Repost: THE DEFINING MOMENT OF THE SPITZER ADMINISTRATION HAS ARRIVED
I don’t allow myself the indulgence of saying I told you so. And frankly, showing that you were ignored as something you cared about was sold down the river is hardly satisfying, as the damage rolls on and on. But I am concerned that people won’t follow the link in my prior post. And with Eliot Spitzer back in the public’s eye (in our face?) I’m repeating the post from February 17th, 2008 on the decision that defined Eliot Spitzer as a public chief executive. Spitzer, the man who (like the rest of them) screwed the powerless young. This was written just before it happened. Last line: Make a stand here, and it will define you. Join the deal, and it will as well. The post follows.
It is here. For 50 years, powerful organized interests in collusion with New York’s elected officials have, in backroom deals without public discussion, without public disclosure, without any consideration of anyone else, walked off with large chunks of New York’s subsequently diminished future. The cost of these deals has generally been hidden for a year or two, and then described as the inevitable consequence of circumstances beyond anyone’s control. Or “uncontrollable expenses.” For example, at a time when most Americans, and most New Yorkers, have no retirement plan at all other than Social Security, public employee unions, again and again, have cut deals with elected officials for earlier retirement with richer pensions. The result, when the bills come due, has been higher taxes, diminished public services, diminished public benefits, and lower pay and benefits for future public employees. That is one of the reason we pay so much in taxes for police, yet starting police officers get $25,000 per year. The most recent deal would allow New York City’s teachers to work five fewer years, retire, and thus get paid to do nothing for five additional years. It has been sent to Governor Spitzer for his signature, after passing the legislature virtually overnight with virtually no dissent, just as everything like it passes. This, and not Joe Bruno’s helicopter rides, is the real moral issue, and the measure of Governor Eliot Spitzer’s values.
The pension sweetener…No, let’s have someone tell the truth. The shift of resources from the education of New York City’s children to those paid to do nothing in Florida is part of a contract…No. It is part of a political deal between the UFT and Mayor Bloomberg. When the deal was agreed, the Mayor made a major announcement about a temporary bonus program that relies on private money and is likely to disappear in short order. The union quietly informed its members that the main point of the deal is allowing thousands of its members to walk at a young age without having to give up anything, without having to pay anything, without having to make any contribution to anyone else ever again. When this other part of the deal, the part that actually matters, was raised, Mayor Bloomberg said it would not cost anything. Nothing. No one would pay. No would sacrifice. Nothing would be lost. Just as Carl McCall did when he cut a massive back-door pension deal in exchange for political support when running for Governor.
Now I am well aware that calling someone a liar in a public forum is a radically harsh and extreme thing to do. And it saddens me to do so, given that Bloomberg has been a good mayor overall, and has earned my considerable goodwill. But in this case, Mayor Bloomberg is a liar. Let’s start with the fact that the bill itself, as passed by the legislature, calls for New York City to contribute $100 million dollars extra to the pension fund per year, according to the New York Times. That $100 million, however, is a lowball estimate based on bullshit assumptions, just like all the other assumptions behind all the other pension deals. When those assumptions are not realized, it will be described as “due to circumstances beyond our control.” Just like the higher taxes and lower services in the wake of the “free” 2000 pension deal are so described. How much will it cost? Might it be $200 million? Perhaps $300 million? No one will ever tell us.
What is even more outrageous is the reason given as to how the deal would supposedly save the city money in the long run. The take home pay of all future teachers would be cut by forcing them to pay far more into the pension plans -- allegedly far more than the value of the additional years of retirement they will receive. The very future teachers New York City will be forced to hire in competition with the rest of the metropolitan area, where teachers are already paid more than they are here. Teachers with seniority would get to walk despite paying nothing extra. New teachers pay a massive amount, unless they are smart enough to work elsewhere, because the deal only applies to New York City. Indeed, a UFT union rep told me (based on what the union told him) that future teachers are the only ones who will be sacrificed to pay for the deal, as if the UFT itself believes its own future members -- who will be forced to pay union dues like or not so who cares? -- are only victims.
