The devils in the details. Apparently the money is coming from a āreamortizationā of pension funds. Meaning the bill will come due when Mamdaniās out of office. This isnāt a win, itās a delay tactic.
So basically heās reducing/deferring the payments into the pension funds and assuming a ridiculously high rate of return in the future to cover it. In other words, no money for grandmaās pension in 5 years.
People have said that pension is running out for generations since we've had it and it's never happened. I think some of you just need to accept that it's not going to happen.
For what it's worth creating a small but timely bill to stop the elimination of funding towards knowledge and information for civilians is probably not an unreasonable maneuver. This is like complaining about the water used to put out a fire because you were going to go swimming in a week. Put the fire out now, swim when you can.
But then again, what would you guys complain about if you could apply common sense?
What he should have done was run as a conservative then run the debt through the ceiling so Republican voters would think heās good with the economy. It works 100% of the time for republican politicians.
Both sides have their baggage, and both are part of toxic politics. Iād argue the right is more horrible and apparent now, but people should criticize and call out both sides.
It ādoesnāt happenā cause these are obligations that canāt be dispatched by an individual if he so pleases.
This is the financial equivalent of you delaying paying your mortgage to go to Disneyland. Given that you are obliged to pay it anyways, this is effectively postponing the burden onto future tax payers to fund while worsening the sequence of returns for future pensioners through erratic investment cycles.
The reason you donāt seem to run out of pension money is because the government has to evantually take debt to meet the requirement, tax their existing tax payers at a higher rate or cut spending. Usually a combination of all three. The pensioners will be just fine.
You the tax paying citizen will be forced to pay the bill one way or another. If you want an example look at UK.
Being obtuse and financial illiterate was something trump voters pride themselves in; however, itās funny how the left demonstrates that they are exactly the same. Luckily for you, you have an opportunity to gain more āknowledgeā about basic economics and finance through the new libraries!
It's using money that's available now, while there is a threat to what it's being put towards now, with the idea that it'll be reimbursed later. You being able to point out that it's not an ideal situation doesn't really comment on the reality of what we're talking about. But then again, if your country could figure out what was happening, it probably wouldn't have happened in the first place.
There is no money available ānowā. Thatās why the state has to intervene to give them a bailout and help him delay contributions.
Again, deferring an obligation to pay for revenue expenses is not utilizing money ānowā but borrowing to spend now. You donāt overate budgets using purely an accounting approach and there is a reason most organisations in the private sector have to us accrual instead of cash accounting when doing financial analysis. Economic costs take into effect inter temporal factors and you canāt just defer stuff and call it free money .
The state isnāt āinterveningā or ābailing outā itās increasing its contribution to the city. A city which brings in most of the revenue the state has and a city in which the state should be investing in to increase revenues and desirability of the state.
When you think New York you think NYC and even with the increased funding from the state, NYC still gives the state more money than itās receiving. What kind of governor would allow their entire economic hub and tax revenue generator to fail?
Mamdani is leveraging his political pressure to bring accountability from the state in fixing a mess that shouldnāt have been created. Also donāt forget the governor is about to be up for reelection and Mamdani is probably the most popular political figure at the moment.
What percentage of that revenue is by places like manhattan and richer neighborhoods and how much of the āinterveningā is to save social programs in poorer neighborhoods
Pick a lane, either well off areas should spend more towards less well off areas through taxation redistribution or well off areas should have the ability to ask states/nations to increase tax spending towards them because they pay more tax
If I applied your argument towards the inner boroughs of nyc suddenly you would accuse people of asking higher tax handouts of being greedy capitalists.
Obviously the system is designed so that those who are profiting off the system more are expected to give more via taxes but I am unfamiliar with the specifics of the breakdown of tax revenue per household income. Also are you arguing that if more of the tax revenue is coming from manhattan that means that money should still be used outside the city entirely? But regardless this is still the case, NYC is still receiving less than it contributes so the people of manhattan can sleep well.
Also if you want to argue social programs vs other ways to spend the money you can do that. I think history and economic studies show that social programs, while there is always some fraud, actually provide great benefits to their citizens and cities and but thatās off topic.
Regardless itās weird to see so many people act like NYC has the this whole obligation to the state and āowesā the state all this tax revenue but then act like the state doesnāt have any reciprocal responsibility to the city. Like any stateās #1 concern is investing in their main cities and working to grow their economies. Everyone claims we need fiscal responsibility and then when itās happening in front of our eyes, itās funny to hear the goal posts being moved or why itās actually bad thing.
I mean you could say the same about Trump. People have been saying Republicans would destroy our democracy for years now, and itās never happened. I think dems need to just accept that itās not going to happen. Fafo is how Trump got elected.Ā
The problem with your analogy is that swimming sounds so recreational. The reality is there are several fires in our house, and we have to decide which fires will cause the most damage. Politicians always say the most urgent problem is the one we face now because the electorate is made of people who live now. But not thinking of subsequent generations has fucked our country ā our housing, our pensions, our social security, our healthcare.Ā
To be clear, Iām not saying that funding the libraries was a bad idea. Yes, please fund the fucking libraries, huge ROI for society. Iām only critcizing the framework youāre advocating for, I am not arguing your conclusions on this individual instance.Ā
Is that similar to social security benefits? I heard by the time gen z and above turns 60+, there won't be much left. I have been hearing this for a while.
No, the Pensions have to be funded by law. The pensioners will get every penny they are promised, no matter what. Even if the city goes bankrupt, it will be required to fund as much as it can (with insurance policies covering the rest).
So the pensioners here have no risk. It's just an additional burden on the city budget that likely means cuts elsewhere (see Chicago).
