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New Research Outlines Huge Costs of Ballooning City Municipal Workforce

New York City is now in its 109th month of economic recovery since the 2008 recession – the longest period of growth since the Second World War. That growth has powered tremendous gains in our city that are currently benefiting all New Yorkers. However, policymakers must be careful to avoid handicapping the city during the inevitable future periods of economic slowdown. An important new report by the Citizens Budget Commission (CBC) outlines why we should prepare for a downturn in good economic times.

That report found that the city’s municipal workforce has grown by more than 34,000 employees since fiscal year 2014, which not only puts immense pressure on the city budget in the short term but also commits New York to potential long-term liabilities.

New positions have been added primarily at the Department of Education (DOE) and the uniformed agencies. The growth has been universal across mayoral agencies and substantial in certain smaller agencies.

The figures in the report are staggering. The CBC estimates compensation costs for new hires at the DOE will average $104,882 per employee, $91,546 per uniformed employee and $90,197 per civilian employee. Separately, the city must spend an additional $180.9 million for accrued pension liabilities – and that’s just for fiscal year 2019. Long-term liabilities, such as retiree health benefits (OPEB), in conjunction with pensions is set to cost over $520 million in the long term. That is on top of a system where the unfunded pension and OPEB liabilities already totaled $56.2 billion and $88.4 billion, respectively, in fiscal year 2017.

For now, the costs of the headcount increase are supported by a strong local economy, but whether the City will be able to sufficiently decrease its staff in the event of an economic downturn is a serious concern.

Meanwhile, the report does not mention three agencies that are sure to have an impact on the city budget in the years ahead. The well-publicized budget woes of the New York City Housing Authority, New York City Health and Hospitals Corporation, and Metropolitan Transportation Authority are each looming large over the city’s fiscal future.

The CBC recommends three steps to address the growth of the municipal workforce:

  1. Change the assumption that all vacant positions will eventually be filled – remove those vacant positions from an agency’s budget instead.
  2. Put the burden on agencies to explain why new responsibilities cannot be executed with its existing workforce.
  3. Begin a review of positions to find inefficiencies and obsolete responsibilities.

We think New Yorkers deserve to see these common-sense steps implemented, and the good news is that the Office of Management and Budget has already begun several of them by instituting a hiring freeze and removing vacant positions from the FY19 budget.

This is a smart step forward – because if we prepare for the bad times ahead, we will only know good times.

In Other REBNY News

Get your broker credentials or renew your real estate license this summer for less with REBNY’s online courses. By signing up NOW through July 31st, you will receive 30% off the Online Broker Qualifying Course and Continuing Education License Renewal Package. We are also offering our popular Florida Broker Licensing Course, an opportunity to become a Certified Negotiation Expert (kicking off on July 24th), and an opportunity to meet your Fair Housing and Law of Agency Requirements on August 8th. Review and register for upcoming licensing and renewal courses, both online and in-person, on our website.

This summer, REBNY is collaborating with the Coalition for the Homeless, the nation’s largest advocacy and direct service organization helping homeless men, women, and children. We invite REBNY members and industry organizations to join our 10th Annual Summer Donation Drive by donating new t-shirts (large sizes preferred), socks, and jeans. Donations may be dropped off at REBNY’s lower level mailroom, Monday through Friday, 9:00 a.m. to 2:00 p.m., through Friday, September 7th. To make a monetary donation, please email

On Monday, July 30th at the North Shore Country Club, enjoy a summer day of golf and tennis while networking with NYC real estate professionals at our Annual Golf and Tennis Outing. Take advantage of this opportunity to advertise your company, sponsor the event, and provide promotional items or raffle donations. Register online and email for sponsorship opportunities.

REBNY Residential Brokerage Division Members: Review your sales and rental transactions for the Residential Brokerage Division’s Deal of the Year Contest, and nominate your outstanding colleagues for their professional achievements. Award submissions are due on Friday, September 14th by 5:00 p.m. All awards will be presented at the 30th Annual Residential Brokerage Deal of the Year Charity and Awards Gala on Tuesday, October 30th at the Plaza Hotel. Buy your tickets now. Email to purchase a table of 10 at a discounted rate and/or to learn about gala sponsorship opportunities. Event proceeds support the REBNY Member in Need Fund, which provides grants to residential agents who have experienced unexpected illness or financial hardship.



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