City Controller John Liu has released a report showing otherwise:
New York City taxpayers are helping to pay $850 million in Wall Street investment fees -- even as these financial gurus have produced only meager results for strapped city and state pension funds.
City Comptroller John Liu this week released a comprehensive analysis of NYC pension costs over the past decade, revealing why they have risen from $1.2 billion to $7.7 billion.
Liu said one of the major factors in the shortfall was higher than expected investment and administrative fees, which were $71 million in 2005, and have risen more than four-fold to $313 million.
Nearly all of the increase was due to the pension funds shifting asset allocation in favor of private equity and real estate -- chasing bigger returns -- but which also have higher investment fees, he wrote.
The state pension fund, which made a similar shift, saw its expenses rise in five years from $277 million to $433 million. Add in the teacher pension fund, and total fees in 2010 reached $848 million.
Adam Lisberg in the Daily News says this report shows Wall Street is once again the culprit in stealing money and concludes that Liu is setting himself up to be the 2013 mayoral candidate of the working class:
It was a dry study that got little play, but it lays the groundwork for Liu to present himself as the voice of working New Yorkers who think they're not getting a fair shake.
Liu, like plenty of other ambitious pols, is eying a run for mayor when the Bloomberg era ends in 2013. And he's not the only one who thinks the path to City Hall will be to stick up for the little guy after 12 years of a billionaire mayor.
"Every mayor gets elected as a reaction to the previous mayor," said longtime consultant George Arzt. "People are going to want the stability of Bloomberg, but they want a change."
Already, Teamsters Local 237 Gregory Floyd is talking about running for mayor as "the labor candidate" - and says Liu's report helps push back against Bloomberg's pension argument.
"This report makes everyone aware," Floyd said. "It's an important document to help people understand that once again Wall Street gets away with something."
The city will pay a staggering $8.4 billion for worker pensions next year, up from $1.5 billion in 2002.
Bloomberg is right that it's a key factor in forcing deep budget cuts and layoffs - and Gov. Cuomo has made the same argument at the state level.
The mayor and the governor lay the blame with workers who rack up overtime in their final years as well as a system that assumes Bernard Madoff-like returns in the pension funds.
Liu's study found all those pension sweeteners caused only 44% of the increased payments since 2001.
The bigger factor - 48% of the increase - was the plunge on Wall Street that took down the value of the pension funds, forcing taxpayers to make up the difference.
Budget insiders have known as much, but Bloomberg hasn't spent time talking about it. Now that an official report from the controller's office nails it down, Liu and his rivals will have the numbers to back up their arguments.
"If the mayor thinks otherwise, then back up the rhetoric with something of substance," Liu said.
At the same time, they're blaming pensioners for their pensions, Bloomberg and Cuomo have blocked the idea of balancing the budget by taxing the rich, saying they will just move someplace with a lighter burden.
It's a balancing act. Few New Yorkers will defend the firefighters who draw disability pensions while running marathons, or the lousy teachers who coast through their classes.
But as the battle over public-sector unions in Wisconsin shows, demonizing teachers and cops and janitors and firefighters can backfire.
"It could go either way," said Bradley Tusk, who managed Bloomberg's campaign in 2009 and is watching the field closely for 2013. "A lot of it depends on economic conditions."
Arzt says the candidate who plays it right can land in the sweet spot of public opinion - and perhaps in City Hall.
"The baby boomers are facing retirement, and that's a large group of voters that don't care for uncertainty in the future," he said. "They could look at city workers and say, 'I know how that feels.' People feel more hostile toward the banks than they do toward the public unions."
We'll see how 2013 plays out, but as of right now, Controller John Liu is just about the only politician who consistently sticks up for public employees with truth and honesty rather than playing to the austerity crowd with dishonest stats and misleading memes.