Piles of garbage littered the curb on 48th Street during a 1975 strike by private garbage companies during the city’s financial crisis. Associated Press

In 1978, New York promised that its pensions would be under control in 40 years.

25 % Pension contributions as a share of New York City taxes 20 17.2% 15 16.3% 10 5 0 1978 ’90 ’00 ’10 2017 By 2000, New York City was poised to close its pension hole in just 22 years — but that year lawmakers enacted the biggest in a series of pension benefit increases. 25 % Pension contributions as a share of New York City taxes 20 17.2% 15 16.3% 10 By 2000, New York City was poised to close its pension hole in just 22 years — but that year lawmakers enacted the biggest in a series of pension benefit increases. 5 0 1978 ’90 ’00 ’10 2017 25 % Pension contributions as a share of New York City taxes 20 17.2% 15 16.3% 10 By 2000, New York City was poised to close its pension hole in just 22 years — but that year lawmakers enacted the biggest in a series of pension benefit increases. 5 0 1978 ’90 ’00 ’10 2017 Source: Manhattan Institute | By The New York Times

Issuing bonds produced $3.5 billion for the city. But by 1978, the city needed more cash and still could not borrow. So officials went to Washington, asking to extend the deal and add a federal guarantee. Federal authorities were shocked. Even without any junk bonds, New York City’s pension fund was way short, with just 50 cents for every dollar it had to pay city retirees. But the city’s budget director, James R. Brigham, reassured them, saying the city would close the pension shortfall in 40 years. Almost 40 years later, the Manhattan Institute has taken a look at how things turned out. In some ways, the pension system is remarkably unchanged. For one thing, the big hole is still there.

What happened?

About five years into Mr. Brigham’s 40-year schedule, the stock market took off, creating a false sense of security. The gains made pension funds everywhere look good, especially in New York. As a financial center, the city was packed with high earners whose incomes and bonuses could be taxed. As tax revenues rose, the city’s yearly contributions to the pension system fell initially as a percentage of city spending.

But contributions have grown to a higher share of spending than in 1978.

25 % Pension contributions as a share of New York City spending 20 15 11.0% 10 7.7% 5 0 1978 ’90 ’00 ’10 2017 25 % Pension contributions as a share of New York City spending 20 15 11.0% 10 7.7% 5 0 1978 ’90 ’00 ’10 2017 25 % Pension contributions as a share of New York City spending 20 15 11.0% 10 7.7% 5 0 1978 ’90 ’00 ’10 2017 Source: Manhattan Institute | By The New York Times

That created the illusion that the city could afford more generous pensions.

Then came the dot-com crash, wiping away the gains that were supposed to pay for the pension increase. New York was back in the hole and, once again, had to ramp up contributions to the pension system.

Even adjusted for inflation, contributions have gone up sharply, but the shortfall remains.

$10 billion New York City pension contributions 8 6 Adjusted for inflation 4 2 0 1978 ’90 ’00 ’10 2017 $10 billion New York City pension contributions 8 6 4 ADJUSTED FOR INFLATION 2 PROJECT- IONS NOMINAL FIGURES 0 1978 ’85 ’90 ’95 ’00 ’05 ’10 2017 ’21 $10 billion New York City pension contributions 8 6 4 ADJUSTED FOR INFLATION 2 PROJECT- IONS NOMINAL FIGURES 0 1978 ’85 ’90 ’95 ’00 ’05 ’10 2017 ’21 Source: Manhattan Institute | By The New York Times

The size of the pension shortfall today is in dispute, because of profound disagreements among actuaries over how to value pensions. The city’s chief actuary, Sherry Chan, used the traditional actuarial approach to report a shortfall of $65 billion last year.

The Manhattan Institute, a research center focusing on urban affairs and domestic policy, prefers market values, which put the shortfall at about $142 billion, more than twice the city’s shortfall estimate.

While the actuaries argue, the rest of the world can look at yearly cash outlays, which are undisputed. The city’s contributions more than quintupled while Michael Bloomberg was mayor and have continued to rise under Mayor Bill de Blasio. As a share of the budget, they have long since passed fiscal-crisis levels.

The city now says it will take another 15 years to close the shortfall. So much for Mr. Brigham’s 40 years; it will have taken 55 years if the city is correct and if the markets cooperate.