By Philip Newman
The average cost of employing a New York City municipal worker has reached more than $82,000 a year, largely because of fringe benefits that have risen 90 percent since 2000, a fiscal watchdog agency reports.
The Citizens Budget Commission, a nonpartisan civic organization which compiled the report, said the city must apply the brakes to benefits or face continual cuts in services.
The report said firefighters were the city’s most expensive workers at an average of $125,169 a year, including annual pay of $74,393 and benefits of $50,776. Police were close behind.
The report said average benefits for all municipal workers totaled $12,664 in the 2000 fiscal year but have shot up by 90 percent to $24,062 in fiscal 2004.
“A significant part of the city’s budget problem is caused by growing personnel costs,” said Diana Fortuna, president of the commission.
“The city will be continually forced to cut services if these costs are not curtailed,” Fortuna warned.
Although the average municipal worker is paid $58,660, the agency said that the cost has climbed to $82,722 because of a list of benefits, including pensions and health insurance.
“The cost of New York City’s work force is growing faster than in other places,” the report said.
According to the Bureau of Labor Statistics Employment Cost Index, the cost of total compensation has grown 12 percent for private sector workers compared with 11.3 percent for state and local government workers between fiscal years 2000 and 2003. But in the same three-year period the comparable figure for New York City municipal has climbed 22.2 percent.
“Benefits expenses will have grown 15.6 percent for private sector workers and 14 percent for state and local government workers, while New York City employee benefits expenses will have grown 48.2 percent,” the report said.
The commission urged Mayor Bloomberg and union leaders to negotiate what it called “reasonable” changes in fringe benefit policies that will yield recurring savings.
These include:
Requiring workers and retirees to share in the cost of health insurance premiums, which the CBC said would save the city hundreds of millions of dollars per year.
Establishing a new and less expensive pension tier for incoming workers. The CBC said this might involve creating a defined contribution plan to replace the existing, costlier defined benefit plan.
The commission said the fringe benefits included pensions, health insurance, payroll taxes, contributions to union-sponsored supplemental benefit plans, disability and injury insurance and allowances for some workers to buy uniforms.
The report also said;
The average cost of uniformed members of the Police Department is $118,025 with pay of $76,665 and fringe benefits at 54 percent of pay.
Teachers are the city’s largest group of workers, or 39 percent of full-time workers, with an average cost of $83,376 per year, including salary of $60,165 and fringe benefits totaling $23,211.
The cheapest group of workers are the city’s 84,000 civilian employees who perform administrative and service functions in all city agencies. They average $59,765 in expenses to the city, of which $46,092 is pay and $13,673 is fringe benefits. It is these employees who have taken the brunt of recent layoffs.
Discussing the cost of benefits for firefighters and police, the report said “pension benefits for firefighters and police officers are expensive as the result of unusually generous benefits given to uniformed workers partly in recognition of the challenging nature of their work.”
The CBC went on to point out that “firefighters and police retirees who suffer heart ailments at any point in life are presumed to have suffered the ailment due to their municipal work. The payments to these retirees are increased by 50 percent.”
Reach contributing writer Philip Newman by e-mail at Timesledger@aol.com or call 229-0300, Ext. 136.
