
— The number of vacant full-time positions remaining after the November Plan's reductions.
5,000
— The total number of vacant civilian positions expected to be eliminated by the Office of Management and Budget.
$350 million
— The expected annual savings from the elimination of roughly 5,000 vacant civilian positions.
3%
— The annual employee raise rate that would increase budget gaps by $800 million in the first year.
$2.5 billion
— The projected increase to budget gaps in the third year resulting from 3% annual employee raises.
New York City faces significant staffing challenges, with over 28,500 vacant positions despite an authorized headcount of 333,129, as rigid hiring processes and inflexible management hinder service delivery. To address these issues, the city must streamline recruitment, reallocate existing vacancies to priority areas, and modernize civil service practices to improve retention and attract new talent.
Recommendations related to Government Workers
The City should move available positions to where they are needed and increase the flexibility of processes used to control, allocate, and reallocate headcount.
The City should improve and speed up the processes and procedures it uses to control and manage hiring and to administer the civil service system.
The City should institute policies to increase retention of high-performing employees.
The City should modernize civil service and job paths to increase the attractiveness of public sector employment.
The City should report transparently on vacancies, hires, separations, and promotions.
Key Data
333,129
— Authorized headcount for fiscal year 2023.
304,461
— Full-time and full-time equivalent staff on board as of April 2022.
28,500
— Vacant positions as of April 2022.
246 days
— Median time between exam administration and results in the first four months of fiscal year 2022.
21,551
— Decline in on-board full-time and full-time equivalents from March 2020 to April 2022.
326,739
— Pre-pandemic high of full-time and full-time equivalents.
The New York City Housing Authority's federal monitorship has led to some operational improvements but has failed to address underlying fiscal and structural inefficiencies, including high labor costs and rigid work rules. To achieve long-term sustainability, the monitor and federal authorities must prioritize labor reforms, regulatory relief, and transparent performance reporting rather than relying on open-ended city funding.
Recommendations related to Government Workers
HUD should grant regulatory waivers that free up funding for NYCHA, such as permission to reinvest savings from reducing energy consumption, and that improve operations, such as waivers from onerous and outdated rules that prohibit the use of design-build, construction manager-build, or best value capital procurement for federally funded capital projects.
The monitor should appeal to HUD for federal regulatory relief that improves operations or frees up funding for implementation.
The monitor should increase focus on identifying and advocating for long-overdue work rule reforms, broader job descriptions, fringe benefit savings, operational changes, and other actions that would boost productivity and bring NYCHA’s operations in line with other property managers.
The monitor should publish data on NYCHA’s progress towards meeting specific benchmarks laid out in the agreement.
The monitor should publicly report its approved budget.
Key Data
$1.2 billion
— Amount spent by NYCHA through calendar year 2021 on implementing the agreement's mandated action plans.
$933 million
— Total City operating support provided from fiscal years 2018 through 2021.
$32 million
— Total fees paid to the monitor and its sub-contractors to date.
500
— Number of additional staff NYCHA must hire to provide an adequate level of service under the proposed work order process.
310 days
— Average response time to complete repairs as of April 2022.
42 percent
— Percentage of NYCHA households that report three or more serious maintenance deficiencies.
The New York City Police Department's fiscal year 2023 budget includes $10.9 billion in spending, with significant increases driven by collective bargaining agreements and overtime costs. Despite these budget adjustments, meaningful reductions in overtime spending require the implementation of effective managerial controls and policy changes.
Recommendations related to Government Workers
Meaningful recurring reductions in NYPD overtime depend on effective managerial controls and changes to NYPD policies and procedures.
Key Data
$10.9 billion
— Total spending on the New York City Police Department in fiscal year 2023.
$743 million
— Estimated overtime spending by the end of fiscal year 2022.
$617 million
— NYPD overtime expenditures through April of fiscal year 2022.
$524 million
— Uniformed overtime spending in fiscal year 2022.
$372 million
— Uniformed overtime spending in fiscal year 2023.
35,030
— Authorized uniform headcount for the NYPD throughout the plan years.
New York City's executive budget added 3,011 new positions despite having 18,000 existing vacancies, effectively reversing 69% of previously planned savings. Instead of increasing headcount, the city should focus on redistributing existing vacancies and removing bureaucratic hurdles that prevent hiring for priority roles.
Recommendations related to Government Workers
The City should redistribute available vacancies across departments, within agencies, or across agencies rather than add new positions.
The City must reduce managerial and procedural roadblocks to hiring to ensure agencies can fill priority vacancies.
Key Data
18,000
— Number of vacant city jobs available.
3,011
— Number of new positions added in the FY 2023 Executive Budget.
69%
— Percentage of February Program to Eliminate the Gap (PEG) reductions reversed by the Executive Budget.
$1 Billion
— Amount of annually recurring savings from the Program to Eliminate the Gap.
7,026
— Number of vacant full-time positions eliminated in the Preliminary Budget.
New York City maintains a substantial number of vacant positions, with over 18,000 full-time roles available, suggesting that staffing challenges stem from inefficient management and hiring processes rather than a lack of authorized headcount. Improving the flexibility of headcount allocation and streamlining the civil service testing and hiring systems would better enable agencies to fill priority roles effectively.
Recommendations related to Government Workers
The City should increase the flexibility of its systems that control, allocate, and reallocate headcount to better align vacancies with priorities.
The City should improve the systems it uses to control and manage hiring and to administer the civil service system.
Greater flexibility to move headcount across agencies, within agencies across units, or to allocate vacancies agency-wide would improve the ability to hire priority staff.
DCAS should seek to leverage technology and other process reforms to speed up the hiring process.
Ensuring adequate, timely civil service tests and lists will speed hiring and encourage more to seek City employment.
Key Data
7,026
— Number of vacant full-time positions eliminated across 42 agencies by the Fiscal Year 2023 Preliminary Budget Program to Eliminate the Gap.
18,000
— Number of full-time employees the City could still hire even after the Program to Eliminate the Gap.
22,376
— Total number of vacant full-time positions that could be filled in the current fiscal year.
7.3 percent
— The vacancy rate for full-time positions based on December 2021 on-board staff and November 2021 authorized levels.
246 days
— The median time between exam administration and results in the first four months of fiscal year 2022.
New York City's preliminary budget for fiscal year 2023 includes the elimination of over 7,000 vacant positions, yet the city still maintains more than 18,500 vacancies. To improve fiscal stability, the administration should implement strategies to increase operational efficiency, such as modernizing contractual differentials and work rules, rather than relying on vacancy reductions.
Recommendations related to Government Workers
The Executive Budget should include a Program to Eliminate the Gap (PEG) targeting 3 percent in fiscal year 2023 and each year thereafter, focused on strategies that increase efficiency and reduce unit costs.
The Executive Budget should include efficiency savings from centrally managed services like space and fleet to reduce unit costs associated with government operations.
The administration should pursue strategies such as modernizing contractual differentials and work rule changes to increase efficiency.
Key Data
7,000
— Number of vacant full-time positions eliminated in the Preliminary Budget for Fiscal Year 2023.
26,000
— Number of vacant full-time positions the City had on December 31, 2021.
18,500
— Number of vacant full-time positions remaining for the City to hire necessary personnel.
New York City's workforce grew by nearly 30,000 employees between 2014 and 2019, and the incoming administration must now focus on achieving sustainable spending and workforce levels through attrition and labor negotiations. To manage costs, the city should implement reasonable health benefit premium sharing and negotiate work rule changes with municipal unions to improve operational efficiency.
Recommendations related to Government Workers
The incoming Administration should deploy a regular, periodic Program to Eliminate the Gap (PEG) that identifies and implements recurring savings and continued, modest workforce reduction through attrition.
The City should bring health and welfare benefit costs to sustainable levels, which requires negotiating changes with municipal labor unions.
Reasonable premium sharing at rates lower than those paid by New York State employees would reduce City costs significantly.
The City should work with labor to change work rules to optimize collection routes, increase flexibility in collection frequency to align with the amount of waste to be collected, and modernize labor differential payments to incentivize higher productivity.
City managers and labor should identify and work to change work rules that constrain operations.
Raises should be funded through savings from productivity gains rather than increasing City expenditures.
Consolidating the more than 100 separate welfare funds managed by various unions could provide comparable or better benefits at lower costs, due to administrative economies of scale and group purchasing power.
Key Data
327,110
— The peak number of the City workforce in September 2019.
30,000
— The increase in the City workforce from fiscal year 2014 to its peak in September 2019.
10 percent
— The percentage increase in the City workforce from fiscal year 2014 to its peak in September 2019.
$7.2 billion
— The total annual cost of City employee and retiree health benefits.
4.2 percent
— The average annual growth rate of City health and welfare benefit costs since fiscal year 2014.
The Governor is urged to veto 21 bills that would expand pension, disability, and death benefits for public employees without providing offsetting savings or improved services. These legislative measures would impose significant immediate and long-term costs on state and local governments outside of established budget and collective bargaining processes.
Recommendations related to Government Workers
The Governor should veto the 21 bills that would enhance pension or disability benefits for public employees without providing enhanced services or offsetting savings.
The state should reject these benefit expansions because they increase costs to New York State and local governments outside of budget negotiations and collective bargaining processes.
Policymakers should avoid granting targeted benefit enhancements, as doing so encourages further expansions and increases the number of benefit sweeteners passed by the Legislature.
Key Data
$64.1 million
— Total immediate cost of the 15 bills with fiscal notes attached.
$7.8 million
— Total annual cost of the 15 bills with fiscal notes attached.
$48.2 million
— First-year cost of S4523/A6457, which establishes a 20-year retirement plan for certain State law enforcement positions.
$1,270,000
— One-time past service cost of S6710/A7342, which expands performance of duty disability eligibility.
At this time last year, New York State estimated that tax receipts would fall short of pre-pandemic estimates by $15 billion annually on average, totaling $60 billion over four years. Receipts, however, have been much stronger than expected. By April 2021, the State reduced its four-year tax receipt shortfall estimate by 80 percent, to $11.8 billion. Over the four-year period, the State also will receive at least $21.1 billion of targeted and general federal fiscal…
The New York City Police Department's budget for fiscal year 2022 is set to increase by $465 million, reversing previous spending decreases despite ongoing efforts to transfer various units and personnel to other agencies. These shifts include the planned movement of 5,300 civilian school safety personnel to the Department of Education and the transfer of other specialized units, while overtime expenditures continue to exceed budget projections.
Key Data
$474 million
— FY 2021 overtime expenditures.
77 percent
— Overtime expenditures over budget.
5,300
— Civilian personnel anticipated to shift from the NYPD to the Department of Education.
$306 million
— Intra-city revenue shifting from the NYPD to the Department of Education for school safety.
$4.5 million
— Funding for the Homeless Unit transferred to the Department of Homeless Services.
$9.5 million
— Funding for the Crime Victim Assistance Program transferred to the Mayor’s Office of Criminal Justice.
The Fiscal Year 2022 budget temporarily reversed hiring freezes, resulting in an authorized headcount of 337,294, which is among the highest levels in city history. While this budget facilitates immediate hiring, it defers the difficult task of reducing staff by nearly 4,000 positions annually to the next administration for fiscal years 2023 through 2025.
Key Data
337,294
— The authorized headcount for fiscal year 2022, representing one of the highest levels in city history.
313,875
— The city's on-board headcount as of March 2021.
$283 million
— The average annual savings from attrition for fiscal years 2023 to 2025.
5,342
— The increase in authorized headcount for fiscal year 2022 compared to the April Executive Budget.
4,937
— The reduction in on-board headcount originally included in the Preliminary Budget due to a hiring freeze.
11,395
— The total increase in authorized positions across 44 city agencies from fiscal year 2021 to fiscal year 2022.
New York City is reversing its pandemic-era workforce reduction by planning to increase its headcount using federal funds, despite facing significant budget gaps. Instead of expanding the workforce, the city should focus on strategic hiring and restructuring operations to ensure efficient service delivery.
Recommendations related to Government Workers
The City should not increase the size of its workforce given the annual budget gaps.
The City should continue to reduce actual headcount, albeit more slowly, rather than reversing course to increase both actual and authorized headcount.
Federal aid and current vacancies should be used as an opportunity to hire strategically to reallocate City workers to where they are necessary.
The City should restructure operations to prioritize efficient service delivery that benefits all New Yorkers.
Key Data
$5 billion
— Annual budget gaps in fiscal years 2023 to 2025.
13,364 positions
— Total headcount reduction between April 2020 and February 2021.
6,850 positions
— Number of additional positions the City proposes to fill in the Fiscal Year 2022 Executive Budget.
$16 billion
— Infusion of federal funds the City plans to use to increase its authorized headcount.
326,739
— Peak actual on-board headcount in fiscal year 2019.
312,250
— Low actual on-board headcount in February 2021.
The Metropolitan Transportation Authority faces a long-term structural fiscal imbalance that requires significant operational reforms, including productivity improvements and changes to work rules and health benefits. Implementing these changes could yield up to $2.9 billion in annual savings and reduce the agency's workforce by nearly 13,000 positions by 2024.
Recommendations related to Government Workers
The MTA should improve subway facility maintenance productivity to the national median, which would allow for a headcount reduction of 6,185.
The MTA should increase bus vehicle operations and maintenance productivity to national peer benchmarks, requiring 1,793 fewer employees.
The MTA should align LIRR vehicle operations and maintenance practices with Metro-North Railroad, allowing for a headcount reduction of 1,114.
The MTA should expand One-Person Train Operation (OPTO) on subways, which would result in a headcount reduction of 1,582.
The MTA should implement commuter rail proof-of-payment, allowing for a headcount reduction of 699 for LIRR and 573 for MNR.
The MTA should increase active employee health insurance premium cost-sharing to the 18 percent level paid by non-represented employees, saving $130 million annually.
The MTA should apply the State’s current cost-sharing agreement for retired New York State employees to its own retired workforce, saving $263 million annually.
The MTA should implement a value-based health plan redesign, saving approximately $270 million by 2024.
Key Data
$2.9 billion
— Total annual savings from proposed operations reforms.
13,000
— Total workforce reduction by 2024.
$981 million
— Annual savings from subway facility maintenance improvement.
$367 million
— Annual savings from bus vehicle operations, facility and vehicle maintenance improvement.
$242 million
— Annual savings from LIRR vehicle operations and maintenance productivity alignment with MNR.
$512 million
— Annual savings from conductor operating reform.
New York City should reject early retirement incentives for civilian employees, as the city can effectively manage its workforce size through natural attrition and strategic hiring. By leveraging the roughly 20,000 annual departures and avoiding costly incentives, the city can reach a target workforce of 310,000 while maintaining fiscal stability.
Recommendations related to Government Workers
The city should flatly reject the opportunity to offer early retirement incentives to civilian employees.
The city should shrink its workforce by selectively refilling vacancies created by departed employees rather than offering retirement incentives.
The city should strategically hire to meet service needs and phase in organizational changes that improve quality and productivity to reach a target workforce size of around 310,000.
The city should utilize its fiscal glide path rather than engaging in a rehiring spree that would be fiscally destabilizing in the long run.
The city should manage services, finances, federal money, and the government workforce well to ensure it is in a better position to serve New Yorkers and weather future shocks.
Key Data
$110,000
— Average cost to the city for every person who takes the early retirement incentive.
20,000
— Number of people who leave city government employment each year.
312,250
— Total city workforce size as of February 2021.
$250 million
— Estimated cost the city would incur to achieve a 2,250 position reduction through early retirement.
$5 billion
— Amount of additional federal aid the city will receive, which guarantees no layoffs through June 2022.
The state faces significant budget gaps once federal aid is depleted, necessitating a focus on restructuring spending to ensure long-term sustainability. While recent revenue strength and federal funding allow for the restoration of previously planned spending reductions—including those related to state workforce salary freezes—these actions create future fiscal challenges.
Recommendations related to Government Workers
The State should use the next two years to restructure spending to be more sustainable to address the gaps that will exist and grow when the federal funds are depleted.
Key Data
$1.3 billion
— Estimated spending added in the current year by restoring Executive Budget savings proposals, which include a temporary freeze of state workforce salary increases.
$3.2 billion
— Estimated spending added in fiscal year 2022 by restoring Executive Budget savings proposals, which include a temporary freeze of state workforce salary increases.