Should younger members vote to decertify the so-called unions that have robbed them repeatedly, and made them pay for the privilege? I would have. The counter argument is this. As one DC37 rep explained after that union’s similar deal, the future workers would actually benefit because by making the job less attractive, it would be available to less qualified and motivated workers who would do a worse job, and would not have been hired elsewhere. Then what about public services? Not their problem; those who matter live in the suburbs. My response was that the government should contract out every damn thing and fire every damn worker, if public service is being destroyed in that way by those in it.
But I believe the real cost to those other than future teachers is much greater than is being disclosed. Actually it isn’t being disclosed, but it is much higher than anyone would even admit if they were forced to disclose it.
But the lie is much more massive than that. What about non-pension benefits, such as health care? How much does providing all those additional people with benefits in exchange for nothing cost? Nothing in the deal says any teachers, present or future, will contribute to that. But who will?
The Department of Education employs 120,463 people according to the city’s financial plan, and spends $2.7 billion on benefits other than pension contributions. According to the most recent Annual Report of the New York City Comptroller, the teachers retirement plan has 61 retirees for every 100 workers; meaning you have to pay 161 people to get 100 to work (including those of the 100 who are out sick). Applying that ratio to all Department of Education employees, you have $2.7 billion in non-wage, non-pension benefits for 194,472 workers and retirees, or $13,369 each. Assuming teachers are evenly distributed through the age distribution, shifting from 30 years of required work to 25 would allow one-sixth of the teaching staff to retire early. Immediately. Since the four-year plan reports 96,721 pedagogical employees, that would mean 16,120 of them would get to walk, and in exchange for no work would receive benefits costing $213 million dollars. And since the city would always have that amount of additional retirees for the same number of working teachers, that cost would repeat every year, adjusted upward for health care inflation, forever.
Add in the $100 million (or $6,173 per sudden retiree, allegedly enough to pay for a pension worth far more) that has been admitted to, and you have an extra annual cost of $313 million dollars. Unless the city cannot afford to replace the teachers who leave, so the number of teachers plus retirees does not change, and class sizes soar, as they did after a temporary early retirement deal in the mid-1990s. And are eventually replaced by uncertified non-teachers, sometimes a series in a single classroom, as in the late 1990s when the economy recovered and available teachers were only willing to work in the rest of the metropolitan area where they, not just those who left, would be well compensated.
Mayor Bloomberg has proposed cutting the school budget that is actually spent in the schools by $324 million next year. Perhaps he’ll negotiate it back to $313 million.
The UFT had the chutzpah to participate in protests against that budget reduction.
Do the Mayor and UFT object to my math? Show me theirs. Where is it? Where was the debate over now much this would cost, how much taxes would rise, how much education would have to be cut, how the competitiveness of attracting future teachers would be affected? Where was the discussion of whether this is fair to the young, to the future, to all those people working and paying taxes with no retirement plan at all, so that when the retired teachers go to a restaurant or a store they can get a better deal at their expense? Are the Democrats the party of equity? Of the less well off? Of the workers? This deal passed the Democrat-dominated state assembly no problem, according to the New York Sun, the only newspaper to cover the deal. No announcement was made.
And what about the Republicans, allegedly the party of small government, of lower taxes and efficient government, and against waste, fraud and abuse? According to the Sun “the (State) Senate quietly passed the measure on Wednesday. It did not get much public attention, because that same day lawmakers announced with much fanfare an agreement with the New York Racing Association…On January 28, the state teachers union announced it was endorsing Republican Assemblyman Will Barclay's bid for an open Senate seat that will be decided in a special election on February 27. The race is viewed as a must-win for Majority Leader Joseph Bruno's conference, which holds a fragile 32- to 29-seat advantage over the Senate Democrats. Although the North Country district is predominantly Republican, Mr. Barclay is facing surprisingly heated competition from his Democratic challenger, Assemblyman Darrel Aubertine.”
