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Pension Reform

The Empire

Cuomo honored amid pension battle

Tuesday, February 28, 2012

The Governor receiving an award last year. (Huffington Post/AOL / Billy Farrell Agency)

Even as Governor Andrew Cuomo accepts an award tonight for his austerity program in Albany, he’s in the middle of a battle over his proposal to overhaul the state’s multi-billion dollar pension fund. On one side it’s been the Governor and a slew of business-backed groups, local elected officials—including Mayor Michael Bloomberg—and Republican state legislators. On the other, Cuomo has found a foil in Comptroller Thomas DiNapoli, who has been one of the most vocal defenders of keeping the public pension system public, backed by the unions and, to a lesser public degree, Assembly Speaker Sheldon Silver.

The Pierre Hotel—a classy, if a bit musty hotel at the eastern corner of Central Park in Manhattan—will host the Citizens Budget Commission’s 80th Annual Awards dinner tonight. The non-profit think tank will use the opportunity to honor a man who has, over the past year, done more to advance its agenda than anyone else in New York: Governor Andrew Cuomo.

“He has articulated and pressed for many of the key items on the CBC agenda,” said CBC’s president Carol Kellermann. “He is in many ways a spokesperson for fiscal responsibility, and the wise and prudent expenditure of tax-payer funds. He had an on-time budget last year, with no tax increases, and very few ‘one-shots’—all very important items on the CBC agenda.

She went on to note that, this year, he’s included even more of the group’s agenda items in his budget, including pension reform, which has been “something that CBC was—until the stock market crash—virtually alone in advocating for.”

“When it was time to decide who would win our award this year, there really was unanimity among the trustees on the executive committee that he was the logical choice,” Kellerman said.

Cuomo accepts the award amidst what has proven to be arguably the most contentious issue he’s taken on so far with pension reform. Cuomo initially wanted to semi-privatize the pension system by introducing the possibility for new employees to put their retirement savings in 401(k)-type accounts, though, lately, he appears to be softening on the idea.

However, the Governor has keeping the pension fund as-is “could literally bankrupt the State of New York,” and that “[t]here must be pension reform in the budget.” He still supports changing the benefits future employees will receive out of the pension, as well as the amount they contribute.

The Comptroller has responded to the pressure for change in the pension system by pointing to both the benefits of the system—its better-than-most-states level of funding, the safety in pooled capital for its investors, the ability to use the fund’s investments to demand change from companies—as well as the fact the system is still rebounding from the worst recession since the Great Depression, and mostly intact. He’s called using the current fiscal state of things to justify a long-term critical overhaul of the pension system “not the smartest move.

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The Empire

Cuomo reworks pitch for new pension tier

Monday, February 27, 2012

By Karen DeWitt, New York State Public Radio Capital Bureau Chief

  (Courtesy of the Governor's office.)

Governor Andrew Cuomo took a step back from his proposal to give new state workers the option of defined contribution 401(k) plan Monday, but the governor says without pension reform, local governments in New York could end up “bankrupt”.

Cuomo told a receptive audience of mayors from around the state that New York’s current pension system is unsustainable and must be changed for future hires.

“If we do not do this, we could literally bankrupt the state of New york,” Cuomo said.

The governor, in his budget proposal, wants a new benefit tier that offers a reduced public pension or a 401k style plan, but he says he’s flexible like “Gumby” on that.

“I’m not saying that ‘this is my plan, you know, it’s my way or the highway’,” Cuomo said.

Cuomo says if lawmakers offer an alternative plan that saves as much money as his plan, then he’s open to talks. The governor says his plan will save $113 billion dollars over future decades.

A spokesman for the state’s largest public workers union, the Civil Service Employees Association, says even without the 401(k) option, Cuomo’s proposed Tier VI benefit plan is too meager.

“The Tier 6 plan represents a 40 percent reduction in benefits, with or without options," CSEA’s Steven Madarasz said in a statement. "That is all about corporate CEOs  driving an agenda that tells future nurses, school bus drivers, highway workers and others to give up hope of  future security."

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It's A Free Country ®

Who Had the Better Week—Cuomo or Christie?

Friday, February 24, 2012

Both rock stars in their own right, both trying to right their states' ships, and both building serious momentum for a potential presidential run. Every Friday, we'll look at who's week will look better on a résumé come 2016.

