Bugeja v. City of New York

Hopkins, J. Chapter 440 of Laws of 1965 empowers the Mayor of the City of New York to authorize the issuance of serial bonds in the maximum principal amount of $255,800,000 in order to provide for the city’s payment of its pension or retirement liabilities during fiscal year 1965. Chapter 440 declares that [152] “ The maximum period of probable usefulness of the objects or purposes of such bonds shall be five years.” Appellant argues that (1) chapter 440 is unconstitutional because enacted without a home rule request (H. Y. Const., art. IX, § 2); and (2) a factual issue exists in support of his claim that the bond sale will cause the respondent city to exceed its constitutional debt limitation (H. Y. Const., art. VIII, § 4, subd. [e]). About plaintiff’s second contention this court is of one mind. We find that he failed at Special Term to submit proof of any evidentiary fact which tended to contravene the prima facie validity of the net debt' margin figure contained in the City Comptroller’s verified debt statement submitted by respondents (Local Finance Law, § 109.00; CPLR 4520). However, we divide on the central issue whether chapter 440 in itself represents a constitutional exercise of legislative power. We hold that chapter 440 is constitutional with respect to its object and its means. With respect to its object, we hold that payment by Hew York City of its mandatory pension or retirement liabilities is a matter of State concern exempting chapter 440 from the home rule article of the Constitution (N. Y. Const., art. IX, § 2; cf. Adler v. Deegan, 251 N. Y. 467; Robertson v. Zimmerman, 268 N. Y. 52; New York Steam Corp. v. City of New York, 268 N. Y. 137; Gaynor v. Marohn, 268 N. Y. 417; County Securities v. Seacord, 278 N. Y. 34; see Richland, Constitutional City Home Rule in Hew York, 54 Col. L. Rev. 311 and 55 Col. L. Rev. 598). If the city’s mandatory pension or retirement obligations are not paid, the city would be unable to maintain an efficient, modern civil service system. Because civil servants deal directly with such areas of undoubted State concern as education, public health, housing and transportation, the continuance of a sound civil service system is but an integral aspect of the State’s interest in those fields. With respect to the means provided by chapter 440, the power of the city to issue evidences of indebtedness constitutes an area of State concern (Salzman v. Impelliteri, 305 N. Y. 414; see Richland, Constitutional City Home Rule in Hew York, 55 Col. L. Rev. 598, 619-620). In such an area, the Constitution contemplates enactment by the Legislature of special laws affecting the power of local governments to finance by issuance of evidences of indebtedness. (H. Y. Const., art. VIII, § 2; art. IX, § 2, subd. [c], cl. [ii]; § 2, subd. [c], par. [4]; § 3, subd. [a], par. [3].) Though we agree with our dissenting colleagues that the Constitution prohibits a city from incurring debts payable in [153] the future for objects or purposes of “ purely transient usefulness ” (Cherey v. City of Long Beach, 282 N. Y. 382, 390), we cannot hold that payments by the city of current pension or retirement liabilities involve payments of ‘1 purely transient usefulness.” Municipal default in the payment of pension or retirement liabilities would undoubtedly jeopardize the continuing employment, and impair the future recruitment, of civil servants. It would signal the collapse of the city’s civil service system, or at least it is within the judgment of the Legislature to foresee that result. Nor do we find any rational compulsion to hold that the city’s mandatory pension or retirement liabilities must first be reduced to innumerable judgments before the Legislature may constitutionally enact a special law to enable the city to finance those fixed liabilities (Cherey v. City of Long Beach, supra, p. 389). Finally, unlike our dissenting colleagues, we neither detect in chapter 440 a clear usurpation by the Legislature of prohibited power (Matter of Ricker v. Village of Hempstead, 290 N. Y. 1, mot. for rearg. den. 290 N. Y. 862); nor do we find any warrant to go beyond the face of the statute in determining its constitutionality. Accordingly, the order and judgment should be affirmed, without costs.