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Union Leaders say Bloomberg 'Lying' about Pensions

Wednesday, February 09, 2011

WNYC
Steve Cassidy, president of the Uniformed Firefighters Association, says the mayor is Steve Cassidy, president of the Uniformed Firefighters Association, says the mayor is "lying." (Azi Paybarah/WNYC)

Mayor Michael Bloomerg is being called a "liar" who is trying "steal" pension benefits by the leaders of the police and firemen's union, who rallied on the steps of City Hall Wednesday morning.

"He's unhappy with the deal that was struck 23 years ago. Too bad. That was the deal," said Steve Cassidy, president of the Uniformed Firefighter's Association. "A deal was struck. It's a defined benefit. It goes on forever…if he doesn't like it, too bad. He cannot lie about it and pretend it's not a deal."

Bloomberg, for his part, told reporters earlier in the day "We certainly didn’t put out anything that is to the best of my knowledge not accurate and true." He added, "Nobody wants to get cut back, I understand that, we have to make a decision. Do we want to send out Christmas bonuses or have more teachers?"

At issue are $12,000 payments the city makes to about 30,000 retired police and firemen, that are known formally as a Variable Supplemental Fund. Bloomberg has said he'll probably have to lay off "thousands" of public school teachers unless the city can stop the payment.

Pat Lynch, president of the Patrolmen's Benevolent Association, said he and Cassidy's union needed to "battle back agains the attack, lies and false information that is being put out by the mayor's office to perpetrate stealing our benefits and our variable supplements."

The payments originated from a 1968 deal where these two unions gave the city a lump sum payment of several million dollars, along with concessions on their pay scale. In exchange, the city invested the money in the stock market, kept the benefits, and sent the union members a small check annually. In 1988, under Mayor Ed Koch, the deal was adjusted to make those payments a "defined benefit," locking in the $12,000 figure for the payments. 

Koch's secretary said he was traveling out of the country and unavailable to comment about the matter.

Cassidy and Lynch said the city reaped "billions" of dollars when the market rose, and through the pay scale concessions.

Bloomberg has said the city needs to cancel the payments, and, more generally, cut back on pension payments to future municipal workers, saying pension payments have grown from $1.5 billion to more than $7 billion during his tenure alone.

In testimony about the state budget in Albany, the mayor asked state legislators to let the city cancel the payments. During the testimony, a Republican legislator from upstate New York asked the mayor if the New York City Council needed to vote in favor of this change before the state could consider it — a move known as sending a "home rule" message.

Bloomberg said it was unlikely, but if so, he was confident the City Council members would approve it.

"I think the City Council is going to have to sit there and say, '10,000 teachers or a home rule message.' That seems to me something that'll carry pretty quickly, but I don't even think it's needed," Bloomberg said 

Later that day, City Council Speaker Christine Quinn, a Democrat with strong union ties and a close working relationship with the mayor, said it was likely the City Council would need to vote on it first. She declined to speculate on its chances of passing, saying they had not discussed it as a body yet.

The rally Wednesday morning was unusual for its tenor and tone. Cassidy and Lynch repeated referred to Bloomberg as dishonest, a "liar" and characterized his move as an effort to "steal" money from their members. While the mayor has sometimes been at odds with different unions, today's comments were among the harshest he's received in years.

"We did endorse the mayor in the past election," said Lynch of the policeman's union, "and we're calling him a liar today because he's saying lies in the public." 

"We never endorsed him and he is a liar," said Cassidy.

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Comments [8]

Ron from long island

Gary tell the lending institution you barrowed from I have no money, see what happens to your car, house, apartment, furniture. Or default on your student loans because "there just isn't any money" see what the federal government does. Plain and simply put agreements have to mean something or our country is headed to hell in a handbasket. Honor the agreement Mr. Bloomberg!

Feb. 10 2011 11:05 AM
dannymac from long island

stephen of bedford- were you on the same job I was?????!!!!!!!! "Unlimited" sick??? Nothing could be further from the truth!!!!!!!!

And what did we get when there was plenty "of money around"? Zero pay increase for the first three years of a five year contract?

Feb. 10 2011 01:46 AM
Nate Bowman

Why is there any question as to whether the city should fulfill its obligations on the loan that first responders extended to NYC during it's time of need.

I assume it would also be OK to want to review all of the city's debt obligations to dictate
more favorable terms with the banks.

Actually, wouldn't that be fairer? Why should the problems brought on by the financial institutions be paid for by Main Street workers?

Feb. 09 2011 08:26 PM

The municipal workers of this city contribute vastly to the life of the city. These people are the backbone of NY. In many cases, there are several generations in the same family that have worked for the police, fire and sanitation departments. They contribute to the city not only in the workforce, and having their children go to our city's schools,they also live mostly in the outer boroughs because they can't afford to live in "the city". Like all city dwellers and workers, they too pay taxes that helps not only the government, but also themselves.

I believe that the mayor has a smug attitude that does not reflect the workingclass people of this city. The wealthy class, of which the mayor is the kingpin does not pay their fair share of taxes, especially real estate and income tax. Yes, many people will argue that point and even the mayor will say that if we increase taxes, the rich too will leave NYC. Don't believe that for one second. The wealthy class will never leave NY and they must pony up more dollars now, more than ever.

Feb. 09 2011 06:14 PM
Stephen from bedford ny

What else could you expect. Do you think the uniformed retirees would applaud. Lets remember no one wants to give anything up. It is age old. Even the Bible warns that to those who much is give much is expected. The uniformed workers for all the credit they take can not portray themselves as modest. As a former member of the NYPD I used to laugh when I would see how much I was entitled to. The health care the uniform allowance, the unlimited sick days the disability for a heart condition. Where else could this be afforded except the richest city on earth.

Feb. 09 2011 04:49 PM
Oscar from Ny

Bloomberg is a bloodlibel..he hates with a passion if yu make kinda of easy money in ny..he hates teachers..he hates ppl who got a good deal in ny..hes more interested in taking away yur freedoms and blitzing the city with tickets..this man is scary..cant wait til hes gone..im sure hell go back were he came from...

Feb. 09 2011 04:00 PM
william from queens

Gary, what you have to realize is that the city of ny has never ever paid 1 cent to pay the defined benefit. That fund was created from 100 million dollars of employee contributions. It has been funded ever since from pension fund overages. To date there is over 1.5 billion dollars in the combined Police Defined Benefit Funds. not 1 penny is from nyc tax payers.

Also note that when the defined benefit fund was created a mechanism was put in place whereby the city could "skim" overages from that fund. to date the city has skimmed close to 4 billion dollars since 1988.

If the legislation that created the fund is undone the city loses this skim. They also lose the ability to invest police pension funds in the stock market. that was also part of the 1988 agreement. the city also has a mechanism in place to "skim" from the regular pension funds when there is an overage. To date the city has skimmed close to 6 billion from that fund .

Its a blatant lie to say the defined benefit payments are paid by the city. If the payments ended today the city would not save 1 penny. That is a fact.

Like throwing a pebble into a pond. It doesnt seem like a big deal, but its the ripple effect that causes trouble. NYC will be out alot of money in the long run. thats a fact.

Feb. 09 2011 03:56 PM
Gary from New York

I realize it is difficult on the unions, but they have to realize that there isn't any money around. The contract agreements were made in the past based on unrealistic expectation. If this was the private sector, the companies would go under and there would be nothing. It is unfortunate, but I see the mayor's point of view. We are in a new era and everyone will have to sacrifice. It will hurt everyone for a while until the economy recovers and then we have to have a smaller government.

Feb. 09 2011 03:24 PM

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