New York City\u2019s short-term pension costs will fall under a state budget bill set to pass Tuesday, but changes championed by Mayor Zohran Mamdani will increase the tab by billions of dollars for the next decade.<\/p>\n
Mamdani, a democratic socialist, sought approval<\/a> from state lawmakers to push off \u2013 or \u201cre-amortize\u201d \u2013 some required pension payments during the following five years. The maneuver will let him save as much as $2.2 billion<\/a> as he tackles a projected $5.4 billion deficit for the next fiscal year.<\/p>\n At the same time, Albany lawmakers are approving enhancements to the 2012 Tier VI retirement law<\/a> that will sweeten public pension benefits and cost New York City an additional $123.3 million each year.<\/p>\n The pension re-amortization will cost New York City an additional $7.6 billion over the next 10 years. The Tier VI changes will add around $1.4 billion over the same period.<\/p>\n Mamdani has said he was open to changing the Tier VI law, but was wary of adding additional costs. His spokespeople didn\u2019t respond to requests for comment. The city spends around $10 billion a year on its pension costs.<\/p>\n Andrew Rein, president of the fiscal watchdog Citizens Budget Commission, said both actions will only create more problems down the road.<\/p>\n \u201cWe are continuing the habit of increasing costs we can’t afford and making our children pay our bills,\u201d Rein said. \u201cThis is not the right path to fiscal stability. This is exactly what gets us into problems when we need to get out of problems.\u201d<\/p>\n The Tier VI changes will affect more than 500,000 teachers, cops and firefighters, as well as state and local government office workers across New York. It will cost state and local governments, including New York City, a total of $551 million annually, according to fiscal analyses released late Monday.<\/p>\n The Tier VI deal prompted cheers from public-sector unions and groans from associations that represent cities and towns. Both Democratic and Republican lawmakers said they were supportive of the measure.<\/p>\n \u201cThis is a victory for public workers across New York,\u201d New York State United Teachers President Melinda Person said. \u201cWe are taking an important step toward building a fairer future for the next generation of public workers. And we\u2019re going to keep fighting.\u201d<\/p>\n Gov. Kathy Hochul has said she supports the pension overhaul. Changes will take effect immediately after she signs the bill. <\/p>\n The package has perks for various parts of the public workforce. Teachers will be able to retire without penalty at age 58 \u2013 down from 63 under the Tier VI law. State and local agency workers will pay less toward their pensions. Police officers and firefighters will get to include more overtime earnings in the final salary that\u2019s used to calculate their pensions.<\/p>\n Hochul and state lawmakers settled on the deal after a monthslong campaign by public-sector unions.<\/a> The unions say the current level of pension benefits makes it harder to recruit workers, and that changes were important to create a level playing field between newer hires and older workers.<\/p>\n