$2.8 billion
— Average annual spending added over the following three years by restoring Executive Budget savings proposals, which include a temporary freeze of state workforce salary increases.
Managing the City’s fiscal crisis well will be a critically important duty of the next Mayor and a primary determinant of how the city survives the current crisis, and ultimately thrives in the future. Managing NYC’s Fiscal Crisis: A CBC Mayoral Candidate Forum featured a 10-minute conversation with each candidate,…
Early retirement incentives for municipal employees are a more costly workforce reduction strategy than attrition, potentially costing the city $110,000 per participant over five years. Relying on attrition rather than early retirement incentives could result in 32 percent higher net savings over five years, amounting to $4.3 billion compared to $3.3 billion.
Recommendations related to Government Workers
In light of the City’s fiscal stress and the availability of other options to balance the budget, the City should reduce its workforce through attrition and not pursue the ERI.
Key Data
$110,000
— Estimated cost per participant over five years for the proposed early retirement incentive.
19 percent
— Portion of the City's savings from not having to pay the separated employee’s salary and benefits that would be offset by the early retirement incentive cost.
$1.1 billion
— Potential cost of the early retirement incentive if 10,000 employees participate and the City follows its current practice of hiring one new employee for every three vacancies.
$3.3 billion
— Projected net savings over five years if 10,000 employees take the early retirement incentive and the City fills one-third of the vacancies.
$4.3 billion
— Projected net savings over five years if 10,000 employees leave through normal attrition and the City fills one-third of the vacancies.
32 percent
— Amount by which per-person savings through attrition would be greater than savings through an early retirement incentive.
The proposed New York City Public Housing Preservation Trust includes restrictive mandates that require the retention of current housing authority staff and prohibit the transfer of building operations to private contractors. These requirements limit the flexibility needed to improve management efficiency, retrain personnel, and implement cost-effective operational changes.
Recommendations related to Government Workers
The Trust legislation should be structured with enough flexibility so that the most cost-effective approaches and tools are available.
The legislation should not require NYCHA to retain staff in their current roles or prohibit the transfer of maintenance and operations of renovated buildings to contractors.
The Trust should avoid restrictions that make it difficult to retrain staff at newly overhauled properties or to modify work rules or job descriptions.
The COVID-19 pandemic significantly impacted New York City's public services, leading to reduced inspection activity, increased response times for emergency services, and shifts in waste collection productivity. While some areas saw increased demand for social services, the City's reliance on outdated performance metrics and lack of flexible work rules hindered its ability to effectively adapt to these rapid changes.
Recommendations related to Government Workers
The City should orient the structure of the Fire Department and its allocation of resources away from firefighting toward medical response to better address the high volume of medical emergencies.
The Department of Sanitation needs to implement more flexible routing and work rules to allow for the quick redeployment of resources in response to changing waste generation patterns.
The City must develop robust performance metrics to better foster an understanding of the effectiveness and efficiency of public services.
The City should prioritize the use of resident feedback surveys to collect high-quality data on key quality of life indicators.
The City needs to improve its reporting on the effectiveness and efficiency of services to address current gaps in data.
Key Data
9.5 percent
— DSNY uniformed employee sick leave rate in fiscal year 2020, compared to 6.7 percent in fiscal year 2019.
57 percent
— Increase in the number of DOC uniformed staff per inmate from 1.0 in fiscal year 2016 to 1.6 in fiscal year 2020.
53 percent
— Percentage of catch basins inspected by the Department of Environmental Protection in fiscal year 2020, down from 103 percent.
15,124
— Number of complaints about missed garbage collection received by the City in the first quarter of fiscal year 2021, a 44 percent increase over the first quarter of fiscal year 2020.
26 percent
— Decrease in the average number of individuals in custody, from 7,938 in fiscal year 2019 to 5,841 in fiscal year 2020.
New York City's fiscal year 2021 budget faces significant adjustments, with agency spending projected to decline by $1.5 billion across 28 agencies while increasing by $652 million at 48 others. Despite these reductions, the city-funded workforce is expected to grow by 1,104 positions, necessitating further savings to address a projected $4.2 billion budget gap in fiscal year 2022.
Recommendations related to Government Workers
The City should implement additional savings programs in fiscal year 2021 to mitigate budgetary risks such as further cuts in State aid and declines in tax revenue.
The City must identify specific savings to close the $4.2 billion gap projected for fiscal year 2022.
Future budget cuts should aim to secure recurring savings to ensure long-term fiscal stability.
Future budget cuts should aim to provide critical services to those most in need.
Key Data
1,104
— The number of additional positions expected in the City-funded workforce in fiscal year 2021.
1,252
— The number of full-time and full-time equivalent positions reduced at the NYPD.
1,975
— The number of positions reduced at the Department of Correction due to the closure of jail facilities.
$4.2 billion
— The projected budget gap for fiscal year 2022 that requires additional savings.
New York City faces a significant fiscal crisis that necessitates finding $1 billion in recurring labor savings to avoid widespread layoffs of municipal employees. To achieve this, the city should pursue structural reforms to employee benefits, such as health insurance premium sharing and welfare fund consolidation, alongside modifications to work rules and productivity differentials.
Recommendations related to Government Workers
The City should implement premium-sharing for employee and retiree health insurance to generate significant savings.
The City should work with the MLC to consolidate welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
The City should seek State legislation to eliminate the VSFs and have the assets transferred to the main pension funds.
The guaranteed return on the fixed return fund should be sharply reduced through State legislation.
The City could make four firefighters the standard staffing for engine companies.
The City should be given the flexibility to shift at least half of the ALS ambulances to a one paramedic, one EMT staffing model.
The City could reduce overtime for skilled trades and uniformed employees through the implementation of overtime caps.
Key Data
$1 billion
— The Adopted Budget for Fiscal Year 2021 calls for $1 billion in recurring savings from negotiations with labor unions.
$1.1 billion
— Uniformed overtime was $1.1 billion in fiscal year 2019.
$1.2 billion
— CBC estimates the value of the taxpayer-provided TDA guarantee is approximately $1.2 billion annually.
$50.2 billion
— In fiscal year 2021 personnel costs are projected to be $50.2 billion of the $93.5 billion budget.
$136 million
— In fiscal year 2018 the City spent $136 million on the Absent Teacher Reserve.
$100 million
— Employees in skilled trades earned about $100 million in overtime.
New York City faces a significant fiscal crisis that necessitates $1 billion in recurring labor savings to avoid widespread layoffs of municipal employees. To achieve this, the city should pursue structural reforms such as implementing employee health insurance premium sharing, consolidating welfare funds, and modernizing work rules and productivity differentials.
Recommendations related to Government Workers
The City should work with the MLC to consolidate welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
The City should seek State legislation to eliminate the VSFs and have the assets transferred to the main pension funds.
The City should be given the flexibility to shift at least half of the ALS ambulances to a one paramedic, one EMT staffing model.
The guaranteed return on the fixed return fund should be sharply reduced through State legislation.
The City could make four firefighters the standard staffing for engine companies.
The City could reduce overtime for skilled trades and uniformed employees through the implementation of overtime caps.
Health insurance should be a key focal point in negotiations between the Administration and the MLC.
Key Data
$1 billion
— The recurring savings target from negotiations with labor unions.
$50.2 billion
— Projected personnel costs in the fiscal year 2021 budget.
$1.1 billion
— Uniformed-agency overtime in fiscal year 2019.
$1.2 billion
— Estimated annual value of the taxpayer-provided TDA guarantee.
$100 million
— Overtime earned by employees in skilled trades in fiscal year 2019.
$1.8 billion
— Projected labor savings in fiscal year 2024.
Watch the original segment here . Budget watchdogs say labor and City Hall should target health care costs first. "The city pays the full premium for employees, retirees and their families. It's a deal that no other New Yorker in the private sector has," said Maria Doulis, vice-president at the…
70 million is the number of free meals distributed by the NYC since mid-March, when the COVID-19 pandemic took hold. Today we talk to members of the public and private sector teams that made this success happen: Sanitation Commissioner and "Food Czar" Kathryn Garcia, and Cas Holloway of Unqork, the…
New York City faces significant budget gaps that require difficult decisions, including reducing the city workforce through attrition and implementing health insurance premium-sharing for employees and retirees. These measures, alongside productivity improvements and targeted headcount reductions in civilian and uniformed roles, aim to balance the budget while maintaining essential services.
Recommendations related to Government Workers
The City should modestly shrink the workforce through attrition to help balance the budget.
City leaders should collaborate with labor to improve productivity and modify benefits to achieve necessary savings.
The City should require some fringe benefit cost-sharing with employees and retirees to generate significant recurring savings.
The City should implement civilian headcount reductions of 7,326 over the course of fiscal year 2021 through 2022.
The number of uniformed police officers could be reduced to prior peak headcount by 1,174 over two years through attrition.
The City should pursue a reduction of 500 DOE civilian positions by fiscal year 2022 to save about $60 million annually.
Implementing a health insurance premium-sharing arrangement would provide significant recurring savings while ensuring the City continues to provide attractive benefits.
Key Data
9,000
— Number of positions the City could reduce through attrition while remaining above the fiscal year 2008 peak.
7,326
— Number of civilian headcount reductions targeted over the course of fiscal year 2021 through 2022.
$364 million
— Savings achieved in fiscal year 2021 from civilian headcount reductions.
1,174
— Number of uniformed police officers that could be reduced over two years through attrition.
$350 million
— Annual savings from retiree health benefit premium sharing when fully implemented.
$700 million
— Annual savings from active employee health benefit premium sharing when fully implemented.
New York City municipal employment reached an all-time high of 326,739 at the end of fiscal year 2019, an 11.3 percent increase from the fiscal year 2012 low. To address looming fiscal gaps, the city must implement an assertive strategy to reduce the size of the public workforce while minimizing service impacts.
Recommendations related to Government Workers
The Administration should act now to shrink the workforce with the least impact on services.
The Adopted Budget should show the decline in headcount that will be needed to manage the next few fiscal years.
Key Data
326,739
— The number of municipal employees at the end of fiscal year 2019, representing an all-time high.
11.3 percent
— The increase in municipal employment from the fiscal year 2012 trough to the end of fiscal year 2019.
$5 billion
— The projected outyear budget gap for fiscal year 2022.
15,721
— The number of positions in fiscal year 2019 that exceeded the prior peak in fiscal year 2008.
336,120
— The projected authorized headcount for fiscal year 2024.
5.6 percent
— The reduction in full-time and full-time equivalent personnel from fiscal year 2008 to fiscal year 2012.
New York City's budget grew by $19 billion between fiscal years 2014 and 2019, driven by policy choices like collective bargaining agreements and an 11 percent expansion of the municipal workforce. Managing factors such as rising contract costs, overtime, and headcount growth is essential to restraining spending ahead of potential economic downturns.
Recommendations related to Government Workers
The City should prioritize spending restraint in the upcoming budget season to set aside resources for economic downturns.
The City should manage the rising cost of contracts to reduce the need for drastic actions during economic downturns.
The City should manage overtime spending to reduce the need for drastic actions during economic downturns.
The City should manage headcount growth to reduce the need for drastic actions during economic downturns.
Key Data
11 percent
— Expansion of the full-time municipal workforce from 271,767 to 300,442 between fiscal years 2014 and 2019.
$4.8 billion
— Increase in full-time salaries and wages from $18.0 billion in fiscal year 2014 to $22.9 billion in fiscal year 2019.
$1.8 billion
— Total overtime spending in fiscal year 2019, which grew at an average rate of 4.4 percent from $1.4 billion in fiscal year 2014.
$10.0 billion
— Pension contributions in fiscal year 2019, which grew from $8.3 billion in fiscal year 2014.
61 percent
— Portion of the $4.8 billion increase in full-time salaries and wages that stems from higher salaries for existing employees.
The state legislature has passed 18 bills that would expand pension and disability benefits for public employees, carrying a projected first-year cost of at least $71 million. These measures threaten to undermine previous fiscal reforms and should be vetoed to prevent unnecessary increases in personnel costs.
Recommendations related to Government Workers
The Governor should veto all 18 bills passed by the Legislature to enhance pension or disability benefits for public employees.
The Governor should veto A7620-A/S5903-A, which would cost $5.6 million annually to allow New York City police officers to receive retirement credit for time spent as cadets.
The state should maintain hard-fought compromises like Tier 6 pension benefits and progressive health insurance contributions rather than granting targeted benefit enhancements.
Key Data
$71 million
— Projected first-year cost of the 18 bills passed by the Legislature to enhance pension or disability benefits.
$41 million
— First-year cost of A4431/S5207, which would establish a 20-year retirement plan for certain state law enforcement positions.
$15.7 million
— First-year cost of A7874-A/S5905-A, which would require New York City paraprofessionals to join the Teachers Retirement System.
$5.6 million
— Annual cost of A7620-A/S5903-A, which would allow New York City police officers to receive retirement credit for time spent as cadets.
$2.1 million
— First-year cost of A5324/S5133, which would grant enhanced disability benefits to ambulance medical technicians in Nassau County.
$1.5 million
— First-year cost of A5021/S3946, which would expand performance of duty disability benefits for Nassau County sheriffs and correction officers.
In fiscal year 2019, New York City employed nearly 306,000 full-time workers with an average total pay of $85,636. Compensation varied significantly by category, with uniformed employees averaging $106,000 annually, while civilian and pedagogical staff averaged $73,106 and $86,002, respectively.
Key Data
306,000
— Active full-time employees on New York City’s payroll in fiscal year 2019.
$85,636
— Average total pay for active full-time employees on New York City’s payroll in fiscal year 2019.
$106,000
— Average annual pay for uniformed employees.
$73,106
— Average annual pay for civilian employees.
$86,002
— Average annual pay for pedagogical employees.
CBC Vice President Maria Doulis says MTA managers, riders, and drivers will all be making sacrifices through job cuts, fare hikes, and congestion pricing, so it’s only fair labor contributes as well: “The MTA’s demands reflect the fact that more needs to be done with the workforce in order to…
New York State is considering 19 separate bills that would expand pension and disability benefits for various public employees, collectively imposing significant new costs on taxpayers. These legislative proposals, which include enhanced disability payouts and shortened retirement timelines, should be vetoed to avoid adding to the state's long-term financial obligations.
Recommendations related to Government Workers
Governor Cuomo should veto the 19 benefit sweetener bills to prevent unnecessary increases in public employee pension and disability costs.
The state should reject legislation that enhances accidental and performance of duty disability pensions for law enforcement and fire department personnel.
Policymakers should oppose bills that establish 20-year retirement plans for law enforcement, as these create significant immediate past service costs.
The Governor should veto measures that increase the maximum earnings limit for retirees in public service positions.
The state should decline to allow retirement credit for New York City Police Department Cadet Program time, which would increase annual costs by $5.6 million.
Key Data
$41.100 Million
— The cost of establishing a 20-year retirement plan for law enforcement members and officers in the DEC, regional state park police, and university police.
$15.700 Million
— The cost associated with requiring New York City paraprofessionals to join the Teachers' Retirement System.
$5.600 Million
— The annual cost increase resulting from allowing retirement credit for New York City Police Department Cadet Program time.
$2.760 Million
— The cost of allowing Tier 6 uniformed court officers and peace officers to retire without early age reduction upon attaining 30 years of service.
$2.090 Million
— The cost of granting Nassau County ambulance medical technician supervisors and technicians an enhanced disability benefit.
$1.520 Million
— The cost of allowing Nassau County sheriffs and correction officers to receive performance of duty benefits for injuries sustained from civilian acts.
The 2019 Benefit Sweetener Scorecard tracks 189 legislative bills proposing expanded benefits for New York public employees, including enhanced death, disability, pension, and leave provisions. These proposed measures carry significant fiscal implications, with some individual bills projected to cost hundreds of millions of dollars in additional state and local expenditures.
Key Data
$942.6 Million
— Estimated cost increase for the teachers retirement system, state and local police and fire system, and New York City retirement systems.
$121.7 Million
— Additional annual cost for increasing the salary used in the computation of the special accidental death benefit.
$59.3 Million
— Annual increase and immediate past service cost for calculating the final average salary for elected or appointed judges.