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The Empire

Local lawmakers' coalition hammers DiNapoli over pension reform

Friday, February 24, 2012

Local lawmakers think that Comptroller Thomas DiNapoli is the one misinformed about pension reform.

A bipartisan coalition of local lawmakers that includes New York City Mayor Michael Bloomberg are continuing to push for Governor Andrew Cuomo's proposed pension reform. And they're taking direct aim at the person seen as the biggest defender of the current pension fund system: Comptroller Thomas DiNapoli.

In a recent op-ed, you defended the status quo and criticized those who say that pensions are “unsustainable and unaffordable.” But we know first-hand that the facts on the ground run counter to your comments. Pension costs for New York’s localities and counties have grown by more than 630% over the last decade. These skyrocketing costs have meant less money for our schools, less money for our police departments, less money for job creation, and less money for social services. If pension costs are allowed to continue to grow – as they will in the absence meaningful reform now – the level of service cuts and tax increases that will be required to balance our local budgets in the future will be devastating. That outcome is unacceptable and entirely avoidable.

The letter is signed by the mayors of New York City, Syracuse and Jamestown, as well as the county executives of Westchester, Suffolk, Monroe, Onondaga and Oneida. In it, they argue the Governor's plan will save localities--including New York City--$79 billion over the next 30 years.

"To dismiss the importance of $79 billion in savings because it will be realized over time is simply not responsible," the letter says. "In the weeks ahead, there will undoubtedly be efforts by special interests to distort the facts and stop responsible and fair reform of our pension systems. We hope you will reject those efforts and instead be guided by the fiscal realities that local governments are facing."

02 24 DiNapoli Pensions Final

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The Empire

Groups layout support for pension reform as Cuomo escapes the shill label

Wednesday, February 22, 2012

Courtesy of the Comptroller's office

Pension reform is one of Governor Andrew Cuomo’s highest priorities this year. In both his state of the state speech, and more formally in his budget proposal, the Governor laid out his vision for fixing what many perceive to be the state’s broken and unsustainable pension system.

Cuomo would give future employees the option of participating in a defined contribution plan, which works like a 401(k) and would be similar to the system SUNY and CUNY use today. It's one of a couple reforms instituted under the Governor's new Tier VI proposal.

On the other side of things you have State Comptroller Thomas DiNapoli. The Comptroller has called basing policy on the current state of the pension system—still recovering from the financial sinkhole of the last few years—“not the smartest move.” In an op-ed today, he calle allowing a 401(k)-style option for state employees "a false choice" which would "undermine [new employees'] long-term retirement security."

“New York’s proposed move to a 401(k)-style plan just doesn’t make sense," DiNapoli said in the op-ed.

Over the past week think tanks, good government groups and research institutes have weighed in on the debate. In general, they’re supportive of the Governor’s proposals to change the state’s pension system—but in various ways, and in varying degrees.

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The Empire

Biz-friendly mandate relief group supports Cuomo's pension reform plan

Thursday, February 09, 2012

When the Let NY Work coalition unveiled its mandate relief program back in November, pension reform was literally at the top of their list. The coalition consists of business, real estate and municipality groups pushing for major changes to the obligations localities have to the state and public employee unions.

Today Let NY Work doubled down on their push for pension reform, hailing Governor Andrew Cuomo's proposal for a new pension tier that would give new state employees the option of enrolling in a 401(k)-style retirement plan.

“New York cannot afford to not pass this legislation," Peter Baynes, the executive director of New York Conference of Mayors, said about the Governor's plan in a statement. "Without it, local governments will steadily lose the fiscal capacity to hire employees, much less pay their pensions. This is a critically important step on the road to sustainable property tax relief for New Yorkers. If state legislators are serious about authentic mandate relief, they must pass the governor’s Tier VI plan."

"The Tier VI retirement proposal advanced by Gov. Cuomo is a fair and balanced approach to containing pension costs in New York," said Unshackle Upstate's executive director Brian Sampson in the statement.

The new Tier VI plan is opposed by labor unions. New York State Comptroller Thomas DiNapoli has signaled his resistance to the idea, suggesting that the logic behind a new tier--that the current economic problems justify a long-term change to the system--"might not be the smartest move.