Well we all know what the state legislature is. And some of us know what the Republican Party and the Democratic Party actually stand for. The rest is posturing. This is what they are. In reality, they are all on the same side, hell bent on leaving as little for the future of this state as possible. They are out to destroy us in favor of their little cliques and backers, which are the only people they care about. That is why if nine out of ten New Yorkers could push a button and make them disappear, they would. Unfortunately, they are either too ignorant or too lazy to do anything more difficult than push a button, and the system is rigged to make it much more difficult to make our state legislators disappear.
What about Bloomberg? Why did he do this -- the same thing that has been done over and over again, for decades -- enrich those cashing in and moving out, cut wages and benefits for those who will be hired later, screw the next generation. Why, why, why? He, of all people, can’t claim financial ignorance.
Mike Bloomberg has four black marks on his record. By black marks, I don’t mean mistakes, like the mismanaged start-up of the revised school bus system. Anyone who tries to make things better is going to make mistakes. I’m talking about evil. I’m talking about satisfying the insatiable greed and sense of entitlement of those who have been working the system to the detriment of everyone else, and hurting everyone else and the future in the process, as part of a deal for your own personal advancement, and lying about what you have done to yourself and everyone else.
Mayor Bloomberg lied about the city’s fiscal condition for the first 11 months of his administration, to cover up problems until Governor Pataki and the state legislature were safely re-elected. To do this, he borrowed $1.5 billion. Then, immediately after the election, huge tax increases and service cuts were “suddenly” required. We are still paying perhaps $60 million a year ever year in exchange for nothing on that debt. It was the biggest campaign contribution in history, with our money, just to get Bloomberg in good with the people who matter.
To help his re-election, Mayor Bloomberg offset his 18 percent property tax increase by sending homeowners, who already have the tax system slanted their way, a check for $400. Hey Bloomberg, I want to hear you say it would be fair and just for the next Mayor to increases taxes another 18% and increase the check to $800, and explain why that is so. And why not do another 18% and increase it to $1,200?
With the City of New York going bankrupt as a result of the 2000 pension sweetener, also described as “free,” the Mayor went along with the union preference to enrich those cashing in and moving out at the expense of future members, reducing the pay of new teachers 6 percent relative to those who came before, and slashing the pay of new police officers, firefighters, and most other titles by 15% to 40%. As a result, the unions did not oppose his re-election. Hey Bloomberg, how about cutting the pay of new teachers to $15,000 as part of the next contract, once the real cost of this pension deal is admitted to? I’m sure we can get some high school dropout violent parolees to teach kindergarten to 35 kids for that.
Three times Bloomberg sold out our future. And now this. But why? He doesn’t need to run for re-election. Is part of the deal the silence of the teacher’s union if he touts his educational record in a run for President?
Mayor Bloomberg might also point to another provision he has won, the fact that bad teachers excessed from one school do not automatically have to be accepted by another school. It is almost impossible to fire teachers individually if they merely decide not to do their job rather than committing “misconduct,” but it is now possible to close a school, and thus indirectly rid the system of the worst in that school simply by not rehiring. So the teacher’s union, rejecting individual accountability, has accepted collective accountability? Is their view that if the majority of teachers, the ones who are competent and care, can carry the goldbricks and grifters and a school works despite them, then everything is OK, but otherwise changes can be made?
Well guess what the UFT wants changed about Mayoral control? They want to make it impossible for the Department of Education to close a school without the approval of a body it can control politically. Expect the state legislature to agree, 212 to 0. After which either no schools will be closed, or no teachers will lose their jobs, no matter how bad they are, if a school does close. Like the privately-funded bonus plan, this is a mirage that is going away. Anyone could see it.
So now the deal goes to Governor Spitzer for signature. During the campaign for Governor, I thought Suozzi would be the man who might really change things, and when this very issue came up Suozzi said he would veto every one of these pension deals that came across his desk. Spitzer dissembled. That’s why Spitzer is Governor. He was the establishment candidate. And now the establishment is looking to get paid. Was Eliot Spitzer’s subsequent emergence as a reformer willing to speak truth to an outsized sense of entitlement backed by power a mirage as well?