$41.1 Million
— Cost for establishing a 20-year retirement plan for members or officers of law enforcement, including DEC and university police.
The New York State Legislature introduced 189 bills in 2019 that would expand benefits for public employees, including pension enhancements, health insurance coverage, and paid leave. These proposed "benefit sweeteners" carry significant fiscal implications, with some individual bills projected to cost hundreds of millions of dollars.
Key Data
$942.6 Million
— The estimated cost of increasing the base retirement allowance for New York State Teachers, State and local police and fire, and New York City retirement systems.
$149 Million
— The immediate past service cost associated with increasing Tier 6 pension benefits.
$121.7 Million
— The additional annual cost of increasing the salary used in the computation of the special accidental death benefit.
$59.3 Million
— The annual increase and immediate past service cost for calculating the final average salary for judges in the NYS Unified Court System.
$41.1 Million
— The cost of establishing a 20-year retirement plan for members or officers of law enforcement, including regional state park police and university police officers.
$13.1 Million
— The one-time past service cost for modifying the in-service death benefit for Tiers 2 through 6 State correction officers.
The 2019 Benefit Sweetener Scorecard tracks 189 legislative bills introduced in New York that would expand benefits for public employees, including pension enhancements, disability coverage, and paid leave. These proposed measures carry significant long-term fiscal implications for the state and local governments, with many bills lacking clear fiscal notes despite their potential to increase taxpayer-funded liabilities.
Key Data
$121.7 million
— The additional annual cost of increasing the salary used in the computation of the special accidental death benefit by 3% for cases where the date of death was before 2019.
$1.5 million
— The increase in Nassau County annual contributions and past service cost for allowing certain sheriff and correction officers to receive performance of duty benefits.
$13.1 million
— The one-time past service cost associated with modifying the in-service death benefit for Tiers 2 through 6 State correction officers.
$942.6 million
— The total increase in costs for the teachers, state and local police and fire, and New York City retirement systems resulting from increasing the base retirement allowance computation.
$59.3 million
— The annual increase and immediate past service cost for calculating the final average salary for elected or appointed judges and justices in the New York State Unified Court System.
$149 million
— The annual cost increase and immediate past service cost for raising Tier 6 pension benefits from 35% to 40% plus 2% for each year of service in excess of 20 years.
The Metropolitan Transportation Authority faces a dire fiscal outlook with projected annual cash deficits reaching $976 million by 2022, necessitating a focus on controlling labor costs through collective bargaining. To achieve a viable fiscal future, new labor agreements should prioritize self-funded raises by incorporating productivity improvements and increased employee contributions to fringe benefits.
Recommendations related to Government Workers
Any pay increases should be conditioned on generating offsetting savings.
MTA management and labor should set productivity goals and collaboratively develop an agenda of collective bargaining changes that would allow both sides to achieve these goals.
Increasing employee health care contributions of represented workers to levels similar to the nonrepresented workforce would defray a significant share of the authority’s $1.4 billion health and welfare expense.
New collective bargaining agreements could reduce “penalty payments” made to bus operators scheduled to work across both morning and evening peak periods and eliminate allowances for time not worked.
New agreements also could eliminate the restrictions on hiring more part-time bus operators and the restrictions on express bus scheduling that would allow the authority to orient service toward peak periods.
Key Data
$976 million
— Projected annual cash deficit for the MTA in 2022.
$2.3 billion
— Cumulative cash shortfall projected for the MTA in 2022.
$84,955
— Median annual earnings for MTA workers in 2017.
$496 million
— Potential annual savings from increasing subway maintenance productivity to the median for selected U.S. systems.
$444 million
— Estimated annual savings if the MTA’s total bus productivity matched the median.
$86 million
— Potential savings if the Long Island Rail Road could match the total productivity of Metro-North.
The Governor vetoed a series of legislative bills that would have expanded retirement and disability benefits for various public sector employees, including police, correction officers, and court staff. These measures would have imposed significant additional costs on state and local governments, necessitating the rejection of such costly benefit expansions.
Recommendations related to Government Workers
Governor Cuomo should veto costly employee and retiree benefits to maintain fiscal responsibility.
Key Data
$13.20 Million
— One-time past service cost for enhancing in-service death benefits for state correction officers.
$2.42 Million
— Increased annual contributions and immediate past service cost for accidental disability retirement for law enforcement and forest rangers.
$4.70 Million
— Annual cost increase for removing the limit on overtime pay inclusion for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— Annual costs and one-time retroactive cost for allowing uniformed court officers to retire without early age reduction.
New York City's emergency medical services are currently inefficient, with excessive reliance on expensive fire engine responses for non-critical incidents and a need for better resource allocation. By reducing unnecessary ambulance requests and optimizing staffing models, the city could improve response times for life-threatening emergencies while generating significant cost savings.
Recommendations related to Government Workers
Build on the experience of other cities to develop programs to reduce residents’ unnecessary or inappropriate requests for an ambulance.
Increase the number of and more efficiently staff the ambulances which are best able to respond to the life threatening incidents (known as Advanced Life Support or ALS ambulances) so they can arrive at relevant incidents more promptly.
Dramatically reduce the role of fire engines in responding to medical incidents; they should be dispatched to these incidents only when it is likely the engine will arrive before an ambulance and the fire engine’s staff’s presence will result in quicker, appropriate medical treatment.
Reversing REMSCO’s policy that New York City ALS ambulances must have two paramedics would allow the City to assign one paramedic and one EMT, as is the practice in the rest of the state.
The City should conduct a thorough assessment of the location, coverage, and workload of fire companies to identify where companies could safely close without jeopardizing response times to any type of emergency.
Key Data
$1.1 billion
— Annual spending by the City of New York to provide emergency medical services.
$58.5 million
— Estimated annual savings from a 10 percent reduction in unnecessary or inappropriate ambulance requests.
$7.2 million
— Annual cost to staff one fire engine.
$1,970
— Estimated average cost of a fire engine response to a medical incident in 2017.
$486
— Average cost of an ambulance run in 2017.
$335
— Unit cost of an ambulance run in 2017 after factoring in reimbursements.
In fiscal year 2018, New York City employed roughly 297,000 full-time workers with an average total pay of $80,978. Compensation varies significantly by role, with uniformed employees earning an average of $107,000 annually, compared to $70,726 for civilian staff and $76,114 for pedagogical employees.
Key Data
297,000
— active full-time employees on New York City’s payroll in fiscal year 2018
$80,978
— average total pay for active full-time employees on New York City’s payroll in fiscal year 2018
$107,000
— average annual pay for uniformed employees
$70,726
— average annual pay for civilian employees
$76,114
— average annual pay for pedagogical employees
The Metropolitan Transportation Authority plans to hire hundreds of new employees to implement various action plans, including initiatives for the subway, bus, and commuter rail systems. However, the agency faces significant financial risks, including potential budget deficits and the challenge of negotiating new labor contracts at assumed wage levels.
Key Data
500
— Number of additional workers the MTA intends to hire for the Subway Action Plan.
100
— Number of additional workers related to the Long Island Rail Road Forward Initiative.
40
— Number of additional workers the MTA intends to hire for the Bus Action Plan.
7.42% is the compounded salary and wage increases for members of DC37, the City’s largest municipal union for civilian workers, under a new contract that sets the pattern for negotiations with other labor unions. NYC Labor Commissioner Bob Linn joins the podcast to discuss this deal, the dynamics of negotiating…
Uniformed overtime spending at the Fire Department and Department of Correction continues to exceed budget caps despite increased staffing levels, largely driven by high rates of absenteeism and existing work rules. Addressing these costs requires negotiating changes to labor contracts and sick leave policies rather than simply hiring more personnel.
Recommendations related to Government Workers
Work rule changes will need to be negotiated in the next round of labor contracts to address the root causes of excessive overtime.
The high rate of absenteeism should be tackled with a comprehensive strategy and changes to the sick leave policy, which currently grants unlimited sick time to uniformed employees.
Labor and management must come to the table to develop better strategies to control uniformed overtime costs.
The city should recognize that the answer to controlling overtime is not simply hiring more uniformed employees.
Key Data
$1.2 billion
— Total overtime earned by uniformed employees in fiscal year 2016.
$19,400
— Average overtime earned per uniformed employee in fiscal year 2016.
53 percent
— Portion of the uniformed workforce earning overtime pay in excess of 20 percent of base salary in fiscal year 2016.
$228 million
— Fiscal year 2018 uniformed overtime cap for the Fire Department.
$165 million
— Fiscal year 2018 uniformed overtime cap for the Department of Correction.
The New York City Housing Authority faces a $32 billion capital funding gap over the next five years, with 90 percent of its housing units at risk of deterioration by 2027. To address these needs and improve operational efficiency, the authority must modernize its collective bargaining agreements, decentralize property management, and increase the use of private maintenance contracts.
Recommendations related to Government Workers
NYCHA should modernize its collective bargaining agreements and staffing structures to improve operations and lower costs.
NYCHA should decentralize property management to improve the management and investment in its buildings.
NYCHA should increase the use of private maintenance contracts to improve the management and investment in its buildings.
Key Data
39%
— The amount by which NYCHA’s costs of operations are higher than those of other landlords operating rent-stabilized buildings.
In late 2018, the Governor vetoed a series of legislative bills that would have expanded benefits, retirement options, and disability compensation for various public sector employees, including police, correction officers, and court staff. These vetoed measures collectively represented millions of dollars in potential past service and first-year costs to the state and local governments.
Key Data
$13.20 Million
— One-time past service cost for enhancing the in-service death benefit for state correction officers.
$2.42 Million
— Increased annual contributions and past service costs for accidental disability retirement for law enforcement and forest rangers.
$4.70 Million
— Annual cost increase associated with removing the overtime pay limit for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— Annual and one-time retroactive costs for allowing Tier 6 uniformed court or peace officers to retire without early age reduction after 30 years of service.
In 2018, New York State vetoed a series of legislative bills that would have expanded retirement and disability benefits for various public sector employees, including police, correction officers, and court staff. These proposed benefit sweeteners would have collectively imposed significant fiscal costs on the state and local governments, ranging from hundreds of thousands to millions of dollars per measure.
Key Data
$13.20 Million
— One-time past service cost associated with enhancing the in-service death benefit for state correction officers.
$2.42 Million
— Increased annual contributions and past service costs for accidental disability retirement for law enforcement and forest rangers.
$4.70 Million
— Cost associated with removing the limit on overtime pay for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— Annual and one-time retroactive costs for allowing uniformed court or peace officers to retire without early age reduction.
New York State vetoed a series of legislative bills that would have expanded retirement and disability benefits for various public employees, including correction officers, police, and court staff. These proposed enhancements would have incurred significant taxpayer costs, ranging from hundreds of thousands to over $13 million per measure.
Key Data
$13.2 Million
— The one-time past service cost associated with enhancing the in-service death benefit for state correction officers.
$2.42 Million
— The combined annual contributions and past service cost for providing accidental disability retirement to law enforcement in the department of environmental conservation, forest rangers, and university police.
$4.70 Million
— The estimated cost of removing the limit on overtime pay for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— The annual and one-time retroactive costs associated with allowing uniformed court officers and peace officers to retire without early age reduction.
Legislative bills vetoed in 2018 would have expanded pension, disability, and retirement benefits for public employees such as police, correction officers, and court staff. These proposed enhancements would have resulted in significant fiscal impacts, including millions of dollars in one-time past service costs and ongoing annual taxpayer-funded contributions.
Key Data
$13.2 Million
— One-time past service cost for enhancing the in-service death benefit for State correction officers.
$2.42 Million
— Increased annual contributions and immediate past service cost for accidental disability retirement for law enforcement and forest rangers.
$4.70 Million
— Annual costs associated with removing the limit on overtime pay for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— Annual costs and one-time retroactive cost for allowing uniformed court officers to retire without early age reduction.
New York City taxpayers contribute over $1 billion annually to union-administered benefit funds, which often suffer from excessive administrative costs, unnecessary reserves, and mismanagement. Consolidating these benefits and strengthening oversight could save the city more than $160 million while improving the quality of benefits for employees.
Recommendations related to Government Workers
The Office of the Comptroller should give higher priority to auditing benefit funds to ensure better oversight of city spending.
The City should establish corresponding benchmarks and indicators for Directive #12 that can trigger enforcement powers.
The Office of Labor Relations should expand the Comptroller’s oversight and enforcement authority over union-administered benefit funds through negotiations with labor unions.
The City should consolidate the provision of supplementary health benefits, such as prescription drug, dental, and optical coverage, within the City’s health insurance program.
The City should provide non-health related benefits through a centralized cafeteria plan to allow for more efficient, consolidated delivery of diverse benefits.
Key Data
$1.1 billion
— Projected taxpayer contribution to 108 union-administered benefit funds in fiscal year 2018.
$160 million
— Potential annual savings for the City from restructuring supplemental benefit delivery.
$109.3 million
— Total administrative expenses for 91 benefit funds in fiscal year 2014.
8.9%
— Share of all benefit fund expenditures spent on administrative costs in fiscal year 2014.
The Authorities Budget Office requires increased funding to expand its current staff of 11 employees, which is only 40 percent of the level envisioned when the office was reestablished in 2010. This additional investment would allow the agency to hire necessary legal, investigatory, and analytical personnel to effectively oversee state and local authorities.
Recommendations related to Government Workers
The state should provide a substantial increase in funding of the Authorities Budget Office to $3.105 million so it may adequately fulfill its statutory duties.
The state should increase funding to the Authorities Budget Office to address the current staffing level of just 40 percent of the level envisioned when it was reestablished in 2010.
Key Data
11
— The number of full-time employees currently staffing the Authorities Budget Office.
40 percent
— The current staffing level of the Authorities Budget Office compared to the level envisioned when it was reestablished in 2010.
$3.105 million
— The recommended annual funding allocation for the Authorities Budget Office.
$1.169 million
— The amount of additional funding requested above the Executive Budget.
578
— The number of state and local authorities the Authorities Budget Office is charged with overseeing.
$51 billion
— The amount of money collectively spent annually by the authorities overseen by the Authorities Budget Office.
10 years is the amount of time the de Blasio administration says it will take to shut down Rikers Island. Special guest Michael Jacobson is the executive director of the CUNY Institute for State and Local Governance. He was once the City's Correction Commissioner as well as the Probation Commissioner.…
This episode's datapoint is $95 billion, the current value of all of the future retiree benefits, except pensions, already earned by current retirees and employees of NYC. This amount, referred to as OPEB, or 'Other Post-Employment Benefits,' is primarily the cost of health insurance for NYC employees, their spouses and…
New York City faces a $95 billion unfunded liability for retiree health benefits, a burden that equates to approximately $30,000 per household and is projected to grow significantly without policy changes. To address this fiscal challenge, the city should reduce the cost of its benefit package to align with other municipalities and implement more systematic, long-term prefunding strategies.
Recommendations related to Government Workers
Require workers who retire before Medicare eligibility to pay 50 percent of their health insurance premium, which would reduce the normal cost by approximately $831 million annually.
No longer reimburse for Medicare Part B premiums, a reform that would eliminate about $482 million in annual normal costs and lower current annual outlays by at least $245 million.
Increase the retirement age for police and firefighters to match teachers’ retirement age of 55, which would reduce the pre-Medicare actuarial accrued liability and lower both normal cost and PAYGO expenses.
Lower the Medicare Part B reimbursement from full reimbursement to 50 percent, a more incremental change that would require most retirees to pay about $61 monthly.
End benefits for spouses of retirees, a reform that would reduce the normal cost approximately $1.78 billion annually and $328 million in current outlays.
Reduce to 50 percent the premium payments for Medicare supplemental insurance, which would reduce the normal cost by approximately $358 million annually.
Replace the full premium payments on behalf of retirees and spouses with a voucher to be used for purchase of insurance, which is estimated to save about $1.2 billion in normal cost if applied to current workers.
Provide a fixed payment to municipal employee unions and authorize them to provide retiree health benefits, allowing unions to find savings from labor initiatives rather than renegotiations with the City.
Key Data
$95 billion
— Total OPEB debt owed by New York City.
$30,000
— Current debt per household in New York City.
$4.9 billion
— Annual normal cost for OPEB benefits in fiscal year 2017.
$2.5 billion
— Annual PAYGO amount for OPEB benefits in fiscal year 2017.
