Cost of Pensions Adds to Factory Town’s Troubles

[Omaha Steve]

http://www.nytimes.com/2006/09/04/nyregion/04lockport.html?n=Top%2fReference%2fTimes%20Topics%2fSubjects%2fL%2fLabor

Costly Promises
Cost of Pensions Adds to Factory Town’s Troubles

LOCKPORT, N.Y. — For two and a half years, Michael Tucker was mayor of this small city by day and an autoworker by night.

Then in May, he became one of the nearly 50,000 workers at General Motors or its former Delphi parts division to take buyouts, lured by the $33,000-a-year pension his company offered. That pension, and a smaller one he expects to collect from the state after his years as mayor, makes him a little unusual in a nation where more and more workers are not covered by such plans.

But now, as mayor of Lockport, Mr. Tucker, 49, is seeing the budget of this city north of Buffalo consumed by the kind of pension and retiree health care costs that helped push Delphi into bankruptcy. So he is preparing to do what his former employers, G.M. and Delphi, have already begun to do: ask the city’s five unions for concessions, including limiting wage increases and cutting benefits, when labor contracts expire next year.


Michael Tucker, the Lockport, N.Y., mayor, at a July meeting. In May, Mr. Tucker took a buyout from Delphi, lured by a $33,000 pension.



Cities across New York State are only now starting to grapple with the so-called legacy costs of pensions and retiree health care benefits, and the situation in Lockport — with its rising property taxes and strained budget — is emblematic of what other cities may face in the future.

Pension costs in New York City have quadrupled in the last five years, and they will soon consume 10 percent of the city’s budget. In Buffalo, the state’s second-largest city, pension costs have risen to $24 million, from $4 million, in the last five years, and the city is now overseen by a financial control board.

FULL article at link above.