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Upstate City Buffaloed By Retiree Health Costs

April 27, 2004
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Buffalo, New York passed a dubious milestone this month. For the first time in its history it will spend more on benefits for retired city workers than it spends on its active workforce.

This trend is expected to continue, and starting in July will result in $28.7 million in tax funds being disbursed per year to retirees versus $25.5 to workers actually still working.

The condition is aggravated by recent cutbacks in the city workforce.  Ten years ago nearly 3,300 people worked for the city.  The current total is 2,814. As of this week 2771 retired workers were receiving benefits. 

“This is a turning point for us,” Human Resources Commissioner Leonard Matarese said. “It has never happened before, and it clearly demonstrates why we’re facing serious financial problems.

“Frankly,” Matarese added, “it’s not dissimilar to the situations many private companies faced that have since gone out of business, including steel companies we’re all familiar with.”

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