$150,000
— Average OPEB liability per member (employees and retirees).
$241,293
— Average OPEB liability per police member.
The state should veto numerous legislative bills that would expand retirement, disability, and death benefits for various government employees, as these measures threaten fiscal restraint. These proposed benefit enhancements, which include costly past service and annual obligations, would erode the savings achieved through the implementation of Tier 6 pension reforms.
Recommendations related to Government Workers
The Governor should veto A711B/S1411B, which provides an expensive enhancement to volunteer firefighter benefits.
The Governor should veto the 15 other bills passed by the legislature that provide expensive enhancements to government employee and retiree benefits.
The state should reject proposed benefit expansions that enrich retirement benefits, increase disability benefits, and provide other enhancements without fiscal notes.
Key Data
$13.7 million
— Past service costs for A5133a/S4077, which enhances death benefits for state correction officers.
$8.9 million
— Immediate past-service cost for A7185A/S5484A, which provides a special accidental death benefit for uniformed New York City sanitation employees.
$6.8 million
— Annual cost to New York City for A7185A/S5484A, which provides a special accidental death benefit for uniformed sanitation employees.
$1.15 million
— Past-service costs for A7134/S5130, which increases disability payments for Nassau County sheriffs and correction officers.
$394,000
— Past service costs for A3332/S3670, which allows Tier 6 uniformed court officers to retire early.
$50,000
— Lump-sum payment amount included in the enhanced cancer benefits for volunteer firefighters under A711B/S1411B.
New York City's uniformed agencies face a significant fiscal challenge as overtime spending has grown by 62 percent between fiscal years 2009 and 2016, reaching $1.7 billion. To address this, the city should implement structural reforms, including capping sick leave, revising work rules, and establishing a labor-management committee to negotiate overtime reductions.
Recommendations related to Government Workers
The City should establish a uniformed labor-management committee as part of the next round of collective bargaining in order to reduce uniformed overtime spending.
The City should adopt a system in which routine sick leave usage is accrued and capped, similar to the system for civilian employees.
The City should change certain work rules, such as eliminating overtime for travel to alternate work locations and guaranteed minimum overtime hours.
The City should institute a per employee cap on overtime hours or overtime earnings, as exists for civilian employees.
The City should consider capping or eliminating overtime earnings in calculating final average salary for pensions.
Key Data
$1.7 billion
— Total overtime spending in fiscal year 2016.
$19,400
— Average overtime compensation paid to uniformed employees in fiscal year 2016.
62 percent
— Growth in overtime spending from fiscal years 2009 to 2016.
42 percent
— Average amount overtime exceeded the adopted budget in each of the past nine years.
53 percent
— Portion of uniformed employees who received overtime that exceeded 20 percent of their base pay in fiscal year 2016.
$1.2 billion
— Annual uniformed overtime costs for fiscal years 2015 and 2016.
New York City's workforce is projected to grow by over 31,000 employees between fiscal years 2014 and 2018. While the average city worker earned $76,064 in fiscal year 2016, total compensation per employee, including fringe benefits, exceeds $140,000.
Key Data
31,000
— Projected increase in city headcount from FY 2014 to FY 2018.
$76,064
— Average pay for a city worker in FY 2016.
$140,000
— Average compensation per employee in 2017 when including fringe benefit costs.
In fiscal year 2016, New York City employed approximately 283,000 full-time workers with an average total pay of $76,064. Uniformed employees earned the highest average annual pay at $109,000, significantly bolstered by overtime payments, compared to $66,500 for civilian employees and $70,000 for pedagogical staff.
Key Data
283,000
— active full-time employees on New York City’s payroll in fiscal year 2016
$76,064
— average total pay for full-time employees in fiscal year 2016
$109,000
— average annual pay for uniformed employees
$66,500
— average annual pay for civilian employees
$70,000
— average annual pay for pedagogical employees
$10,000
— average annual overtime for civilians in several agencies including the Departments of Transportation, Correction, Citywide Administrative Services, and Fire
Between fiscal years 2012 and 2017, New York State negotiated various wage increases and lump sum payments for public employee unions under Governor Cuomo. These agreements included specific dollar-amount payments in early years followed by percentage-based wage increases for most bargaining units by 2015 and 2016.
Key Data
$2,625
— The 2012 wage increase negotiated for PBANYS and NYSPBA.
$2,075
— The 2012 wage increase negotiated for NYSCOPBA.
$775
— The 2014 lump sum payment negotiated for CSEA, PBANYS, C-82, and NYSCOPBA.
$225
— The 2015 lump sum payment negotiated for CSEA, PBANYS, C-82, and NYSCOPBA.
2%
— The standard wage increase negotiated for most unions in 2015 and 2016.
1.50%
— The 2017 wage increase negotiated for NYSPIA and NYSPBA.
New York City teachers have access to a tax-deferred compensation plan that guarantees a 7 percent investment return, a feature that costs taxpayers $1.2 billion annually. This arrangement creates a significant financial burden and poses risks to the teachers' pension system, necessitating reforms to align the plan with standard municipal employee benefits.
Recommendations related to Government Workers
The most direct way to make the change would be to eliminate the TDA and transfer its assets and participants to OLR’s plan.
A more gradual change would be to require only newly hired teachers to use the OLR plan, while reforming the TDA plan serving current teachers and retirees.
The fixed income option should be converted to choices comparable to those offered in the OLR plan, such as a government bond fund and a corporate bond fund with returns based on prevailing interest rates.
Key Data
$1.2 billion
— Excess interest payments at taxpayer expense in fiscal year 2015.
36 percent
— Taxpayer subsidy as a percentage of the total taxpayer contribution to the TRS QPP in 2015.
$18.7 billion
— Amount of money in the fixed fund in 2015.
7.0 percent
— Current guaranteed interest rate on the TDA fixed fund option.
New York State is urged to veto ten legislative bills that would expand government employee and retiree benefits, as these measures threaten fiscal restraint and erode savings from recent pension tier reforms. These proposed enhancements include costly changes to early retirement plans and disability benefits that would shift significant financial burdens onto state and local taxpayers.
Recommendations related to Government Workers
The Governor should veto the 10 bills passed by the legislature that provide expensive enhancements to government employee and retiree benefits.
The state should maintain fiscal restraint by rejecting legislation that enriches early retirement plans for government employees.
The state should reject expansions to disability benefits for public sector employees to avoid eroding savings from the implementation of Tier 6.
The state should avoid eliminating required employee contributions in the New York State Retirement System and the Local Police and Fire Retirement System.
The state should refrain from allowing counties to offer enriched pension plans to correction officers and deputy sheriffs that increase costs by as much as 7 percent of salaries.
Key Data
6.6 percent
— The portion of salaries shifted from employees to state and local taxpayers for early retirement plans under A9702/S7023.
7 percent
— The potential cost increase to counties for enriched pension benefits for correction officers and deputy sheriffs.
$100,000
— The first-year cost of allowing State Court peace officers to retire after 30 years of service at age 55.
$600
— The increased weekly payment for total disability benefits for volunteer firefighters and ambulance drivers.
$244,000
— The cost for the individual known to be impacted by extending the deadline to file for accidental disability retirement benefits for firefighters.
$25,000
— The annual cost of eliminating restrictions on transferring between New York City public retirement systems.
New York State is considering ten legislative bills that would provide expensive benefit enhancements to public sector workers and retirees, including increased disability payments and more generous retirement plans. These proposed changes would increase costs for taxpayers without providing any corresponding improvements in public services.
Recommendations related to Government Workers
The Governor should veto the bill creating a new disability benefit for state police officers that provides full salary and wages to members who are sick or injured in the performance of duties.
The Governor should veto the bill allowing counties to offer correction officers and deputy sheriffs a special 20-year retirement plan that provides a benefit of one-half of the final average salary.
The Governor should veto the bill allowing uniformed court or peace officers to retire without early age pension reduction upon attaining 30 years of creditable service at age 55.
The Governor should veto the bill allowing employers in the NYS and Local Police and Fire Retirement System to offer the 20-year retirement plan without requiring employee contributions.
The Governor should veto the bill increasing disability payments for New York City firefighters, which is estimated to cost $6.1 million in 2017 and $12.6 million annually by 2021.
Key Data
$6.1 million
— Cost of the bill increasing disability payments for New York City firefighters in 2017.
$12.6 million
— Annual cost of the bill increasing disability payments for New York City firefighters by 2021.
75 percent
— Current disability benefit limit for state police and correction officers.
30 years
— Creditable service required for court or peace officers to retire without early age pension reduction.
5 years
— Proposed filing deadline for firefighters outside New York City to file an application for disability benefits due to certain cancers.
Proposed legislation in New York aims to expand benefits for public employees and retirees, including disability payments, pension enhancements, and early retirement plans, which could impose significant costs on state and local governments. These measures threaten to reverse previous fiscal reforms and should be rejected to avoid unnecessary financial burdens on taxpayers.
Recommendations related to Government Workers
The Legislature should reject the bills detailed in the scorecard because they would impose expensive mandates on New York State and local governments without improving services for taxpayers.
Policymakers should ensure that proposals to enhance expensive employee benefits that would undermine hard-fought reforms are not adopted.
The state should maintain existing reforms that yield significant savings rather than rolling them back through new benefit legislation.
Key Data
$21 billion
— Projected savings from reforms to disability benefits for recently hired New York City police and fire employees over 30 years.
$46 million
— First-year cost of the bill (A4295) allowing judges to use their most recent annual salary to calculate pension amounts.
$21 million
— Annual cost of the bill (A9850/S7232) decreasing the employee contribution rate under the New York City Transit Authority 25-year/55-age plan.
$16 million
— Annual cost to New York City of providing variable supplement fund payments to those who retired between 1968 and 1987.
$36 million
— First-year cost of the bill (S5245) enhancing in-service death benefits for State correction officers.
$13.9 million
— First-year cost of the bill (A7801-A/S5936) enhancing in-service death benefits for State correction officers.
The New York State Lean Initiative has engaged over 8,500 state employees in process improvement workshops to eliminate waste and enhance service delivery across various agencies. This strategy has successfully reduced wait times and processing backlogs, including a 77% reduction in unemployment insurance claims backlogs and significant improvements in DMV and licensing efficiency.
Key Data
8,500
— More than 8,500 State workers have participated in Lean workshops.
600
— More than 600 State workers have been trained as Lean practitioners.
50%
— The Department of Motor Vehicles has slashed office wait times by more than 50% on average.
77%
— The Department of Labor has reduced its backlog of unemployment insurance break in claims requests by 77%.
New York State's retiree health insurance benefits are significantly more generous than private and public sector norms, costing taxpayers $1.3 billion in fiscal year 2016 with projections to reach $1.7 billion by 2020. Implementing the Governor's proposed reforms—including ending IRMAA reimbursements, freezing Medicare Part B reimbursements, and adjusting subsidies based on years of service—would reduce long-term unfunded liabilities by approximately $17.5 billion.
Recommendations related to Government Workers
The Legislature should adopt the Governor's Executive Budget proposals to reduce growing retiree health insurance costs.
The State should end reimbursement for the Income Related Monthly Adjustment Amount (IRMAA) to align with federal policy and stop subsidizing higher-income retirees.
The State should freeze reimbursement for the regular Medicare Part B premium at the 2015 rate of $105 monthly to limit future cost growth.
The State should moderately reduce the premium subsidy for retirees with less than 30 years of service to better align benefits with length of employment.
Key Data
$1.3 billion
— Cost to taxpayers for retiree health benefits in fiscal year 2016.
$1.7 billion
— Projected cost for retiree health benefits by fiscal year 2020.
$63 billion
— State's total long-term unfunded liability for future retiree health benefits.
$17.5 billion
— Estimated reduction in long-term unfunded liability resulting from the proposed reforms.
$42 million
— Total annual savings from the proposed reforms by fiscal year 2020.
$6 million
— Annual savings generated by ending reimbursement for the Income Related Monthly Adjustment Amount (IRMAA).
New York City's decision to raise wages to $15 an hour for public and city-contracted nonprofit employees will cost taxpayers $238 million through fiscal year 2020 without securing additional service or productivity improvements. These mid-contract wage increases undermine established labor agreements and competitive bidding processes by providing benefits without offsetting savings or efficiencies.
Recommendations related to Government Workers
At a minimum, changes to labor contracts should wait until they expire and are up for renewal or renegotiation.
At best, the costs of wage increases should be offset with increased productivity or efficiencies to improve service delivery.
Negotiations to reopen contracts should not be a one-way street in which taxpayers give but receive nothing in return.
Key Data
$238 million
— Total cost of wage increases for public and nonprofit employees through fiscal year 2020.
$36 million
— Portion of the total wage increase costs allocated to public employees.
$202 million
— Portion of the total wage increase costs allocated to nonprofit employees.
10.4 percent
— Compounded wage increase over seven years for DC37 employees.
$11.50
— Hourly wage rate established for approximately 4,500 workers in March 2015.
4,500
— Number of workers whose wages were raised to $11.50 per hour in March 2015.
Raising the minimum wage to $15 for public workers in New York would cost taxpayers hundreds of millions of dollars annually, including approximately $300 million for city-contracted social service workers alone. Because these wage increases do not inherently improve service delivery or productivity, officials must carefully consider the broader fiscal implications and potential impacts on existing pay structures.
Recommendations related to Government Workers
If a sizable increase in the minimum wage is pursued, the city and state should focus on how to simultaneously increase productivity to improve service delivery.
Policymakers should consider the impact on employees who make $16 or $18 per hour to determine if their wages will rise or if they will watch as the wages of colleagues and those they supervise grow.
Key Data
10,000
— Number of state workers affected by the governor's pledge to raise the minimum wage to $15 per hour.
$20.3 million
— Annual cost of raising the minimum wage to $15 per hour for approximately 10,000 state workers.
$19 million
— Annual cost to the city for raising the minimum wage to $15 per hour for municipal workers.
$300 million
— Approximate annual cost for wages and fringe benefits for 30,000 city-contracted social service workers affected by the $15 standard.
The New York City Fire Department faces a significant mismatch between its resource allocation, which heavily favors traditional firefighting, and its actual workload, which is dominated by medical emergencies. To address this, the department should modernize its staffing models, increase medical training for firefighters, and fundamentally reorganize to better align personnel and budgets with current service demands.
Recommendations related to Government Workers
The FDNY should apply again to the NYC-REMSCO for permission to change ALS ambulance staffing to one paramedic and one EMT, which would yield about $5 million in savings.
The department should increase the medical training of firefighters so they can handle more situations without reliance on a separate ambulance and its staff.
It may be preferable to require EMT qualifications for new applicants for firefighter jobs, which would also effectively create a career ladder for advancement among the EMS staff.
The department should fundamentally reorganize to redefine the relationships between the two services and rebalance the financial and human resources provided for each type of service.
Key Data
10,777
— The number of fire personnel employed by the FDNY in fiscal year 2015.
4,700
— The approximate number of emergency medical technicians (EMTs) and paramedics employed by the FDNY in fiscal year 2015.
$3.8 billion
— The total budget of the FDNY in fiscal year 2015.
$500 million
— The annual funding allocated to EMS operations in fiscal year 2015.
$39,370
— The starting salary for firefighters in fiscal year 2015.
$59,079
— The salary for paramedics after five years of service in fiscal year 2015.
The 2015 disability benefit scorecard outlines the significant fiscal impact of various legislative proposals aimed at enhancing disability benefits for uniformed city employees, including police, fire, sanitation, and correction officers. These proposed changes, which include restoring prior cost-of-living adjustments and altering final average salary calculations, would result in substantial increases to both annual city budgets and long-term actuarial contributions.
Key Data
$39.1 Million
— FY2015 budget increase associated with bill S5656, which includes improved disability benefit provisions for sanitation and correction uniformed employees.
$889.3 Million
— Actuarial present value of NYC contributions through FY2019 for bill S5656.
$37.8 Million
— FY2015 budget increase for bill A6046/S4269, which grants disability benefits to Tier 3/6 police and fire uniformed employees and adds new injury presumptions.
$850.2 Million
— Actuarial present value of NYC contributions through FY2019 for bill A6046/S4269.
$37.6 Million
— FY2015 budget increase for bill S3966, which provides disability benefits for Tier 3/6 fire members.
