One way for NYC to get out of $252.5 billion debt: stop most construction projects

Think tank Citizen's Budget Commission also recommended slashing retiree benefits
September 19, 2018 08:30AM

Stephen A. Schwarzman Building at 476 5th Avenue (Credit: Open House New York)

New York City must cut down on capital projects and employee benefits to emerge from its $252 billion debt hole, according to a new controversial report.

Citizen’s Budget Commission, a fiscally conservative think tank, found that the city has been unable to capitalize on a boom in tax revenue and a strong economy to emerge from its debt, leaving it exposed in the event of a future downturn in the economy, according to Crain’s.

The CBC’s report suggested prioritizing capital projects, such as school construction and park improvements, which makes up for $107.8 billion of debt in the form of outstanding bonds. It also found a large chunk of the debt — $144 billion — is made up of retiree benefits, mostly for health needs and pension liabilities.

The study recommends these be reduced by forcing retirees to take on their own premium costs, and to discontinue reimbursements for Medicare Part B expenses.

“The city’s liability for retiree health benefits is especially concerning,” said Citizens Budget Commission Vice President Maria Doulis. “The city continues to offer retiree health benefits that are much more generous, and costly, than those offered by other public employers.” [Crain’s] — David Jeans