By GREGORY N. HEIRES

As the Bloomberg administration tries to slash the hard-won benefits of municipal employees, a Wall Street front group is gleefully providing the daggers to do the job.

The Citizens Budget Commission — whose trustees come from some of the most powerful financial companies in the world — has waged a protracted war against local government spending and public employees since the Great Depression in the 1930s.

Over the years, it has pressed to cut public services, erode city workers’ benefits and undermine the municipal unions. The commission has carried out its conservative agenda while cynically passing itself off as a “nonpartisan, nonprofit civic organization devoted to influencing constructive change in the finances and services of New York City.” Most recently, the commission has engaged in a disinformation campaign to support Mayor Michael R. Bloomberg’s effort to win $600 million in benefit givebacks from municipal unions.

“FAT CITY” screamed the front page of the anti-union New York Post on May 20. Inside, the tabloid rag published an article, “Gold Fringe: Benefits surge $hocks Apple.” The story used a misleading report from the CBC to attack the benefits package of municipal employees. A day later, the Post ran a column, “Payroll Bloat,” by Commission President Diana Fortuna.

The CBC played into the administration’s erroneous contention that as the city grapples with its deficit, a pampered unionized municipal work force hasn’t sacrificed at all. The bogus charge ignores the facts: Corporations have largely escaped tax increases while ordinary residents — including DC 37 members — struggle with higher property taxes, soaring rents and transportation fare hikes.

“The Citizens Budget Commission purports to be a good government group, but its real agenda is to gut government services,” DC 37 Executive Director Lillian Roberts said.

Lying with statistics
Michael Musuraca, an assistant director in the DC 37 Research and Negotiations Dept., highlighted a few ways in which the CBC misrepresents the salaries and benefits of municipal workers:

• The study lumps together managers and non-management staff to calculate the average cost ($82,722) of municipal workers. This fuels the myth that ordinary workers are overcompensated, giving the Bloomberg administration political ammunition to extract concessions from unions.
• Another problem is that the cbc study uses average costs, which seriously overstate the true compensation of typical workers. “In their heart of hearts, even the Citizens Budget Commission knows that averages distort,” said Mr. Musuraca.
  
  The study says, for instance, that civilian workers earn an average of $46,092. But the median salary — the point where half earn less and half earn more — is significantly lower. Using the median would be more accurate, Mr. Musuraca said. As with the average salary of all city employees, the figure on civilian workers also gives a distorted picture of the permanent workforce by considering managers and union workers together.
• The report distorts the pension picture. It uses 2000 — the year public employees won long overdue pension improvements through lobbying — as the base year to claim that benefits are skyrocketing.

By starting in 2000, CBC concealed the steady decline in city pension costs since the 1970s and the free ride the city got during the boom years from 1995-2000. The CBC research also ignored the 2000 actuarial “re-starter” that let the Giuliani administration cut pension contributions and use the $800 million in savings to bolster the budget.

An even greater factor in driving up pension costs, conveniently downplayed by the CBC, has been the bursting of the stock market bubble and the corporate corruption of the commission’s friends in the business and financial community. Particularly disturbing is the CBC’s recommendation that the city end the current “defined benefit” pensions and adopt a “defined contribution” system like a 401(k). Instead of a guaranteed retirement income, this would transfer investment decisions, risk and a greater share of the retirement costs to employees.

The self-serving CBC report doesn’t mention that replacing traditional pension plans with 401(k) plans would provide a windfall for the financial titans that back the group. Its trustees include representatives of J.P. Morgan Securities, Salomon Smith Barney, Lehman Brothers and Warburg Pincus & Co.