$849.9 Million
— Actuarial present value of NYC contributions through FY2019 for bill S3966.
NY1 When it comes to police and firefighters, Governor Andrew Cuomo wants to roll back part of the pension reform he helped push through the state legislature in 2012.
The proposed fiscal year 2016 budget aims to reduce the state-controlled workforce by nearly 10 percent while implementing performance management systems for agencies. However, the plan continues to defer required contributions to state employee pension funds, a practice that risks the long-term stability of these retirement accounts.
Recommendations related to Government Workers
The State should cease the practice of deferring pension payments, as circumstances have improved since the recession and further deferral is unwise and unwarranted.
The State should repay all outstanding pension liabilities that were deferred during the recession.
Key Data
131,741
— The size of the Executive-controlled workforce in fiscal year 2010.
119,160
— The projected size of the Executive-controlled workforce in fiscal year 2016.
12,581
— The total decrease in personnel for the Executive-controlled workforce between fiscal year 2010 and fiscal year 2016.
9.5 percent
— The percentage decrease in the Executive-controlled workforce from fiscal year 2010 to fiscal year 2016.
$3.2 billion
— The amount of required contributions to state employee pension funds that the State will have deferred by the end of the current fiscal year.
$395 million
— The amount of additional borrowing of required pension payments proposed in the fiscal year 2016 Executive Budget.
The Variable Supplement Fund provides annual $12,000 bonuses to retired uniformed officers, costing the city $500 million in 2014 and draining resources from pension funds that are already underfunded. Because these payments are not constitutionally protected, they should be phased out to improve the fiscal health of the pension system and lower the burden on taxpayers.
Recommendations related to Government Workers
Phasing out or eliminating the VSF should be part of the Mayor and City Council’s agenda in Albany next year to enhance the fiscal condition of the pension funds.
The City should gradually eliminate these unusual pension bonuses for retirees to reduce the needed contributions from taxpayers.
Key Data
$12,000
— The annual Variable Supplement Fund (VSF) payment amount for eligible retired police, fire, and correction officers.
$500 million
— The total cost of VSF payments in 2014.
$2.9 billion
— The amount transferred from the pension funds to the VSFs in fiscal year 2014 due to exceptional investment returns.
17.5 percent
— The combined return on the pension system's $150.3 billion investments in fiscal year 2014.
$8.6 billion
— The total pension contributions required in the fiscal year 2015 budget.
63 percent
— The funded ratio of the fire pension fund, which is the lowest among the City's five pension funds.
New York City could save nearly $100 million annually in the short term by renegotiating sanitation labor contracts to eliminate unproductive bonuses, increase route efficiency, and expand automated collection. Long-term savings exceeding $300 million are possible by introducing managed competition for residential waste collection, implementing pay-as-you-throw fees, and diversifying the workforce responsible for snow removal.
Recommendations related to Government Workers
The City should promote flexibility in service arrangements to meet neighborhood needs, such as altering collection frequency and redesigning routes.
The City should expand the use of large containers and automated trucks to reduce physical labor and improve productivity.
The City should eliminate 'unproductive' productivity bonuses that are based on route characteristics rather than actual worker behavior.
The City should implement financial incentives to reduce refuse generation, such as pay-as-you-throw fees.
The City should introduce competition to promote efficient public waste collection by soliciting public- and private-sector bids.
The City should create franchises for more efficient commercial waste collection to reduce truck congestion and improve operational efficiency.
The City should diversify capacity for snow removal by including other public employees, private contractors, and retired sanitation employees.
Key Data
$275 million
— Annual savings from redesigning municipal waste collection policies.
$96 million
— Annual savings from implementing three short-term reforms.
600 workers
— Reduction in the sanitation workforce achievable through attrition over two years.
$72 million
— Annual savings from redesigning routes to increase average refuse collected per truck-shift to 12 tons.
$20 million
— Annual savings from expanding the use of one-worker, automated trucks.
$4 million
— Annual savings from eliminating unproductive productivity bonuses.
A widespread disability fraud scheme involving 1,500 Long Island Rail Road retirees cost the Railroad Retirement Board an estimated $1 billion, yet systemic issues persist with 96% of reviewed claims still being approved. Federal auditors have urged the board to implement stricter oversight, including better earnings data and mandatory supervisory reviews, to prevent future abuse of the disability program.
Recommendations related to Government Workers
The Railroad Retirement Board should use better earnings data to monitor the income of disability beneficiaries.
The Railroad Retirement Board should conduct a supervisory review of all disability claims to ensure sufficient supporting documentation.
The Railroad Retirement Board should develop a quality assurance review for the disability determination process.
The Railroad Retirement Board should develop performance goals to improve the oversight of disability benefits.
The Railroad Retirement Board should establish procedures to identify and to address potential fraud within the disability program.
Key Data
1,500
— Number of LIRR retirees involved in the disability fraud conspiracy between the late 1990s and 2008.
$1 Billion
— Estimated total cost to the Railroad Retirement Board if all false disability claims were paid in full.
$400 Million
— Amount in restitution and forfeiture ordered to be paid by those found guilty of disability fraud.
96%
— Percentage of reviewed disability claims from LIRR employees that were approved in March 2013.
$10,500
— Maximum annual amount disabled beneficiaries are legally permitted to earn.
New York State legislative proposals in 2014 sought to expand benefits for public employees, including pension enhancements, disability presumptions, and additional leave, with estimated costs totaling over $1.8 billion. These measures, which varied in status from vetoed to enacted, highlight the ongoing fiscal pressure of expanding retirement and health benefits for the public workforce.
Key Data
$1.1 Billion
— Past service cost associated with replacing the current benefit of 1.5% of final average salary for each year of service credit in excess of 30 years with 2.0% benefit for Tier III, IV, and V members.
$617.9 Million
— Increase in the Actuarial Present Value of benefits in fiscal year 2019 resulting from the proposal to conform Ordinary Disability Retirement and Accidental Disability Retirement benefits for New York City Tier III police members.
$374 Million
— One-time costs associated with allowing members of Tiers III and IV one month of additional service credit for each year of service after 10 years credit in NYSERS, NYSTRS, NYCERS, and NYCTRS.
$110 Million
— One-time cost associated with allowing Tier I and II employees of NYSLERS and NYSLPFRS to include up to 30 days of unused accumulated vacation time in the calculation of their final average salaries.
$87.1 Million
— One-time cost associated with allowing Tier II, III, IV, V and VI members of NYSLERS to retire without a benefit reduction upon completion of 35 years of service without regard to age.
Proposed legislation A9594/S7326 threatens to reverse 2012 pension reforms by enriching disability benefits for police officers, potentially costing the city hundreds of millions of dollars annually. These changes would undermine fiscal stability, as the city's pension costs already rose 235% between 2004 and 2013 to reach $8.2 billion.
Recommendations related to Government Workers
The Mayor should oppose the supporting home rule message under consideration in the City Council as well as the bill itself.
The Mayor should affirm his commitment to fiscal responsibility by opposing the bill that would reverse recent pension reforms.
Key Data
$8.2 billion
— New York City's pension costs in fiscal year 2013.
235%
— Increase in New York City's pension costs from fiscal year 2004 to fiscal year 2013.
$31 billion
— Estimated savings for the City over 30 years resulting from the 2012 pension reforms.
$35 million
— Increase in the City's costs in fiscal year 2015 if the proposed changes to police disability benefits are enacted.
$266.4 million
— Actuarial value of contributions required by the City to fund the new benefit in fiscal year 2015.
$617.9 million
— Actuarial value of contributions required by the City to fund the new benefit in fiscal year 2019.
New York State legislators introduced numerous bills in 2014 that would expand pension and disability benefits for various public employees, creating significant long-term fiscal liabilities. These proposed enhancements, which include retroactive service credits and more generous disability formulas, carry estimated costs totaling over $1.8 billion for state and local governments.
Key Data
$1,699 Million
— Total estimated state-level costs for the 2014 pension and benefit enhancement bills.
$116 Million
— Total estimated local-level costs for the 2014 pension and benefit enhancement bills.
$1.1 Billion
— Past service cost associated with the proposal to increase the pension benefit formula for certain Tier III, IV, and V members.
$617.9 Million
— Increase in the Actuarial Present Value of benefits in fiscal year 2019 resulting from the bill conforming disability retirement benefits for New York City police members.
New York City's Department of Sanitation faces high operational costs due to generous compensation packages for workers, including base pay and extensive fringe benefits that exceed private sector standards. Additionally, rigid union-negotiated work rules and practices, such as minimum collection frequencies and limited use of automated technology, contribute to inefficiencies and higher expenses compared to other cities.
Recommendations related to Government Workers
The City should negotiate for the use of fully-automated, one-worker trucks to reduce labor costs and improve safety.
The City should reform union-negotiated work rules, such as minimum refuse collection frequency and rigid eight-hour shifts, to allow for more efficient collection schedules.
The City should implement pay-as-you-throw (PAYT) systems for residential waste to create financial incentives for residents to generate less refuse.
The City should utilize a more diverse group of workers, including employees from other agencies and private contractors, for snow removal to reduce reliance on DSNY overtime.
The City should adopt franchise agreements for private waste carters to reduce truck traffic, emissions, and inefficiency.
Key Data
$168,000
— The amount that total compensation for a sanitation worker reaches at the end of a career.
15.8
— The average number of sick days taken by DSNY employees in 2013.
39%
— The percentage by which average earnings at DSNY were higher than the $60,509 in the local private sector in fiscal year 2012.
$100,000
— The starting compensation cost of a City sanitation worker.
8.3
— The average number of sick days taken by police department employees in 2013.
The 2014 Benefit Sweetener Scorecard tracks legislative proposals that would increase pension and benefit costs for New York's public employees, identifying over $1.8 billion in potential state and local fiscal impacts. These proposed "sweeteners" include various pension enhancements, disability benefit expansions, and service credit adjustments that would impose significant long-term financial burdens on taxpayers.
Key Data
$1.1 Billion
— Past service cost associated with the proposal to increase pension benefits for Tier III, IV, and V members.
$617.9 Million
— Increase in the Actuarial Present Value of benefits for New York City Tier III police members in fiscal year 2019.
$374 Million
— One-time costs for New York State employees related to the proposal for additional service credit.
$110 Million
— One-time cost for allowing Tier I and II employees to include unused vacation time in final average salary calculations.
$87.1 Million
— One-time cost associated with allowing NYSLERS members to retire without benefit reduction after 35 years of service.
$11.6 Million
— Past service costs for the proposal allowing SUNY police officers to transfer to the NYSLPFRS pension fund.
New York City’s municipal workforce is aging, with over one-third of experienced employees eligible for retirement within five years, creating an urgent need to attract younger talent. To address this, the city should modernize its compensation, hiring practices, and retirement benefits to better align with the expectations of a younger, more mobile workforce.
Recommendations related to Government Workers
City leaders need to think boldly about how best to reconfigure the City’s compensation and hiring practices to attract a young and skilled workforce in coming years.
City employees need more flexible retirement options.
A defined contribution retirement plan, which allows for quick vesting and portability of benefits, would be attractive to many younger workers.
City leaders should convene a task force to analyze city operations and staffing.
Updating civil service rules and collective bargaining agreements to reflect modern expectations about work will be necessary to attract young talent.
Key Data
23%
— Percentage of the City’s municipal workforce over age 55 at the end of fiscal year 2012.
19%
— Percentage of the City’s municipal workforce eligible for retirement with full benefits at the end of fiscal year 2012.
15%
— Percentage of the City’s municipal workforce that will be eligible for retirement within five years.
61%
— Short-term retirement eligibility for skilled craft workers.
53%
— Short-term retirement eligibility for officials and administrators.
51%
— Short-term retirement eligibility for administrative support staff.
New York State's workforce has declined by 4.1 percent since fiscal year 2010-11, falling from 209,231 to 200,742 employees as agencies have reduced payroll to accommodate limited funding growth. Despite these reductions, fringe benefit costs for health insurance and pensions are projected to increase at an average annual rate of 5.5 percent, adding $1.2 billion in spending over the financial plan period.
Key Data
209,231 to 200,742
— The decline in the State workforce since fiscal year 2010-11.
4.1 percent
— The total decline in the State workforce since fiscal year 2010-11.
13.1 percent
— The share of all other spending comprised by fringe benefit costs.
5.5 percent
— The average annual growth rate of fringe benefit costs over the financial plan period.
$1.2 billion
— The amount added to spending by the projected increase in fringe benefit costs.
$17.8 billion
— The amount spent on agency operations, including SUNY and corrections, in fiscal year 2013-14.
This presentation was given during CBC's Conference on The Most Important Economic and Fiscal Decisions Facing the Next Mayor , which took place on December 6, 2013.. CBC provides a framework for curbing expenditures effectively and provides 8 options for savings: Implementing health insurance premium-sharing; Consolidating union welfare funds;…
New York State's binding arbitration law for uniformed personnel often results in wage awards that exceed inflation and ignore the fiscal constraints of local governments. Legislative reforms are necessary to redefine "ability to pay" to ensure that contract settlements do not force tax increases or service reductions.
Recommendations related to Government Workers
State leaders should amend the statute to address its key weakness: inadequate consideration of the fiscal condition of State and local governments.
The statute should be revised to define “ability to pay” as the capacity to pay all costs—including related fringe benefits— of the imposed contract from recurring resources without increasing taxes, making service cuts or employing fiscal gimmicks.
Guidance and training should be provided to arbitrators so they understand how to judge “ability to pay” based on this more specific definition.
Key Data
10
— Number of contracts Suffolk County has settled with uniformed personnel through arbitration since 2000.
one-third
— Portion of the full-time county workforce in Suffolk County comprised of police officers.
New York City's municipal labor contracts have all expired, leaving the next mayor with the significant fiscal challenge of resolving them without any existing budgetary reserves for wage increases. Retroactive pay settlements for these contracts could create a multi-billion dollar budget gap, threatening the city's fiscal stability.
Recommendations related to Government Workers
A more holistic approach to labor negotiations would consider reforms to health insurance, salaries, work rules, productivity and cross-agency collaboration.
Key Data
$3.5 billion
— The estimated cost of retroactive pay in fiscal year 2014 if teachers and principals receive two 4 percent raises.
$300 million
— The approximate annual increase in operating costs for every 1 percent raise awarded to the city workforce.
$7 billion
— The potential budget gap in fiscal year 2014 if labor settlements are reached for retroactive pay and wage increases.
$72 billion
— The total budget of the City of New York, of which personnel costs make up more than half.
300,000
— The number of people employed by the municipal government to provide services to businesses, residents, and visitors.
$3.7 billion
— The cost in fiscal year 2014 of providing 2 percent wage increases to the entire municipal workforce.
The current binding arbitration process for public sector unions hinders good-faith bargaining and often results in fiscal burdens for municipalities that exceed their capacity to pay. Reforms are necessary to implement stricter decision criteria, establish clear time limits, and define a locality's 'ability to pay' to ensure sustainable labor contracts.
Recommendations related to Government Workers
Revising the binding arbitration law to strengthen localities' position is necessary to incentivize union leaders to negotiate.
The changes should include time limits and deadlines that avoid the uncertainties and risks arising from delayed, retroactive wage awards.
New, more specific decision criteria should place greater emphasis on the fiscal condition of local governments.
'Ability to pay' should be defined as the capacity of a locality to pay all costs of the imposed contract from recurring resources without increasing taxes, making service cuts or employing fiscal gimmicks.
Key Data
4.5% and 5%
— Wage increases awarded to New York City police officers for the 2004-2006 contract.
2%
— Proposed limit on annual raises for localities that meet a definition of 'fiscally distressed'.
New York City Deputy Mayor Caswell Holloway discusses public employees costs and the City's plans to rebid the health insurance plans offered to its employees.
New York City's health insurance costs for employees and retirees are projected to rise to nearly $7 billion by 2016, consuming 80 percent of the city's projected budget deficit. To address this, the city should implement premium-sharing arrangements and eliminate Medicare Part B reimbursements, which are currently more generous than those offered by most other public and private employers.
Recommendations related to Government Workers
The city must control taxpayers' obligations for health insurance for city employees and retirees through premium-sharing.
The city should require contributions of up to 25 percent from employees for their health insurance premiums.