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The Empire

DiNapoli: Gov's budget erodes government oversight -- updated

Tuesday, February 07, 2012

Courtesy of the Comptroller's office

New York State Comptroller Thomas DiNapoli gave Governor Andrew Cuomo's proposed executive budget a mixed review today. DiNapoli applauded the Governor and state legislature for making "progress toward aligning state spending with revenue" but criticized Cuomo for proposing changes that would give him and future governors "greater powers that would reduce long-established checks and balances".

“This year’s Executive Budget proposal continues that trend and substantially reduces out-year deficits," DiNapoli said in a statement. "However, this progress should not be made at the expense of transparency, appropriate checks and balances, and the realistic and necessary safeguarding of public dollars.”

DiNapoli has warned before of the threat the sluggish economy poses to the state's finances. He reiterated his concerns over tax receipts, the potential for a global economic slowdown and the potential for decreased federal funds "that could make achieving the expected level of revenue or savings challenging" in this year's budget.

He also took Cuomo to task for a number of proposals in his executive budget plan:

  • Allow the Executive to move spending authority from one agency to another with minimal oversight, or legislative input, and without regard to the original intent of the funding in the Enacted Budget as approved by the Legislature.
  • Strips the Comptroller's office of its power to review and approve contracts issued by state agencies.
  • Doesn't put a price tag on the implementation of a Tier VI pension plan, which would give state employees the option of enrolling in a 401(k)-type plan.

A request for comment was put into the Governor's office.

Here's a statement from Budget Director Robert Menga, in a somewhat oblique response to DiNapoli's criticism:

We can no longer abide by the Albany status quo that allows for out of control spending and contracting that wastes taxpayer dollars. To avoid cuts in services, local aid or tax increases, the Executive Budget directs State agencies to be more efficient and focuses resources on their core programs and services. The flexibility language will allow for a range of operational measures and will improve functions such as procurement, real estate, and information technology.

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The Empire

'The Capitol Pressroom' with Susan Arbetter

Wednesday, February 01, 2012

Today on "The Capitol Pressroom":

Sure, “NYSAC” sounds alpha-male tough, but we’ll be hearing from two county executives & members of the organization (NYS Association of Counties) who are feeling pretty vulnerable about Medicaid these days. Essex County’s Randy Douglas and Onondaga County’s Joanie Mahoney sat down with us on Tuesday at the Desmond Hotel and poured out their hearts to us about issues like spousal refusal.

Meanwhile, the Governor will be speaking today at NYSAC’s annual shindig. But one member of the group won’t be here. Martha Robertson, the Chair person of the Tompkins County Legislature will be here at the Capitol for meetings with all the behind-the-scenes decision-makers who run state government on a daily basis. She will give us a glimpse into that secret, underground lair* where politics and policy are entangled like lovers.

And then it’s all about Frank. Frank Mauro. An analyst with a license to practice fiscal policy with the Fiscal Policy Institute. There are none cooler than Frank, and he’ll be here to delicately un-wrap explosive issues such as pension reform.

*not really underground.  On 2nd floor.

For show archives, please visit The Capitol Bureau's website here.

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The Empire

Mayor Bloomberg's prepared remarks at the executive budget hearing in Albany

Tuesday, January 24, 2012

Courtesy of the mayors office

“Good morning. I want to thank our committee chairmen, Denny Farrell and John DeFrancisco; the ranking minority members of the committees holding this hearing, Assemblyman Robert Oaks and Senator Liz Krueger; and all the members of both the Assembly Ways and Means Committee and the Senate Finance Committee for this opportunity to testify today.

“Seated with me this morning are Mark Page, the City’s Director of Management and Budget, and Micah Lasher, our Director of State Legislative Affairs.

“I’ve come to Albany this morning to express my strong support for many elements of Governor Cuomo’s executive budget and reform plan for 2012 and 2013, to indicate where and how the Legislature can improve that budget and plan and to present elements of the City’s own legislative agenda for this session.

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WNYC News

Bloomberg Stakes Out Common Ground on Cuomo Budget

Tuesday, January 24, 2012

Mayor Michael Bloomberg, appearing before a joint Assembly and State Senate budget panel in Albany Tuesday, expressed his strong support for much of Governor Andrew Cuomo's proposed budget for next year.

