New York City Budget Deal Passed

Unemployment woes could grow in New York City, as a budget deal passed fails to increase taxes yet cuts some 2,000 jobs. The budget cuts elderly and child's day care facilities and also cuts the funding to some literacy and and adult education programs.

NYC's budget is a whopping $63 billion. Despite the job cuts and the program elimination, pension funding and other related expenses account for a $3.6 billion or 6% increase over last year.

The job cuts are just another example of how state and local governments are struggling during these tough economic times. In a city with as much real estate and wealth as New York City, there is no reason why there should be these types of massive job cuts.

However, states and municipalities can't hardly thrive during times of massive unemployment and overall recession.

If you notice earlier I stated that pension related expenses account for an increase in budgetary spending. Did you know that pension funds are bankrupting the state of California as well? The governor and certain politicians in that state are pushing for a move to make state employee's pension plans into more affordable 401(k) type plans instead of defined benefit plans.

Perhaps that move should be across the board. After all, most companies don't offer their non-union employees defined benefit plans, which stipulate a certain amount of money that an employee will get each month once they retire. Instead, 401(k) and other defined contribution programs which stipulate how much the employer will contribute are selected.

If New York City made this type of move, perhaps important social programs wouldn't lose funding or have to cease to exist. This is a problem that should be rectified in the next few years.