The city should require contributions of up to 50 percent from retirees for their health insurance premiums.
The city should eliminate the Medicare Part B reimbursement for retirees.
Key Data
40 percent
— Projected growth in health insurance costs between fiscal years 2013 and 2017.
$7 billion
— Projected cost of health insurance in 2016.
80 percent
— Portion of the city's projected budget deficit that health insurance costs will equal in 2016.
90 percent
— Portion of the city's workforce enrolled in health plans that require no employee contribution toward the cost of the premium.
$1.7 billion
— Estimated annual savings achievable by requiring employee and retiree contributions and eliminating Medicare Part B reimbursement.
The SAGE Commission report outlines strategies to modernize state government operations, including restructuring agencies and reforming civil service laws to improve performance and accountability. By consolidating overlapping functions and implementing performance management systems, the state aims to continue reducing operational spending and executive headcount, which dropped by 17% between 2008 and 2012.
Recommendations related to Government Workers
The state should "right size" the expensive and underutilized criminal and juvenile justice systems by closing facilities.
The state should restructure services for the mentally ill and developmentally disabled to replace the antiquated system of care.
The state should merge and consolidate agencies and public authorities that perform overlapping functions, such as the Civil Service Department and the Office of Employee Relations, to achieve recurring savings.
The state should take full advantage of modern information technology to improve customer service and enable electronic licensing and permitting.
The state should reform the civil service law and the performance appraisal process to enhance managerial discretion in employment decisions.
The state should expand design-build authority for capital projects to all State agencies to reduce construction costs.
Key Data
135,723
— Executive headcount at the end of fiscal year 2005.
119,579
— Executive headcount at the end of fiscal year 2012.
16,144
— Decrease in the number of state staffers between fiscal year 2005 and fiscal year 2012.
12%
— Percentage decrease in executive headcount from fiscal year 2005 to fiscal year 2012.
142,041
— Executive headcount at the end of 2008.
17%
— Percentage decrease in executive headcount from the peak hiring year of fiscal year 2008 to fiscal year 2012.
New York City's public employee health insurance costs are projected to reach nearly $7 billion by 2016, driven by a system where the vast majority of the workforce pays nothing toward premiums. Implementing standard premium-sharing arrangements, where employees contribute 10% to 25% of costs and retirees pay 50%, could save the city billions annually.
Recommendations related to Government Workers
City employees should contribute 10% for individual and 25% for family coverage, similar to most U.S. workers.
Retirees should pay for 50% of the premium for their health coverage.
The city's reimbursement for Medicare Part B should be phased out.
Key Data
40%
— Projected growth in health insurance costs for public employees and retirees by 2016.
$7 billion
— Projected annual cost of health insurance for public employees and retirees by 2016.
90%
— Portion of the city's workforce enrolled in health plans that require no employee contribution.
$1.8 billion
— Total savings in fiscal year 2014 if premium-sharing reforms are implemented.
$2.2 billion
— Total savings in fiscal year 2016 if premium-sharing reforms are implemented.
$1.9 billion
— Total budget deficit projected for 2016.
New York City's health insurance benefits for public employees and retirees are significantly more generous than those offered by other public and private employers, with the city paying the full premium for most workers and retirees. To address rising costs and budget gaps, the city should implement premium-sharing for employees and retirees and eliminate the reimbursement of Medicare Part B premiums.
Recommendations related to Government Workers
The City should implement premium-sharing for employees, as employee contributions toward the cost of health insurance are the norm in the private sector and in state and local governments.
The City should require premium-sharing by retirees, as state and local governments typically require retirees to contribute more toward the cost of health insurance premiums than they did as employees.
The City should eliminate Medicare Part B reimbursement, as this practice is rare even among other state and local governments.
Key Data
$1.8 billion
— Total savings in fiscal year 2014 if the recommended premium-sharing and Medicare reimbursement changes are adopted.
$2.2 billion
— Total savings in fiscal year 2016 if the recommended premium-sharing and Medicare reimbursement changes are adopted.
$83 billion
— Estimated unfunded liability for retiree health insurance and other post-employment benefits.
90 percent
— Portion of the municipal workforce enrolled in health insurance plans that require no employee contribution toward the premium.
$280 million
— Cost to the City in fiscal year 2013 for reimbursing retirees and their spouses for Medicare Part B premiums.
$1.4 billion
— Cost to the City for retiree health insurance premiums in fiscal year 2013.
New York's current public employee pension contribution rates are significantly lower than national averages, with taxpayers covering 89 percent of costs compared to the national employer average of 66 percent. Implementing the proposed "Tier VI" pension formula would increase employee contributions to between 4 and 6 percent of wages and introduce a risk-reward mechanism to better align costs with market conditions.
Recommendations related to Government Workers
New York should implement the proposed "Tier VI" pension formula, which would raise pension contributions by new employees to between 4 percent and 6 percent of wages, depending on pay level.
The state should adopt a "risk-reward" approach where if the employer-contribution rate as a share of payroll rises above 7 percent, half of the added amount would be contributed by employees.
To balance the risk-reward model, if employer contributions fall below 4 percent of payroll, half of the saved amount would be used to lower employee contributions.
Key Data
22 percent
— In 2009, only 22 percent of state and local pension plans required employee contributions of less than 3.9 percent of wages.
55 percent
— In 2009, employee contributions of 6 percent or more were required in 55 percent of US public plans.
66 percent
— In 2010, employers in US state-run public-pension funds paid on average 66 percent of the total, while employees paid 33 percent.
89 percent
— New York state and participating local governments paid 89 percent of pension costs, while employees paid 11 percent, resulting in a ratio of 8:1.
87 percent
— In 2009, 87 percent of the amount paid to New York’s local plans came from taxpayers, while just 13 percent came from employees.
7:1
— The ratio of taxpayer to employee contributions for New York's local pension plans is 7:1, compared to a national average of 4:1.
New York's public pension system places a disproportionate financial burden on taxpayers compared to national norms, with state and local governments covering 89% of contributions while employees contribute only 11%. Adopting the proposed Tier VI pension reform would align employee contribution rates with national standards and introduce a risk-sharing mechanism to distribute market volatility between taxpayers and public sector workers.
Recommendations related to Government Workers
New York should increase the contribution rates for new employees to the pension funds of state and local governments to align with national public sector norms.
The state should adopt the 'risk-reward' approach that shares the downside risk and upside potential of pension asset market performance between employers and employees.
Key Data
78%
— Percentage of state and local pension plans nationally that required employee contributions greater than 3.9% in 2009.
89%
— Share of total contributions made by New York State and its local government entities to state-run pension systems.
11%
— Share of total contributions made by employees to New York State's state-run pension systems.
8:1
— The employer-to-employee contribution ratio for New York State and its local government entities participating in state-run systems.
$8.3 Billion
— Amount contributed to New York’s local pension plans in 2009.
7:1
— New York's ratio of employer to employee contributions for local pension systems compared to the national average of 4:1.
The Metropolitan Transportation Authority faces significant financial constraints, making a "net-zero" wage increase for transit workers the most appropriate outcome to avoid further fare hikes or service cuts. Given that transit employees already receive compensation and benefits that exceed those of comparable private sector workers and other public employees, any wage increase should be funded by productivity-enhancing work rule changes rather than additional revenue.
Recommendations related to Government Workers
The MTA should implement a "net-zero" wage increase for transit employees to avoid further fare hikes or service cuts.
The MTA should pursue work rule changes that produce savings, such as merging the positions of conductor and train operator, to enhance efficiency.
The MTA should increase employee responsibility for health care costs through premium-sharing or salary contributions, given the relatively modest contributions currently made by transit workers.
The MTA should prioritize the safety of transit workers by accelerating the installation of clear bus partitions.
The MTA should consider ending the partial Medicare Part B reimbursement for retirees to help fund potential wage increases.
Key Data
$720 million
— projected savings from the MTA's efficiency program in 2012.
$1.4 billion
— total revenue expected to be raised from fare increases by 2015.
$42 million
— cost increase for the MTA for each one point wage increase awarded to the TWU.
$92.4 million
— budget gap opened in 2012 by an award along the lines of projected inflation.
Governor Cuomo’s proposed Tier VI pension plan introduces an optional 401(k)-style defined contribution model for new public employees, aiming to increase portability and sustainability compared to traditional defined benefit plans. This shift reflects broader trends in the private sector, where participation in traditional pension plans has declined significantly in favor of defined contribution options.
Key Data
30%
— Percentage of state and local government employees with access to a defined contribution plan.
56%
— Take-up rate for defined contribution plans among state and local government employees.
76% to 24%
— Decline in the share of full-time private industry workers participating in defined benefit pension plans from 1986 to 2008.
10.15%
— State contribution rate for Colorado's optional defined contribution plan introduced in 2006.
17.4%
— State contribution rate for Ohio law enforcement and public safety officers in their optional defined contribution plan.
10%
— Utah's contribution rate for civilian state and local employees hired on or after July 1, 2011.
New York's public sector pension costs are rising rapidly, with New York City's costs projected to reach $8.6 billion by 2014 and state costs expected to hit $2 billion. Implementing a new package of pension benefits for new employees could align the state with national norms and save $123 billion over the next 30 years.
Recommendations related to Government Workers
The governor should use his influence in the budget process to bring about more affordable pension benefits at all levels of government.
A pension reform proposal should be included in the governor's budget.
The Legislature should swiftly adopt a pension reform proposal.
New York should implement a new package of pension benefits for new employees to bring the state more closely in line with national norms.
Key Data
$8.6 billion
— Projected New York City pension costs by FY 2014.
$2 billion
— Projected state government pension costs by FY 2014.
$123 billion
— Potential savings over the next 30 years from a new package of pension benefits for new employees.
$1 billion
— Projected MTA pension costs by FY 2014.
$574
— Annual taxes paid per person in New York for public employee pensions.
$143
— New York's state and local tax burden per $1,000 of personal income in fiscal year 2009.
New York State and local governments face rapidly escalating pension costs that threaten fiscal stability, with New York City's payments alone growing from $2.4 billion to nearly $7.0 billion between 2004 and 2011. Implementing the proposed "Tier VI" pension reform for new hires is projected to save $123 billion over 30 years by aligning benefits more closely with national norms and curbing excessive costs.
Recommendations related to Government Workers
The Legislature should adopt the Tier VI pension reform plan in a timely manner.
Governor Cuomo should include the Tier VI pension reform plan in the Executive Budget.
The state should consider extending the optional defined contribution plan to other groups of employees to draw those looking for more portable retirement benefits.
Key Data
$93 billion
— Estimated savings for New York State and local governments over 30 years from the Tier VI pension reform proposal.
$30 billion
— Estimated savings for New York City pension systems over 30 years from the Tier VI pension reform proposal.
$123 billion
— Total estimated savings for New York State, local governments, and New York City pension systems over 30 years from the Tier VI proposal.
$7.0 billion
— New York City's pension payments in fiscal year 2011, up from $2.4 billion in fiscal year 2004.
$803 million
— MTA pension payments in fiscal year 2011, up from $314 million in fiscal year 2004.
$2.0 billion
— Projected State required pension payment in fiscal year 2014, up from $1.5 billion in fiscal year 2011.
The current system of multiple, independent union welfare funds for municipal employees is inefficient and lacks sufficient oversight, leading to unnecessary administrative costs and inconsistent benefit management. Consolidating these supplementary health benefits under the City's health insurance program and centralizing non-health benefits could generate significant annual savings while improving accountability and service delivery.
Recommendations related to Government Workers
The varying and inefficient package of drug, dental and optical benefits provided by the multiple welfare funds should be replaced by a standard set of benefits included under the City’s health insurance program.
For non-health related benefits, a new centralized plan should be developed that could be administered by the City through the existing benefit offices in the Office of Labor Relations or by a coalition of unions.
New standards should be set for accountability of existing and any new union welfare benefit funds, including placing limits on allowable administrative expenditures and establishing reserve requirements.
The Comptroller’s Office should be given new enforcement powers to sanction entities that fail to meet standards in an adequate or timely fashion.
Repeated violations of standards by welfare funds should result in the removal of fund officials.
Key Data
$1 billion
— Annual City payments to union welfare funds.
$146 million
— Total estimated annual gain from consolidating benefits and administrative savings.
$135 million
— Estimated annual benefits savings from consolidating health-related benefits.
$90 million
— Estimated savings from using formularies for pharmaceutical benefits.
$12.7 million
— Estimated annual administrative savings from consolidating welfare funds.
81
— Total number of welfare funds operated by unions.
New York's 2010 Early Retirement Incentive program for government employees generated $681 million in net savings over two years by reducing payroll costs, though it resulted in the loss of 9,311 experienced workers. Alternative reforms to fringe benefits, such as adjusting health insurance premium sharing and eliminating Medicare Part B reimbursements, could have potentially yielded greater savings without requiring significant headcount reductions.
Recommendations related to Government Workers
The next time an early retirement incentive is proposed, more options should be explored.
School districts outside New York City should align their health insurance premium sharing plan with New York State government to achieve significant savings.
The state should eliminate the practice of reimbursing Medicare Part B premiums to reduce government costs.
The state should increase health insurance premium sharing for retirees to 50 percent to generate additional savings.
Key Data
$681 million
— The combined net savings for New York State and local governments over two years from the Early Retirement Incentive.
$1.4 billion
— The gross savings from two-year payroll reductions resulting from the Early Retirement Incentive.
$755 million
— The total pension benefit costs incurred to finance the early retirement incentives.
9,311
— The number of experienced government workers lost due to the Early Retirement Incentive.
$817 million
— The total savings that would have been achieved over two years if the same headcount reduction had been accomplished through layoffs.
New York City's fiscal plan for 2012 includes the elimination of 9,450 government positions, including 5,660 layoffs, while failing to address the long-term growth of health insurance, pension, and debt service costs. To achieve fiscal stability, the city must implement structural reforms to employee benefits, including premium-sharing for health insurance and adjustments to pension eligibility and contributions for future workers.
Recommendations related to Government Workers
The City’s leaders must work with the Municipal Labor Committee to reform health insurance arrangements.
Employees and retirees should be required to pay a share of their premiums in order to both lower taxpayer costs and to give the workers a stake in containing future premium increases.
The City Council should join the Mayor in backing the pension reform bill that has been introduced by the Governor.
The pension reform proposal would increase vesting to 12 years, raise the retirement age to 65, require greater contributions from employees, and eliminate overtime from the final salary calculation upon which benefits are based.
The City should adopt a premium-sharing arrangement similar to that of most New York State employees – 10 percent for individual and 25 percent for family coverage – to produce $625 million in savings.
Key Data
9,450
— The number of positions included for elimination in the Executive Budget proposal, including 5,660 layoffs.
$23.1 billion
— The projected spending on health insurance, pension contributions, and debt service in 2015, up from $11 billion in 2005.
$625 million
— The savings produced in 2012 by adopting a premium-sharing arrangement for health insurance similar to New York State employees.
$30 billion
— The total savings over the next 30 years from the proposed pension reform bill.
New York's pension costs for public employees have quadrupled since 2002, reaching $7 billion in New York City alone and threatening other municipal services. To address this, structural reforms are proposed to increase the retirement age to 65, raise employee contributions to 6%, and eliminate pension padding by excluding overtime from benefit calculations.
Recommendations related to Government Workers
The state should increase the retirement age to 65 for future public employees to align with Medicare eligibility.
The plan should require a 6 percent contribution from all employees for their entire length of service to bring contributions closer to national norms.
Policymakers should eliminate 'pension padding' by calculating benefits based on the highest five years of earnings and excluding overtime pay.
The state should cap maximum eligible wages at $179,000 when calculating pension benefits.
Legislators should support the structural changes proposed by the governor to reduce pension system costs while ensuring retirement security.
Key Data
$1.5 billion to $7 billion
— The growth in New York City pension costs since 2002.
$8.7 billion
— The projected cost of New York City pension contributions in 2015.
$93 billion
— The projected savings for state and local governments over 30 years from the proposed pension reforms.
$30 billion
— The projected savings for New York City over 30 years from the proposed pension reforms.
$179,000
— The proposed cap on maximum eligible wages used to calculate pension benefits.
9 to 1
— The current ratio of employer contributions to employee contributions in New York pension funds.