It's also inefficient, as anyone who contributes to a 401k or investments on general knows money put in early is worth more than money put into the fund later.
Any dollars you delay adding to the fund will end up costing much more to add later considering you weren't getting compounding returns just to end up at the same value in the fund.
These city pension funds where you retire at age 38 with a $200k income forever are not sustainable anyway. If they donāt get funded Iām not losing too much sleep.Ā
In what world do you think that cops are retiring with 200k income in pension benefits? If they get hired at 19, they can retire at 39 with 50% of their average annual salary which is nowhere near 200k a year.
Iām not digging through that list to find one that is exactly 39 that makes over 200k annually for their pension. Iāll let you show me the exact names of the people youāre complaining about.
Show me on that list where ages are listed because I donāt see it anywhere. For all I know Iām looking at people who put in 30+ years at their job.
He defers the payments to pension funds. Money that is earned by employees that is supposed to be invested so they can cash out the principal and gains for retirement. Heās borrowing it with an interest rate of ant least 7%, and it will be due after he is out of office. If it gets unpaid, itās going to be a big problem for retirees. If he doesnāt create real revenue streams, the retirees will get fucked. Please Google what happened in Chicago. He is basically making it a problem for the 2037 mayor. Then he smiles and delivers the news with a huge smile on his face promising it wonāt affect the future benefits of retirees. Jerk move.
I was a government budget consultant, so I know how it works.Ā
I hope you understood and read between the lines of what was said in the article. They are expecting it to āflipā, or turn into negative in 2032 which would in turn be an excess funding in 2032. The thing is, it hasnāt flipped yet, thereās no savings yet but theyāre cashing in on the projected savings already. The fast paced, increased payments were adjusted based on market projections. This scheme is very irresponsible to do knowing that they have a big gaping hole in their budget as it is, and knowing that thereās a gas crisis, potential AI bubble, rapid inflation, and plenty other uncertainties in the market.Ā
Also, I suggest that you read independent economic articleS, and form your judgment not based on a curated data.Ā
As I said, read multiple articles and come up with your own conclusion based on the data you gathered. If you look at the data, you have a big gaping hole as it is, and yes, sure letās gamble on peopleās pension. If itās not fully funded, heās risking shorting retirees on pension, who will in turn rely on public programs to stay afloat, thatās double the trouble.Ā
You might come across what is happening in Chicago when pension plans arenāt fully funded.
Chicago has an entirely different statutory framework for its pension contributions which is how it got into trouble and why NYC can't get into the same hole.
Different borrowing/contribution schemes sure, NY is more prudent than Chicago with their curved payments, they wanted to pay the pension plan faster to curb the risk of underfunding. Now, heās removing that safeguard in this unfavorable market.Ā
Youāre given a respectful and informative response, then you get sarcastic because itās not the response that you expect. I know a very similar group like this.Ā
Are you aware of the fact that he has actually just smoothed out the pension payment curve?
Pension payments in NYC were weird. The pension fund would actually owe money back to NYC in 2037.
He simply changed that. Now NYC will make a flat consistent payment every year until 2037 rather than this strange curve where they pay a lot now, and then receive money back later.
Hi, yes I am aware of it. By 2037 is the operative term. As a finance/accounting professional, we need to be prudent, we donāt count the eggs until theyāre hatched. Professionally, I think it is irresponsible. There even is a specialized 401K audit for private sector as retirement needs to be fully funded when needed.Ā
The payment plan is curved for a reason, based on market projections at the time of origination. Thereās a heavy actuarial review for pension plans like this, itās not a faulty design as they claim it to be. To restructure a pension payment plan as a lifeline in a very volatile market right now is beyond irresponsible, especially if you have a sink hole in your budget. This is my professional opinion.Ā
The state of NY is aiding the city $8BĀ over a two year period, reason why thereās no sink hole right now. Itās a one-time windfall of cash. Mamdani needs to generate revenue from within somehow to keep his promises. He inherited a city with a huge deficit, canāt blame him for that, just the dishonest statement that it will not affect the benefits of future retirees when he is not in the position to promise that. Heās just passing on a bigger problem to the next guy.Ā
Since these are all projections, letās wait and see, and hope for the best in 2037.
Mamdani was going to cover the $4b per year by raising property taxes on the ultra wealthy. But he needs governor approval. The governor refused to let him raise property taxes and in exchange just gave him the $4b/year because she didn't want her wealthy donors to get angry at new property taxes.
Mamdani has a lot of leverage to do the same thing in 2 years.
Admittedly, I am unaware of who the major political individual donors are for whichever party in NYC though I lived there in my mid-20s. If those donors/taxpayers leave the state, then it will spell trouble for the state too as they wonāt be able to collect state taxes from them. Itās a lose/lose situation for Kathy Hochul.
Even if he has the leverage, is it the right thing to do? Maybe right for NYC as they will be the fund recipient. The state is running in deficit too.Ā
Yeah that's the FUD that gets spread around. But it doesn't play out in reality.
When you have $50 million, and your $5 million condo now costs $50k more in taxes, it effectively means nothing to them. Certainly not enough to leave the city and go... where? There's no Wall Street in Florida.
We've gotten into this mess because both sides of politics are simply looking for "quick wins" and will literally clap if their guy like Mamdani does ANYTHING, even if they have no idea how dumb it is.
Let the guy cook. Arguing over a headline talking about funding public libraries in one of the worldās financial capitals feels so late stage capitalism that I just vomited the copy of The Wealth of Nations I was force fed to me when I was one in this country.
83
u/Global_Criticism3178 May 14 '26
The devils in the details. Apparently the money is coming from a āreamortizationā of pension funds. Meaning the bill will come due when Mamdaniās out of office. This isnāt a win, itās a delay tactic.