Bloomberg’s $68.7 Billion NYC Budget Stretches Pension Payments - Businessweek

Bloomberg’s $68.7 Billion NYC Budget Stretches Pension Payments - Businessweek

Reduced agency spending and efficiencies, combined with state aid and revenue from taxes and increased parking fees, would close a $2 billion gap for fiscal 2013 that remained after the November actions, Bloomberg said. Budget officials predicted a $3 billion deficit for 2014, according to documents released with the mayor’s proposals.

The city’s pension costs have increased to $8.4 billion this year from $1.5 billion in 2002, when Bloomberg took office, representing almost 13 percent of the $67 billion budget for fiscal 2012, which ends June 30.

The city owes its pensions more than previously anticipated because officials have been too optimistic in assuming an 8 percent return on the $115.2 billion that the five funds hold in assets, Chief Actuary Robert North has determined. A more realistic expectation would be 7 percent, which would increase the city’s liability by about $2 billion if paid in one year, North said in a telephone interview.