The 2011 scorecard tracks various legislative bills that would increase benefits for public employees, such as retirement plan changes and health benefit protections, often resulting in significant state and local costs. These proposed measures include changes to final average salary formulas and the granting of additional service credits, which collectively impose substantial financial burdens on taxpayers.
Key Data
$130.0 Million
— Local cost for bill A5093, which changes how the final average salary is determined for Tiers II, III, & IV State and local employees.
$99.3 Million
— Local cost for bill A6848, which allows State and local teachers to receive one additional day of service credit for each unused sick day.
$97.0 Million
— Local cost for bill A3904, which permits retirement at any age over 55 for those between 25 and 30 years of service.
$95.0 Million
— State cost for bill A5093, which changes how the final average salary is determined for Tiers II, III, & IV State and local employees.
$86.0 Million
— Local cost for bill A5086, which changes the benefit multiplier for Tier III, IV, & V State and local employees.
$70.0 Million
— State cost for bill A3904, which permits retirement at any age over 55 for those between 25 and 30 years of service.
The state's budget proposal includes a threat of nearly 10,000 layoffs, but instead of across-the-board cuts, public employee unions should agree to reduce compensation costs through measures like higher health insurance contributions or furloughs. Because 70% of local government expenses are for labor, localities must also implement changes to pensions and compensation to achieve fiscal sustainability.
Recommendations related to Government Workers
Public employee unions should agree to reduce compensation costs so that many of them do not have to lose their jobs.
Localities need to make changes in pensions and compensation to address the fact that 70% of their expenses are for labor.
The state should consolidate facilities and the corrections work force where the prison population has been declining.
Implement alternatives to layoffs, such as having employees pay a higher percentage of health insurance costs, switching to less expensive health insurance plans, and lowering wages through furloughs.
Key Data
10,000
— The number of state agency layoffs threatened as part of the proposed budget reductions.
70%
— The portion of local government budgets that is comprised of expenses for labor.
New York State and City should eliminate the reimbursement of Medicare Part B premiums for retirees, a costly fringe benefit rarely offered by other public or private employers. Additionally, increasing retiree health insurance premiums to 50 percent of the total cost would help alleviate the fiscal burden of rising healthcare expenses.
Recommendations related to Government Workers
New York State and City should eliminate the public employee fringe benefit of reimbursement for Medicare Part B premiums.
The State and the City should increase premiums for retiree health insurance to 50 percent of the cost to relieve the burdens of rampant cost escalations.
Key Data
$213 million
— Total Medicare Part B premium reimbursements for New York City retirees in fiscal year 2010.
$312 million
— Projected cost of Medicare Part B premium reimbursements for New York City retirees by 2014.
$140 million
— Total cost of Medicare Part B premium reimbursements for New York State in fiscal year 2010.
$20 million
— Minor fiscal relief provided by the State's limitation of reimbursements to 90 percent for individual coverage and 75 percent for family coverage.
50 percent
— Projected increase in New York City Medicare Part B reimbursement costs between 2010 and 2014.
New York faces a significant budget deficit driven in part by rapidly rising costs for public employee retirement and health benefits, which are largely funded by taxpayers. To ensure the future viability of essential public services, state leaders must address the unsustainable growth of these pension and benefit obligations.
Recommendations related to Government Workers
New York's leaders must control the cost of public retirement benefits to ensure the ability of state and local governments to provide essential public services.
The state Legislature should cease the practice of passing legislation to "sweeten" pension benefits annually.
New York should reform the policy that allows overtime to be included in final average salary calculations for pension determinations.
The state should address the disparity where employee contributions are minimal and fixed, leaving taxpayers to foot the bill for investment shortfalls.
Key Data
$9 billion
— projected budget deficit for New York state for the next year.
$1.5 billion
— current annual pension contributions for New York state.
8:1
— ratio of employer contributions to employee contributions for pension funds in New York.
$61,295
— average pension received by police and firefighters who retired in 2009.
$25,440
— average pension received by regular civilian employees who retired in 2009.
$56 billion
— unfunded liability for retiree health insurance benefits for the state.
New York City spends $1 billion annually on union welfare funds, which suffer from poor financial management and inefficient benefit delivery. Consolidating these benefits under the City's health insurance plan and implementing a centralized cafeteria model could save taxpayers approximately $146 million annually.
Recommendations related to Government Workers
The City should consolidate supplementary health care benefits under the City's health insurance program to improve efficiency and reduce costs.
The City should provide non-health related benefits through a centralized cafeteria plan to achieve economies of scale.
The City should improve accountability for any remaining union welfare fund expenditures by setting stricter standards for administrative costs and reserve requirements.
Key Data
$1 billion
— Annual City payments to union welfare funds.
$146 million
— Estimated total annual savings from consolidating supplementary health benefits and administrative functions.
$12.7 million
— Estimated annual administrative savings from consolidating welfare funds.
$90 million
— Estimated savings from using formularies to reduce pharmaceutical costs.
$254,052,851
— Total City payments to District Council 37 in 2007.
$250,646,789
— Total City payments to the United Federation of Teachers in 2007.
The New York State Legislature has advanced numerous bills that would increase pension and benefit costs for state and local employees, despite the system already being unaffordable. The Governor is urged to veto these measures to maintain fiscal responsibility and prevent further strain on the pension system.
Recommendations related to Government Workers
We are writing to ask that you veto the bills enhancing benefits for State and local employees and retirees.
We encourage you to continue to stand for fiscal responsibility and veto these bills and any others that come before you.
Key Data
$1.1 million
— Annual added contributions for New York City teachers resulting from the proposed final average salary calculation change.
25
— Number of bills enhancing benefits for State and local employees and retirees tracked on the annual Sweetener Scorecard.
3
— Number of bills already sent to the Governor for consideration during the week of July 22, 2010.
New York State legislators frequently propose and pass 'benefit sweeteners' that expand pension, leave, and retirement perks for various public sector employees, often without considering the long-term fiscal impact on taxpayers. These legislative actions consistently increase the financial burden of public employment by granting additional service credits, improved disability benefits, and relaxed retirement requirements.
Key Data
eight hours
— Paid leave granted to state and local employees to undertake screenings for colon cancer.
35 years
— Service requirement for NYSERS members to retire without a benefit reduction.
20 years
— Service credit requirement for state police officers to receive an improved death benefit.
New York City and State provide retirement benefits that are significantly more generous than those offered by private employers, contributing to rapidly rising costs for taxpayers. To address this, the government should transition to defined contribution plans and reform existing pension and health insurance structures to align more closely with standard practices.
Recommendations related to Government Workers
Require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
Stop reimbursing retirees for Medicare Part B premiums.
Increase required employee contributions to the pension plans, and do not limit them to ten years.
Raise the minimum age requirement for retirement to align with federal Social Security thresholds.
Base pension benefits on the more standard definition of final average salary, excluding overtime and other supplements.
Define work-related disabilities more rigorously to ensure there is clear evidence of a work-related cause.
Eliminate the variable supplements available to some retired New York City uniformed workers.
The City and State should seek to place all new workers in defined contribution plans.
Key Data
$4.7 Billion
— Projected annual pension fund contributions for New York City in fiscal year 2008.
$6.3 Billion
— Projected combined cost of health insurance for New York City and State in 2008.
$1.5 Billion
— Combined cost to the City and State of health insurance for retirees in 2004.
$12,000
— The amount of the annual variable supplement payment, or 'Christmas bonus,' for certain retired New York City uniformed workers in 2007.
$131 Million
— Cost to New York City in 2004 for reimbursing retirees for Medicare Part B premiums.
$88 Million
— Cost to New York State in 2004 for reimbursing retirees for Medicare Part B premiums.
New York State faces significant fiscal pressure from rising public employee compensation, with total costs projected to reach $22.2 billion by fiscal year 2013-14. To address this, the state should implement structural reforms including increased employee health insurance premium contributions, a defined contribution pension option, and a freeze on filling vacant government positions.
Recommendations related to Government Workers
A wage freeze in which State employees forego the scheduled 4 percent increase would be a good start to controlling labor costs.
For single health insurance policies, the individual's share of the premium should increase from 10 to 20 percent.
For family health insurance policies, the premium sharing should increase from 25 to 30 percent.
For retirees, the health insurance premium sharing should be increased to 50 percent for both single and family policy holders.
The practice of allowing retirees to buy down the future costs of health care premiums by applying unused sick days should be discontinued, and the reimbursement for the cost of Medicare Part B premiums should be ended.
A defined contribution option should be added to the pension system for all State employees to share downside risk.
The need to fill any position in State government in the coming year should be reexamined to reduce staffing levels.
Negotiations with public employee unions should include adding hours to the workweek in order to reduce needed staffing levels and overtime.
Key Data
$18.9 billion
— Total employee compensation in fiscal year 2009-10, including wages, salaries, and benefits.
$87,000
— Average annual compensation per employee in fiscal year 2009-10.
$22.2 billion
— Projected total compensation for state employees in fiscal year 2013-14.
$102,000
— Projected total average compensation per employee by fiscal year 2013-14.
$56.3 billion
— Estimated unfunded liability of providing retiree health care for State employees.
$581 million
— Estimated fiscal benefits associated with proposed changes to health insurance premium sharing.
The New York City school system faces a $4.1 billion budget gap, necessitating reforms to teacher contracts that currently prioritize job security over performance and student needs. Proposed changes include ending indefinite compensation for teachers not in classrooms, implementing merit-based pay, and eliminating seniority-based layoff rules.
Recommendations related to Government Workers
The city should end compensation for teachers who aren't teaching, limiting it to a six-month period while they search for a new job.
The process for quick termination for unsatisfactory teachers should be greatly expedited to avoid paying them for years while cases are considered.
The school system should use financial rewards to attract qualified teachers in hard-to-fill fields like special education, math, and science.
The city should replace seniority rewards with merit pay, which would eventually save enough money to fund a substantial merit-pay program.
The city should kill the "last in, first out" rule for layoffs, which forces the newest teachers to be fired first regardless of their performance.
Key Data
$4.1 billion
— The size of the city budget gap necessitating job cuts and reforms.
$100 million
— The annual outlay on teachers who are not currently teaching.
2 percent
— The maximum raise proposed for city teachers in their next contract.
2,500
— The number of potential job cuts if contract negotiations do not result in savings.
1,400
— The number of teachers paid to be in the 'Absent Teacher Reserve'.
$74 million
— The annual cost of maintaining the 'Absent Teacher Reserve'.
New York City taxpayers currently spend $10.4 billion annually on pension and health benefits for municipal employees, a figure that exceeds private-sector standards. Aligning these benefits with private-market practices by requiring employee contributions and shifting to defined-contribution pension plans could generate significant annual savings.
Recommendations related to Government Workers
The city should require its current workers to make contributions toward health-insurance premiums equal to the amounts paid by employees of local private-sector firms.
The city should require retirees to make contributions toward health-insurance premiums to align with private-sector policies.
The city should convert to defined-contribution plans for future hires to make pension benefits more competitive with the private sector.
Key Data
$10.4 billion
— Total annual cost paid by New York City taxpayers for pension and health-insurance benefits for current and retired municipal employees.
$1.4 billion
— Potential annual savings for taxpayers if the city offered benefits similar to those in the private sector.
$628 million
— Potential annual savings from requiring current workers to make contributions toward health-insurance premiums.
$741 million
— Potential annual savings from requiring retirees to make contributions toward health-insurance premiums.
8 percent
— Percentage of surveyed private firms that do not require payments toward health insurance premiums from their workers.
90 percent
— Percentage of surveyed private firms that offer defined-contribution pension plans.
New York City taxpayers spend $10.4 billion annually on pension and health insurance benefits for municipal employees, a cost that could be reduced by nearly $1.4 billion by aligning these benefits with private sector standards. Transitioning to defined contribution pension plans for future hires and requiring employee contributions toward health insurance premiums would allow the city to maintain a competitive workforce while achieving significant fiscal savings.
Recommendations related to Government Workers
The City should require from its current workers contributions toward health insurance premiums equal to the amounts paid by employees of local private firms in the survey to save about $628 million annually.
The City should implement a policy requiring retirees to contribute toward health insurance premiums, which would result in savings of another $741 million annually.
The City could be competitive with the private sector by converting to defined contribution plans for its workers.
Because the State Constitution prohibits changes in benefits for current workers, the City should apply new pension policies only to future hires.
Key Data
$10.4 billion
— Annual cost to New York City taxpayers for pension and health insurance benefits.
$1.4 billion
— Potential annual savings from aligning health insurance benefits with private sector firms.
$628 million
— Annual savings from requiring current workers to contribute to health insurance premiums.
$741 million
— Annual savings from requiring retirees to contribute to health insurance premiums.
52
— Number of major firms that responded to the benefits survey.
100,000
— Total number of employees represented by the surveyed firms in New York City.
The state legislature passed a deficit reduction program and created a new, less costly pension tier for government employees, though the program relies heavily on non-recurring items. Additionally, a new provision making it harder to modify retiree health benefits for teachers was enacted, potentially limiting local school districts' ability to control costs.
Recommendations related to Government Workers
The Legislature should stick to the terms of the new pension tier and refrain from passing 'sweetener' bills that raise costs.
The Governor and all future Governors must stand firm against demands from other employee groups for the same retiree health insurance benefits granted to teachers.
Key Data
$2.8 billion
— Total value of the Deficit Reduction Program package.
$400 million
— Amount by which the Deficit Reduction Program fell short of the Governor’s proposed target.
$3.2 billion
— Total current-year deficit.
59 percent
— Share of the deficit covered by non-recurring items in the final Deficit Reduction Program package.
The 2009 legislative scorecard identifies various bills that expand pension and retirement benefits for specific groups of public employees, including police, firefighters, and teachers. These proposed enhancements are characterized as increasing the already generous retirement packages available to government workers.
Uniformed employees in New York State receive significantly more generous pension benefits than civilian counterparts, with the majority retiring before age 60. To effectively curb rising state and local pension costs, new uniformed hires must be included in the proposed Tier V pension system rather than being exempted through legislation like A3426/S1409.
Recommendations related to Government Workers
The Governor should veto A3426/S1409 to prevent the extension of Tier II pension provisions to new police and fire hires.
New uniformed employees must be eligible for Tier V benefits along with civilian employees to effectively curb rising state and local pension costs.
Any effort to exempt uniformed employees from Tier V benefits, even on a temporary basis, should be rejected.
The Governor should resist any effort to exempt certain classes of employees from the provisions of the new Tier V pension system.
Key Data
86 percent
— of uniformed employees who retired from the New York State Police and Fire Retirement System were under the age of 60.
$48,900 to $66,586
— is the range of annual lifetime pension payments for uniformed employees who retired last year.
20 percent
— of salary is the amount public employers are expected to contribute to fund the pension of a uniformed employee.
11 percent
— of salary is the amount public employers are expected to contribute to fund the pension of a civilian employee.
Rising pension costs for New York City employees represent a significant and growing financial obligation for the municipal budget. Understanding these retirement benefits is essential for assessing the long-term fiscal health of the city.
New York's public employee benefit packages are significantly more generous than private sector norms, with the state being one of only six to pay for retiree Medicare Part B premiums. To address fiscal challenges, the state should reduce its workforce size and increase employee contributions toward health insurance and pension costs to align with other public sector standards.
Recommendations related to Government Workers
The Legislature should require a greater share of health insurance premiums to be paid by current and retired employees, bringing healthcare contributions in line with those of other public sector employees.
For retirees, the Legislature should require a 50 percent contribution to their premium costs and eliminate reimbursement for Medicare Part B premiums.
For current employees, the Legislature should increase contributions to family healthcare plans from 18 percent to 22 percent.
The Legislature should take all possible actions to reduce the size of the State’s workforce.
By examining the root causes of high growth in employment in key agencies, such as SUNY, CUNY and the judiciary, the state could contain growth without damaging core services.
Key Data
94 percent
— of public pension systems require greater employee contributions than New York's average.
13,000
— higher number of employees in fiscal year 2009-10 compared to the end of fiscal year 2003-04.
$283 million
— annual savings achievable if agency workforces were reduced to fiscal year 2006-07 levels.
$430 million
— annual savings from requiring retirees to pay a 50 percent contribution to health premium costs.
