Shortly after announcing with obvious pleasure the improvement in local high school graduation rates, Mayor Bloomberg cut a tentative contract deal with the teachers’ union. It’s supposed to save the city $100 million a year over 20 years, though teachers can still retire at 55 after 27 years of service with an unreduced pension — which was the union’s sticking point.
The savings is in the teachers’ contributions to the pension, which under the old terms totaled 4.85 percent of salary for 10 years before reducing to 1.85 percent, and will now stay at 4.85 percent for 27 years. Teachers also have to put in more time before they can collect retirement health benefits. Plus, they’ll start the school year later, the day after Labor Day rather than the Thursday before.
The cheers over this accord will probably be muted as the Times reported today that the city’s enormous pension costs are largely due to Bloomberg’s generosity in previous years of contract settlements. The Mayor’s big pay increases, says reporter Michael Barbaro, led to bigger pension payout — so much so that the city’s contributions to pensions increased nearly five hundred percent, and now account for a tenth of our budget.