Gov. Paterson told radio host John Gambling this morning that although arbitrators in the MTA-TWU case “probably made the correct ruling technically” to give transit workers 11.3 percent raises over three years because the rest of the city’s labor unions got similarly big raises, ”in reality, we don’t have the money,” the Daily News reports. (more…)

When this year’s state budget was first enacted back in April, the budget gap for fiscal 2010-11 was projected at $2.17 billion.  The First Quarterly Financial Plan Update in July more than doubled this estimate, to $4.62 billion.   And today’s Mid-Year Update says next year’s gap has grown by another 47 percent—to $6.8 billion.

The governor’s proposed Deficit Reduction Plan (DRP) for the current fiscal year would yield only $434 million in recurring savings, today’s report indicates.  Thus, under the best-case scenario, the state’s budget hole for the year starting next April 1 will be at least $6.36 billion, or more than three times larger than projected when this year’s budget was adopted.

The “out years” of the financial plan are also uglier, with the 2011-12 and 2012-13 gaps each growing by about $1 billion—to $14.8 billion and $19.25 billion respectively—assuming no DRP is enacted this year.   If the governor’s current deficit-closing plan is accepted, those gaps won’t be much different: $14.32 billion in 2011-12 and $19.06 billion in 2012-13.

Sooner or later, the Governor and the Legislature have to get around to making some actual spending reductions.

Both papers reported this morning that “independent” arbitrator John Zuccotti, who was supposed to represent the public in the Metropolitan Transportation Authority’s contract with the Transport Workers Union, planned to donate his $116,000 fee — at $900 an hour, it can add up fast if you are, you know, working hard — to a TWU fund. The News reports that the MTA knew of this planned donation from the “outset.” The MTA and the TWU split the cost of Zuccotti’s fee.

This looks an awfully lot like the MTA paid Zuccotti an overinflated amount knowing that it would go to the TWU. (more…)

Governor Paterson has now all but formally abandoned the comprehensive school property tax cap he was pushing a year ago.  Instead, he has tucked a hopelessly byzantine variation of the cap into a proposed new property tax “circuit breaker” that would kick in when (or if) the state ever has some extra money sitting around again.

So, in place of a permanent, immediately binding limit on the annual growth in all school property taxes outside New York City—a limit that local school voters could nonetheless (a) be asked by their school boards to exceed, or (b) seek to reduce at their own initiative— Paterson is offering to redistribute currently non-existent state funds on an irregular basis at some unknowable time in the future.

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The number of retired New York government employees with six-figure pensions is apparently growing at a 20 percent annual rate.  This complete list of pension recipients, newly posted by the Journal News of the lower Hudson Valley, lists 1,081 individuals with pensions of $100,000 or more.  That’s up from a reported 899 a year ago.

To be sure, in the public pension sweepstakes, New York’s state pension fund is lagging behind California’s giant CalPERS system, which has nearly 5,000 government retirees with pensions over $100,000.  Then again, the state figures at the Journal News site don’t include teachers or New York City employees.

New York’s public pensions are exempt from state income tax and federal payroll tax, and are supplemented in virtually all cases by low-cost health insurance policies.

Today’s “DRP Did You Know” from Governor Paterson’s office says the governor’s proposed pension changes for new newly hired employees will save $60 billion over 30 years.  But here’s the missing perspective: for state government, the modest changes proposed by Paterson would ultimately—i.e., over a decade from now—represent a roughly 23 percent annual reduction* in a pension bill that is poised to increase by 155 percent in just the next three years.

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If Gov. Paterson cuts funding to the state-run Metropolitan Transportation Authority as expected, the MTA may make up for the cut by slashing payments to its pension fund, the Bond Buyer reports (you need a subscription).

The MTA would use the temporary savings to repay some of its short-term debt. It incurred this debt earlier this year in anticipation of bailout money (shockingly, the MTA did this borrowing even though we told it not to). (more…)

Wendell Cox has a new piece at newgeography on how practically to open up transit monopolies. One part, which discusses how London runs its public-bus service, is relevant to New York:

Transport for London … is competitively bid. Between 1985 and 2000, the costs per mile of service declined more than one-half, adjusted for inflation [italics Cox's]. Much the same has occurred in Socialist Scandinavia. All Copenhagen bus service is competitively bid. Stockholm not only bid its bus service, but also saved money by competitively bidding its metro (subway) system.

In New York, Metropolitan Transportation Authority chief Jay Walder just so happens to come from TfL. In fact, Walder may sign a two-year, no-bid contract with TfL to advise the MTA on stuff like swipe-card technology. Swipe-card technology is proven worldwide, so it’s unclear what special value TfL could offer here.

Instead, maybe Walder should ask TfL to advise New York pols on the benefits of competitively contracted bus service, with the public sector doing its job — designing a good contract structure and enforcing bus-only lanes — and the private sector doing its new job, providing good service at a cost-effective price.

At a Citizens Budget Commission breakfast earlier this week, Walder spent some time telling the attendees how dismally London’s effort to privatize its Tube failed. Right — but Walder didn’t mention that the bus side of things has succeeded.

Governor Paterson’s proposed budget deficit reduction plan includes a $300 million raid on the coffers of the Battery Park City Authority (BPCA), which would be required to issue new bonds and send the proceeds to Albany.   But BPCA board member Charles Urstadt and former authority spokesman Avrum Hyman have a better idea, which they describe on the op-ed page of today’s New York Times:

As two of the officials who helped carry out Gov. Nelson A. Rockefeller’s 1967 mandate to build a Lower Manhattan community on landfill in the Hudson River, and considering the unquestionable success of what he proposed evident in today’s vibrant Battery Park City, we believe that New York City, which has a little-remembered option to buy the entire property for $1, should hand over that dollar bill. Let’s finally make Battery Park City, with its 10,000 or so residents and 92 acres of businesses, housing and beautifully maintained green spaces, a part of the city to which it really belongs.

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Democratic mayoral challenger Bill Thompson said something good yesterday: “Can you afford 4 percent [raises for teachers] in the current environment? Probably not,” he told the Daily News editorial board.

Thompson’s right. The education payroll, not including benefits, is already $10.1 billion, up from $7.1 billion in fiscal year 2003, Mayor Bloomberg’s first budget. This 42 percent increase outpaces inflation by 22 percentage points. (more…)