$200 million
— annual savings from eliminating reimbursement for Medicare Part B premiums for retirees.
$75 million
— annual savings from increasing current employee contributions to family healthcare plans from 18 percent to 22 percent.
New York's state and local government pension systems require reform to control rising costs, including changes to retirement benefits for new hires and increased health insurance cost-sharing for retirees. These adjustments aim to align public sector benefits more closely with private sector standards and ensure long-term fiscal sustainability.
Recommendations related to Government Workers
The state should eliminate one annual pay increase, typically averaging 3 percent, for state employees that was planned as part of recent collective bargaining agreements.
The state should require retired state employees to pay a larger share of their health insurance premiums.
The state should reduce the share of health insurance premiums paid for workers retiring with less than 30 years of service and apply this cost-sharing to Medicare Part B premiums.
The state should eliminate the inclusion of overtime pay in calculating the worker's salary base for pension benefits.
The state should increase the minimum age requirement for most workers from 55 to 62.
The state should extend the employees' mandatory contribution beyond the first 10 years of service.
The state Legislature should embrace the governor's proposals and consider enhancing cost-sharing for current workers as well.
Key Data
3 percent
— Average annual pay increase for state employees planned as part of recent collective bargaining agreements.
90 percent
— Portion of retirees' individual health insurance premiums currently paid by the state.
75 percent
— Portion of family health insurance premiums currently paid by the state.
55 to 62
— Proposed increase in the minimum age requirement for most government workers to receive pension benefits.
10 years
— Current duration of mandatory employee pension contributions.
$25 million to $500 million
— Projected annual savings from pension changes for new hires.
Between fiscal year 2000 and 2008, the average compensation cost for a full-time New York City employee grew by 63 percent, reaching $106,743. This rapid increase was primarily driven by a 700 percent surge in pension benefit contributions, which significantly outpaced compensation growth for private sector and other government workers.
Key Data
$106,743
— Average compensation cost per full-time New York City employee in fiscal year 2008.
63%
— Growth in the City's average employee compensation cost between fiscal year 2000 and fiscal year 2008.
700%
— Growth in the City's average contribution for pension benefits per full-time employee between fiscal year 2000 and fiscal year 2008.
$20,333
— Average contribution for pension benefits per full-time employee in fiscal year 2008.
$69,100
— Average pay per full-time employee in fiscal year 2008.
$37,619
— Average fringe benefit costs per full-time employee in fiscal year 2008.
State government workers often receive compensation packages that exceed those of their private-sector counterparts, necessitating reforms to health insurance and retirement benefits. Increasing the standard work week for state employees to 40 hours and establishing a new pension tier for future hires are proposed measures to improve fiscal discipline and ensure government serves the public effectively.
Recommendations related to Government Workers
The state should scale back health-insurance and retirement packages for state-government workers, as many are now paid more than their private-sector counterparts.
Legislators should create a new 'tier' for future employees' pension benefits, which would address the issue of generous packages and eventually save $216 million annually.
The state should increase the work week for state employees to 40 hours a week from the 37.5 hours currently required of most state workers, saving $227 million.
Key Data
$216 million
— Annual savings from creating a new pension tier for future state employees.
$227 million
— Annual savings from increasing the work week for state employees to 40 hours.
New York's prison system is currently overstaffed and underutilized, with the number of correctional officers failing to decrease proportionally to the declining inmate population. Closing unneeded facilities and rightsizing the workforce could save the state millions annually, allowing funds to be redirected toward more effective public investments.
Recommendations related to Government Workers
The number of correctional officers can be reduced.
The prison system should be built around correctional needs, not local employment.
The Legislature and the public need to support the governor's plan to run a prison system that meets the state's needs to safely provide for the inmates in custody with the appropriate number of correctional officers.
Key Data
500
— The number of correctional officers employed by the state has dropped by this amount, representing less than 2 percent of the workforce.
$57,000
— The annual cost of keeping someone in the custody of the prison system, including debt service and fringe benefits for employees.
$3.6 billion
— The annual operating cost of the whole prison system.
$34 million
— The estimated operating savings from prison closures when fully annualized in the financial plan.
$30 million
— The savings in capital costs that will be generated in fiscal year 2010.
New York faces significant budget gaps that require fiscal discipline, including restructuring state employee compensation and benefits to align with private-sector standards. By increasing the work week for state employees and reforming pension and health insurance contributions, the state can achieve necessary savings without reducing essential services.
Recommendations related to Government Workers
The state should restructure its health insurance to bring it in line with other public-sector employers by requiring an additional 4 percent contribution toward family plan premiums from current workers.
New York should insist on a larger contribution toward premiums for retirees and eliminate repayment for Medicare Part B premiums.
The state should restructure pensions for future employees by creating a new tier for them to address the unusually generous benefits compared to other public and private-sector workers.
The state should increase the work week for state employees to 40 hours from 37.5 to improve fiscal discipline.
Key Data
$1.1 billion
— Annual cost of state-required pension contributions for employees and retirees.
4 percent
— Additional contribution toward family plan premiums that should be required from current workers.
37.5 hours
— Current work week for state employees.
40 hours
— Proposed standard work week for state employees.
In order to promote fiscal reform, the Citizens Budget Commission (CBC) convened three separate agenda-setting conferences for key stakeholders in the state budget process in 2007. Each session focused on one aspect of fiscal reform with a goal of identifying specific changes for the coming budget cycle. The expectation is…
Local governments in New York face high labor costs due to a high number of employees and wages that exceed the national average, exacerbated by collective bargaining frameworks like the Taylor Law. Reforming the pension system and revising the collective bargaining process, including arbitration criteria and negotiation models, are essential to controlling these costs and easing the local tax burden.
Recommendations related to Government Workers
The current unnecessarily expensive pension system should be reformed by converting to a defined contribution rather than a defined benefit system.
The state should make pension benefits more reasonable by excluding overtime in benefit calculations, setting higher retirement age requirements, and requiring larger employee contributions.
State law should require arbitrators to award wage increases that do not necessitate tax increases or are funded in part by productivity gains.
Arbitrators should be allowed to grant an award that is “chronologically current” in the event of severely expired contracts.
New York should adopt alternative resolution processes like “last-best offer” negotiations to replace the current system of arbitration.
Key Data
459
— Number of local government workers employed for every 10,000 residents in New York localities, excluding New York City.
8.5%
— Percentage by which the average local government wage in New York exceeds the national average, excluding New York City.
$44,536
— Average annual local government pay in New York State, excluding local New York City employees.
97%
— Growth in health insurance, pensions, social security, and other benefits for teachers from school year 1995 to 2005.
14%
— Percentage of state and local contracts negotiated in New York in 2006-2007 that were brought before the Public Employment Relations Board.
New York City's performance management framework requires significant reform to better align budget allocations with program outcomes and efficiency goals. The City should adopt more rigorous outcome-based metrics, utilize comparative benchmarking against other municipalities, and incorporate citizen satisfaction surveys to improve accountability and service delivery.
Recommendations related to Government Workers
City leaders should connect money and performance in the budget by reorganizing it to better track programs and program performance.
The City should focus on efficiency measurement by making the measurement and reporting of unit costs a high priority in every service area.
Leaders should improve outcome measurement and reporting by pushing to develop and track desired results for every service area.
New York City should develop and present comparative performance measures so that New Yorkers can compare the caliber of their services to those provided by other competitor cities.
The City should expand the use of citizen-derived outcome measures by measuring public perception of City services through satisfaction survey measures rather than just complaints.
Key Data
$54 billion
— The total size of the New York City enterprise.
24 out of 30
— The number of largest U.S. cities that publish performance metrics in their budgets.
$4.9 billion
— The amount of the Department of Education's 'General Education Instruction and School Leadership Personal Services' unit of appropriation.
31 percent
— The portion of the Department of Education's fiscal year 2007 budget represented by a single unit of appropriation.
$2.4 billion
— The amount of the Police Department's 'Operations' unit of appropriation, covering two-thirds of the agency's budget.
13.2 million
— The number of calls handled by the 3-1-1 service center in fiscal year 2006.
Taxpayers currently contribute $4 billion to municipal pension funds and $900 million for retiree health insurance, with costs projected to exceed $5.7 billion by 2010. To address these spiraling expenses, the city should reform the pension system by excluding overtime from benefit calculations and raising the retirement age for new hires.
Recommendations related to Government Workers
The city should implement the proposal to trim pension benefits for newly hired workers to address spiraling taxpayer costs.
The city should exclude overtime earnings from the pension benefit formula, as this practice is rare in other systems.
The city should increase the retirement age for city employees to better align with the age for full Social Security benefits.
Key Data
$4 billion
— taxpayer contribution to the pension funds of municipal workers in the current fiscal year
$900 million
— cost to taxpayers for retiree health insurance
$5.7 billion
— projected pension contributions in 2010 if no changes are made
15%
— average hourly wage advantage for public employees over private firms found in a 2004 survey
30%
— hourly wage advantage for blue collar public employees over private firms found in a 2004 survey
Public sector compensation in New York City, including wages and retirement benefits, now exceeds private sector norms, creating a fiscal burden that necessitates structural reform. The report advocates for transitioning to defined contribution plans and aligning retirement benefits with broader market practices to reduce costs and protect taxpayer resources.
Recommendations related to Government Workers
The long-run goal of pension reform should be to convert from defined benefit to defined contribution plans.
The City should increase required employee contributions for new hires, as current requirements are lower than in most other systems.
The City should raise the minimum age requirement for retirement to align with federal Social Security thresholds.
Pension benefits should be based on a more standard definition of final average salary that excludes overtime and other supplements.
The City should define work-related disabilities more rigorously to prevent the broadening of access to benefits without clear evidence of a work-related cause.
The City should eliminate the variable supplements available to some retired uniformed workers, which act as "Christmas bonuses" and contradict the principle of predictable income.
The City should require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
The City should stop reimbursing retirees for Medicare Part B premiums to align with benefits provided by other large employers.
Key Data
$3.2 billion
— The City's contribution to pension funds in fiscal year 2005.
$927 million
— The amount the City paid for health insurance for retirees in fiscal year 2005.
43 percent
— The portion of all retired firefighters classified as having a job-related disability in 2002.
$325 million
— The estimated savings the City would have realized in fiscal year 2004 if retirees were required to pay 50 percent of their health insurance premiums.
$131 million
— The estimated savings the City would have realized in 2004 if it stopped reimbursing retirees for Medicare Part B premiums.
47-to-one
— The ratio of people passing the sanitation officer exam for each opening.
New York's public sector retirement benefits, including pensions and health insurance, have become significantly more generous than those offered by private employers and are driving rapid growth in government expenditures. To ensure long-term fiscal sustainability, the state and city should transition to defined contribution plans and reform existing benefits to align more closely with private sector practices.
Recommendations related to Government Workers
Require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
Stop reimbursing retirees for Medicare Part B premiums.
The long-run goal of pension reform should be to convert from defined benefit to defined contribution plans.
Increase required employee contributions to pension plans, as the current requirement is often limited to ten years.
Raise the minimum age requirement for retirement to align with federal Social Security standards.
Base pension benefits on the more standard definition of final average salary, excluding overtime and other supplements.
Define work-related disabilities more rigorously to prevent broad access to benefits without clear evidence of a work-related cause.
Eliminate the variable supplements available to some retired New York City uniformed workers, which contradict the principle of predictable income.
Key Data
$615 million
— Required contributions to pension funds for City workers in fiscal year 2000, which tripled to $2.3 billion by fiscal year 2004.
$6.3 billion
— Projected combined cost of health insurance for City and State workers and retirees in 2008, a 50 percent increase from 2004.
$35.16
— Average total compensation cost per hour among public employers in 2004, which was 47 percent higher than the $23.90 per hour for private sector compensation.
$1,450
— Annual out-of-pocket cost a typical single City retiree under age 65 would face if required to pay 50 percent of their health insurance premium.
$12,000
— The amount that annual variable supplement payments, or 'Christmas bonuses,' for some retired New York City uniformed workers are soon to reach.
New York City's public school system requires significant reforms to teacher compensation and management, including performance-based pay and expanded managerial discretion for principals, to improve educational outcomes. These changes, alongside more efficient use of teacher time and targeted financial incentives for shortage areas, are essential to ensuring that increased funding translates into a sound basic education for all students.
Recommendations related to Government Workers
Teachers should be given financial incentives for better performance, with pay schedules revamped to make a larger share of compensation conditioned on job performance and to de-emphasize longevity and graduate educational credits.
Financial incentives should be used to overcome shortages in selected teaching job titles by offering differentials to teachers who qualify for specific titles and agree to work in schools facing the greatest difficulty securing qualified teachers.
The managerial discretion of principals should be expanded by allowing principals to select teachers for given posts from among multiple candidates rather than forcing the decision to be made on the basis of seniority.
A reasonable reduction of non-instructional time in the form of fewer preparation periods, elimination of sabbaticals and released time for union work would yield annual savings of about $350 million.
A new statewide system of accountability for schools should be established that includes planning for how funds will be used, reporting on how funds are actually used, reporting on student performance, and sanctions for unsatisfactory managerial performance.
Key Data
$350 million
— Annual savings from reducing non-instructional time for teachers, including fewer preparation periods and the elimination of sabbaticals and released time for union work.
$9,573
— The amount a teacher can increase their annual salary by under the current contract through earning graduate credits.
$32,659
— The amount a teacher can increase their annual salary by under the current contract due to longevity.
17%
— The percentage of the system’s total positions that were in serious shortage in the 1999-2000 school year.
1/3
— The proportion of all teacher time in New York City schools that is spent on duties other than classroom instruction.
New York City's municipal workforce has grown by 10,700 employees over the last six years, with fringe benefit costs rising 54 percent to $4.2 billion in fiscal year 2001-02. To address budget gaps, the City should implement a 40-hour work week for civilian employees and optimize police staffing by reassigning administrative roles to civilians and reducing predictable overtime.
Recommendations related to Government Workers
The City should require civilian employees not currently working a 40-hour week to adopt a 40-hour work week to increase efficiency.
The City should reassign police officers from jobs better done by civilians to law enforcement duties to reduce costs.
The City should reschedule the police officers’ work day to increase time in law enforcement and decrease paid time for changing uniforms.
The City should stop using officers on overtime to perform duties that are predictable and could be scheduled in advance.
The City should negotiate with the unions on fringe benefits and work with the State legislature on pensions to control costs.
Key Data
80,000
— Number of non-managerial civilian employees in the City of New York.
10,700
— Number of additional full-time City employees compared to six years ago.
1,600
— Number of police officers currently filling positions that could be staffed well with civilians.
$610 million
— Police Department overtime expenses in fiscal year 2002.
$4.2 billion
— Total cost to the City for employee fringe benefits in fiscal year 2001-02.
72 percent
— Increase in health insurance benefit costs for City employees in fiscal year 2001-02.
Increasing the workweek for approximately 67,000 non-managerial civilian municipal employees from 35 to 40 hours could eliminate over 8,000 positions and generate approximately $498 million in annual savings. To achieve these efficiencies, the City should implement strategies such as broad-banding job titles, consolidating work locations, and utilizing part-time staff to manage peak-hour demand.
Recommendations related to Government Workers
This report recommends that those civilians not working a 40-hour week be required to do so.
The shift to a 40-hour week should be accompanied by the sharing of work across agencies and combining tasks now limited to narrowly defined job descriptions, known as 'broad-banding.'
For those at the smaller locations, the shift to a 40-hour week should be accompanied by relocation to more concentrated offices or dividing time among two or more locations.
Peak-hour demand would be more efficiently met by increasing part-time staff during the peak periods.
Key Data
$498 million
— Estimated annual savings to the City from moving non-managerial civilian employees to a 40-hour workweek.
8,500
— Number of positions that could be eliminated if all non-managerial civilians worked a 40-hour week.
67,000
— Number of civilian workers currently in jobs scheduled for 35 hours per week.
$58,001
— Average savings per worker including salary, fringe benefits, and space costs.
1,556
— Total number of different work locations for civilian employees.
80,203
— Total number of non-managerial civilian employees.
The 2000 contract negotiations between the Board of Education and the United Federation of Teachers offer an opportunity to implement structural changes aimed at improving public school performance. These negotiations serve as a mechanism to address educational outcomes through the collective bargaining process.
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