Chief-Leader
August 10, 2015 4:30 pm

 

CBC Warns Costs Of Police Hiring Could Ruin Future Budgets

By MARK TOOR

Mayor de Blasio’s plan to increase the size of the city’s workforce—particularly add­ing 1,297 cops and 415 civilians to the Police Department—is a recipe for financial problems in future years, a conservative budget-watch­dog group said last week.

“The headcount additions require that revenues continue to grow faster than projected to keep the budget balanced,” the business-funded Citizens Budget Commission said in a report released Aug. 4. “The new police officers are particularly expensive in future years owing to their salary growth and their high pension-fund-contribution rates.”

Headcount Rising 6%

The commission noted that the number of city employees is expected to increase 6 percent, or 17,850 people, in fiscal 2016 compared with fiscal 2014, Mayor Michael Bloom­berg’s last year in office.

“Their salaries will build $890 million into the city’s recurring spending, plus $270 million for health-care and other fringe benefits, and $80 million in pension contributions, for a total of $1.2 billion,” the report said.

“While such additions are affordable this year given stronger-than-expected revenue gains, budget gaps grow to $2.8 billion by fiscal year 2019, even in the absence of a recession.

“Reducing the size of the workforce quickly in the event of a downturn can require politically-unpopular and managerially-complex layoffs, so the recent large headcount increases could pose a risk to future fiscal health and service delivery.”

Cites Salary Escalation

The commission said that police officers are particularly expensive. “Although their initial salary is comparable to other city workers, their salary nearly doubles during their first five years; they also require a higher pension-contribution rate than civilian employees, 20.7 percent versus 6.7 percent of payroll,” the report said.

The cost could be driven up further by an arbitration ruling involving the Patrolmen’s Benevolent Association that is expected in the next couple of months. The PBA decided to go to arbitration rather than accept the city’s pattern for uniformed workers of 11-percent raises over seven years.

The CBC also warned of what it called “pension-sweet­ener” attempts in Albany. That referred to the effort to equalize line-of-duty disability pensions for officers hired after 2010.

Former Gov. David Paterson vetoed an extension bill passed for decades that would have provided newer officers with a three-quarter, tax-free disability pension. Now, officers hired after 2009 can get only half-pay, taxable, with half of any Social Security disability benefits subtracted, which would leave some with as little as $27 per day.

A Dramatic Change

Police unions have insisted that the new rule does not provide enough to live on and that all officers deserve the same benefit. Mayor de Blasio had opposed restoration of full benefits, but two days after the CBC analysis was issued, he announced a contract settlement with the Uniformed Firefighters Association that included a pledge to support the disability-equalization bill sought by the unions.

The cost to the city would be somewhat reduced by a higher pension-contribution rate for Firefighters hired after 2009. The deal raised the possibility that the PBA would end its arbitration to negotiate similar terms.

The commission also questioned how successful the city would be in enforcing an overtime cap in the NYPD. The City Council, which push­ed hard for additional cops, argued that reducing the department’s overtime budget would make them more affordable. “The details of the city’s plan to enforce a new overtime cap have yet to be disclosed,” the report said.

The Council and Police Commissioner William J. Bratton made various arguments to justify the new cops, including an increase in police involvement in community problems, a new unit that would handle anti-terrorist patrols and crowd control, strengthening the pre­cincts and reducing the need for overtime.

‘Need Savings Elsewhere’

The CBC said the NYPD headcount increase would cost $170 million in 2016 and $142 million in 2019, not including salary escalation as the new cops gain seniority. That’s with a budgeted $63-million decrease in overtime starting in 2017. Those costs include salaries but not pensions and fringe benefits, the commission said.

It also noted that because new officers take 5½ years to reach top pay, the budget, which projects only four years at a time, does not reflect the full cost. The cost in fiscal 2022 will be $212 million, the report said. That year, fringe benefits will add $39 million and pension payments another $20 million, it said.

“If the administration expects to maintain these personnel and programs during the next economic downturn, it should seek substantial efficiencies elsewhere in the budget,” the report concluded.