One major theme of Mayor Michael Bloomberg’s State of the City Address yesterday was his call for belt tightening in light of spending cuts and tough economic times.
The mayor specifically brought up one example of spending that he hopes to eliminate: the $12,000 annual Christmas bonuses that are given out to retirees from the police and fire departments (These bonuses are paid in addition to regular pension benefits).
Funny, we remember a very different Bloomberg message about annual bonuses not so long ago.
Wasn’t it just last April that Mayor Mike told us to stop harshing on huge Wall Street annual bonuses?
Bloomie’s position was that if we tax the bonuses of top Wall Street executives, these jet set execs will just pack their bags and set up shop somewhere else. Bermuda, maybe, where no one taxes your big bonus.
This year, according to the DealBook blog, Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, and JP Morgan Chase set aside nearly $90 billion dollars to pay out in bonuses. The entire New York City pension plan system — including teachers, police, fire fighters, and other employees — has $109.6 billion in assets
UPDATE: According to the Citizen’s Budget Commission, the city will save around $400,000 a year if it stops paying out the Christmas bonuses to retirees. On the other hand, if just one percent of the nearly $90 billion in Wall Street bonuses were taxed, the city would have nearly a billion more dollars to make use of.