The day of reckoning will come as soon as Bloomberg is re-elected. He is using every cent of a $2.7 billion surplus carried over from the good years to close the current budget gap, and with projected gaps over the next two years of $12 billion, mass layoffs—especially of teachers—might as well be announced at the victory party. "The mayor has typically looked to get headstarts on significant shortfalls," says the IBO's Doug Turetsky. "The fact that he didn't this time was out of character. So he put a new twist on the term 'election-year budget.' Rather than big new spending, he held off from taking the kind of steps he might have in a year without municipal elections."

The biggest drag on the budget—exploding pension costs—can't be laid solely at the mayor's feet. In fact, some of the blame can be assigned to his Democratic opponent, Bill Thompson, whose investment decisions as a prime manager of the pension funds have become a target of Bloomberg commercials. But even the mayor's office agrees that roughly 30 percent of the new costs are attributable to the salary and benefit hikes he granted, which, in turn, pushed pensions higher. Though city officials concede that the 43 percent cumulative hike in teacher salaries awarded by Bloomberg is the largest in the country, they argue that the average boost for city workers is only six points higher than inflation. At the outset of his first term, Bloomberg demanded productivity improvements to pay for these salary increases, but he largely abandoned that demand around the time of his re-election, in 2005.

Lax management is also driving pensions upward. Nearly three of four retiring firefighters since 2004 are receiving disability pensions, collecting three-quarters of their pay tax-free for the rest of their lives (25 percent of Chicago firefighters get disability pensions). Incredibly, many firefighters are even racking up overtime after their supposedly disabling injury, juicing up their departing pay to grab even bigger pensions. That's only one of the overtime scams tolerated by Bloomberg management. The state's Financial Control Board (FCB) recently concluded that the city "has done little to control overtime spending," which, it says, is "one of a few areas in the city's budget directly under management control." Overtime, says the FCB, has boomed an average of 3.2 percent per year in the past five years, exceeding a billion dollars for two years in a row.

Jason Seiler


Research assistance: Steve P. Ercolani, Aaron Howell, L.C.E. Jordan, Kate Rose, Amanda Sakuma, Grace Smith

Jim Hanley, who has been the city's labor commissioner for 20 years under four mayors, tried to put the salary hikes in context during a Voice interview, noting that the city engages in pattern bargaining, even granting two-year, 14 percent salary increases to police at the same time it was laying off 5,000 of them during the fiscal crisis of the mid-1970s (when Hanley was a young assistant in the office). This pattern bargaining, which intertwines the increases granted to various unions and began in 1898, is the reason that Bloomberg was still awarding two-year, 8 percent boosts just a few months ago, even as the city economy collapsed, insists Hanley. Remarkably, as bleak as the budget is, Bloomberg has set aside funding for 8 percent increases for teachers, to be awarded right after election. "The city is now ending that pattern," Hanley explained, predicting that "there will be a much greater emphasis on being frugal in the next round of bargaining." If Bloomberg is re-elected, "he will be tougher on these issues," he contended, adding that the budget crunch will give him the leverage to be tougher. He says that "almost all unions prefer layoffs" to any givebacks or reductions in salary increases, because laid-off workers can't vote in union elections. The administration appears content to live with even this union priority.

Bloomberg correctly blames a compliant state legislature for pushing pension costs higher by passing "sweetener" bills that enrich them, and Hanley says the mayor has almost uniformly opposed this periodic largesse (even as he became the single largest donor to the Republican Senate that approved them). Bloomberg "has fought these sweeteners harder than any mayor I've worked for," Hanley contends, adding that Bloomberg recently cajoled the legislature into raising the service requirement for pensions to 22 years for new police officers and firefighters, two years more than the longstanding 20-and-out early eligibility that has the city picking up the tab for 10,000 cops who've recently retired in their forties. Hanley cites this adjustment as evidence that, seven and a half years into his two terms, Bloomberg is finally attacking the pension issue with effect. The teachers union also recently agreed to modify their pensions, and a coalition of municipal unions signed off on increased co-pays for health care.

All of this is too little, too late, but Bill Thompson is unlikely to bring the issue of labor and pension costs up during the campaign, since some of the city unions are backing him.

No mayor ever—here, or anywhere else in America—has done more to fight illegal guns. It's a promise Bloomberg made to the families of cops killed by imported guns. The anti-gun war is just a part of Bloomberg's public safety record, which is admirably better than his celebrated predecessor's.

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