What do I want Governor Spitzer to do? It is not enough for him to quietly veto the bill, with some mushy statement, like Pataki used to do -- until he eventually rolled over and signed. He has to make a statement, to let people know he is on their side. For too long, he should say, those cashing in and moving out of this state have enriched themselves and sold out future generations, running up debts and enhancing their pensions, pensions that most taxpayers don’t get, and then agreeing to lower wages and diminished benefits for those who come after. He will not sign such a bill, he should say, unless it can be proven with publicly vetted faces that future teachers will not be worse off as a result of this deal.
For too long, he should say, New Yorkers have paid more and more taxes for fewer and fewer services because more and more money has been sucked out of our future by greed in our past, through debts, pensions, deferred costs, advanced revenues, and infrastructure disinvestment. He should demand a public vetting of the assumptions behind the cost of the pension enhancement, both for the pension and for other benefits, to show that there will be no costs that have to be offset by higher taxes or diminished public services.
If current teachers aren’t paying, if future teachers won’t be treated unfairly, if taxpayers won’t be stuck with a bigger bill, and if New York City’s children won’t be cheated again, then where, he should ask, would the money come from to allow teachers who haven’t paid in an extra dime to live a life of leisure with pay and benefits for five extra years? He will not sign, he should say, until he knows who the loser is, and is convinced that it is fair. Where is the commission? Where is the report? Why is this fair? How does it work? The state legislature decided congestion pricing needed to be studied for a year. This was passed in two days in the dark where no one could see it.
And where should he say this? He should say it in the North Country. He should say that this deal is what the people of the North Country would be voting for if they elect Republican Assemblyman Will Barclay to the State Senate. He should ask Democratic challenger Assemblyman Darrel Aubertine to state publicly that if he is elected he will work to ensure that those seeking to cash in and move out aren’t allowed to suck the state dry, so that young people have a reason to stay. He should say that if the people of the North Country are prepared to do this to the people of New York City, they should not be surprised if the people of New York City blame them in the future.
And what if he signs the bill? Well, if New York City’s state education funding is cut while the rest of the state gets an increase, as in the past two recessions, and the New York State United Teachers and the UFT pretend to object but continue to give their money and support to the incumbents who cut the city’s share of education funding, then that was part of the deal -- teachers with seniority get a lifeboat, and ship is left to go down again. And Governor Spitzer is in on it, in exchange for support for his re-election. In his first budget presentation, Governor Spitzer was proud to show the whole state that after the whole Campaign for Fiscal Equity lawsuit New York City’s share of state education funding, including back-door funding via STAR and other “school tax relief” programs, would not go up. In his second budget, no such information has been provided. Why not, Governor?
Governor Spitzer set up the Excelsior Committee to advance a reform agenda. “We believe,” its website says, “a commitment to fairness, responsibility and public integrity is essential for good governance but often far too absent from our public officials.” Governor Spitzer, do pension enrichments for those who are already highly privileged in their retirement benefits, at the expense of future teachers, children, and worse off taxpayers, all done in the dark without public disclosure, demonstrate such a commitment? How is this different from the financial self dealing of the Wall Street firms you prosecuted? In fact two kinds of people are getting richer, top executives who sit on each other’s boards and vote for each others’ outsized pay, and retired public employees. Everyone else is getting poorer. And it is the result of theft.
After the Governor showed a willingness to challenge unfair policies and special deals for another powerful set of interests, those in the Greater New York Hospital Association and Local 1199, who had gotten their own deals in the dark over the years, I contributed a small sum of money to the Excelsior Committee as a reward for speaking truth to power. It was political contribution number three lifetime, not counting spending on my own campaign for state assembly.
Governor Spitzer, if you sign that bill, I want my money back. The donation wasn’t about being on anyone’s side, or being in anyone’s camp. It was about “fairness, responsibility, and public integrity.” No matter what the political cost is, no matter how much you feel you need powerful, self-interested backers for your re-election, now is the time to show it. Over and above its cost, the symbolism of this deal is enormous. It is at the end of a thousand similar deals, and will be followed by many others. Make a stand here, and it will define you. Join the deal, and it will as well.