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Cuomo's Last Minute Pension Proposal - Will He Get His Way?

Thursday, June 09, 2011

Governor Cuomo's proposal to reign in dramatically rising pension costs by creating a new "tier" for new public union hires is coming late in the legislative game. With only six session days left and a lot of outstanding legislative priorities (rent regulation laws, property tax cap, same-sex marriage) both Democratic and Republican legislators said it would be difficult to get the bill enacted before June 20.

Cuomo's office says the bill would save $93 billion over the next 30 years--a figure that does not include New York City. (The bill includes a separate proposal for New York City and the uniformed services that was requested by Mayor Bloomberg.) Major components include raising the retirement age from 62 to 65 for new state workers and from 57 to 65 for new teachers, and would require those state employees to contribute six percent of their salaries to their pensions--up from three percent now.

Public employee unions immediately reacted with vehemence against the proposal.

"He's saying to the lowest paid people in public employment that you will now pay twice as much as you're currently contributing, you'll have to work longer, and you'll get less benefit," said Civil Service Employees Association spokesman Stephen Madarasz, in regards to the creation of a sixth payment tier for public workers. "We see it as a gratuitous attack on working people," he said.

Madarasz acknowledged the need for some changes to the pension system, but alleged that the Governor was approaching the issue with a broad brush instead of specifically tackling areas that need to be addressed, like double dipping or pension padding--the practice of stacking up on overtime in the final year of employment. Gov. Cuomo's proposal would in fact exclude overtime from pension calculations.

Public employee unions have come under attack from a number of governors--mostly Republicans--across the country. Cuomo called the current pension state of affairs in New York "unsustainable." Annual pension costs have ballooned over the last decade from $368 million to $6.6 billion outside New York City, and from $1.1 billion to $8.4 billion in the city, according to the Governor's office.

Assembly Speaker Sheldon Silver declined to comment, and Democratic Assembly Majority Leader Ronald Canestrari said the Democratic conference hasn't discussed the bill.

"It certainly not unexpected, the Governor has talked about this for awhile, but it is a very controversial proposal, particularly for those of us who live in the Capital district here in Albany where we have a lot of state workers and those who want to be state workers," Canestrari noted.

The Republican Senator Majority Leader, Dean Skelos, said he recognizes the need to address rising pension costs and is reviewing the bill.

Though only ten days away from the end of the legislative session, Canestari said the Governor is not to be underestimated. "The clock is ticking but Governor Cuomo has a way of getting things that he wants."

Cuomo is certainly pushing an aggressive legislative agenda. On the same day he released his pension reform proposal Cuomo also announced he was moving forward with plans to lay off 9,800 state workers unless the major public worker unions agree to $450 million in concessions in their new contracts. The New York State Public Employees Federation (PEF) said they proposed a counter offer weeks ago but have not heard back from the Governor's office. As for the pension reform proposal, Spokeswoman Darcy Wells said PEF opposes it, but they doubted it would come to pass this session.

"We're mainly focused on making sure that 10,000 people won't be out of a job in the next month," she said.

 If the legislature does not take up the bill, the Governor could call lawmakers back to Albany this year or wait until next January to take up debate in earnest.

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Comments [1]

Polo

Why not resolve this issue for good by moving new hires to a 401K system? As it stands this is still kicking the can down the road.

Jun. 10 2011 10:23 PM

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