EdVANTAGE Blog

The New York Times is reporting that “Local governments in New York State face an unprecedented increase in pension costs that will force them to triple their contributions to the state pension system over the next six years, according to an analysis prepared by the comptroller’s office.”

The study was circulated to Legislative and county leaders last month.  It reports on costs for the State and Local Employees Retirement System (ERS) and the Police and Fire Retirement System.  It does not cover the Teachers Retirement System.

The Times article continues, “The analysis predicts that counties will have to contribute an amount equal to nearly one-third of their civilian payrolls to the state pension system and more than 40 percent of their payrolls for police and fire departments.”

It also reports reactions from leaders of local government associations:

“It’s alarming, eye-popping and unthinkable,” said Stephen J. Acquario, executive director of the New York State Association of Counties. “To manage that liability in the face of this deep decline in government revenues is going to be a challenge,” he said. “Where is this money going to come from?”

“It is staggering,” said Peter Baynes, executive director of the New York Conference of Mayors. “The only way they’re going to deal with it is through property taxes and reductions in the work force.”

In a prior post we reported on the projected spike in ERS costs and Comptroller DiNapoli’s proposal to allow public employers to amortize large cost increases if they choose.

The Times article notes Governor Paterson and Comptroller DiNapoli “have wrestled over strategies to address the pension burdens.”  The Governor has faulted Mr. DiNapoli’s proposal for failing to mitigate pension cost increases.

Mr. DiNapoli subsequently commended Governor Paterson’s efforts to enact a reduced level of pension benefits for incoming employees, “Tier V.”

As part of a plan to avert state worker layoffs, the Governor gained support from two state employee unions for a Tier V.  That agreement, however, does not include TRS and New York State United Teachers remains opposed to Tier V.