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The Empire

DiNapoli: Cuomo pension plan not 'the smartest move'

Monday, January 23, 2012

Courtesy of CSPAN

Governor Andrew Cuomo is calling for a new pension tier for future state workers, which would give them the option of enrolling in a 401(k)-style retirement plan. But the state’s top fiscal officer, Comptroller Thomas DiNapoli, calls making decisions about the pension system based on today’s fiscal troubles “might not be the smartest move.”

“We can no longer sustain the current pension system,” Cuomo saidduring his budget address in Albany last week. He went on to call the rising costs to state and local government “devastating.”

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The Empire

Legislative leaders signal their cooperation on Cuomo's reform agenda

Wednesday, January 18, 2012

By Karen DeWitt, New York State Public Radio Capital Bureau Chief

Courtesy of the Governor's office.

Governor Andrew Cuomo is for the second year in a row asking the state legislature to enact some changes that promise to shake up business as usual at the Capitol. While, the governor was successful in persuading the legislature to adopt his ideas during his first year in office, it’s not yet known whether he have as much luck in the second year.

Cuomo’s budget plan contains at least two major policy shifts that the governor admits “pose dramatic change” that will unsettle the “big players” in Albany: pension reform and statewide teacher evaluation systems.

In both proposals, Cuomo is taking on powerful unions of state workers and teachers, who have long been allies of the Democrats who lead the Assembly and even Republicans who in charge of the state Senate. It’s an election year for all 212 members of the legislature, and unions often provide support for field campaigns in the form of volunteers to staff phone banks and to drop off campaign literature door to door.

Despite that, legislative leaders did not rule out backing Cuomo’s plans.

Senate Republican Leader Dean Skelos worked cooperatively with the Democratic governor last year to enact a property tax cap. He also permitted the historic Senate vote on gay marriage, even though Skelos personally opposes same sex marriage. The Senate leader predicts that the budget will once again be on time, and that the legislature will ultimately approve Cuomo’s proposal for a new pension tier with fewer benefits for future workers.

“I believe there will be a three way agreement on pension reform,” said Skelos. “Which is significant.”

Assembly Speaker Sheldon Silver, who made a point recently of speaking to a rally organized by a group allied with the teachers union, says he thinks Cuomo’s plan to force teacher evaluation agreements makes sense.

“He’s on target,” said Silver. “It gives the incentive to both sides in the collective e bargaining process to come to an agreement.”

Although the governor’s policies, if enacted, will likely anger many established groups in Albany, lawmakers may conclude that they are taking an even greater chance if they alienate the extremely popular governor.

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The Empire

City and state lawmakers weigh in on Cuomo's executive budget proposal

Tuesday, January 17, 2012

Downstate lawmakers, both state legislators and city elected officials, are reacting positively, generally, to Governor Andrew Cuomo’s budget speech given today in Albany. The biggest pieces of the Governor proposed—pension, education and Medicaid reform—took center stage.

They all could have significant impacts on the city's finances and public workforce. The Governor's pension reform would affect all future new public employees, including New York City first responders, while his teacher evaluation proposal could affect the ongoing battle between the city and teachers. And with billions being spent by the city on Medicaid each year, any change in the payment process is significant for the city.

“Governor Cuomo put forward a budget that demonstrates a bold commitment to tackle some of the toughest challenges facing our great state. He has my strong support,” Mayor Michael Bloomberg said in a statement. Bloomberg has been a strong support of much of what the Governor proposed for education and pensions. The Mayor also said he supported Cuomo’s plan to “reduce onerous local Medicaid costs.”

Council Speaker Christine Quinn signaled she, too, supports the Governor’s plan:” This is the strongest state budget that New York City has seen in a long time. With this new budget, Governor Cuomo is establishing a stronger financial basis for a more vibrant and healthy New York.”

Up in Albany, city lawmakers signaled both support and concern for what they heard from Cuomo.

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The Empire

Cuomo's 2012 budget will look to keep the state on track while touching the third rails

Tuesday, January 17, 2012

Courtesy of the Governor's office.

In today's budget speech we could see Governor Andrew Cuomo expending some of the horde of political capital he continues to pile up.

First and foremost, there's the issue of the approximately $2.1 billion budget gap projected for next year. After restructuring the tax code to include higher-income earners paying more, reports indicate the Governor will again turn to state agencies, asking for a two-and-a-half percent cut across the board.

Then there's the promised four percent increase for both education and healthcare in this budget. Cuomo's already made reforming Medicaid an agenda item in his administration, but appears to have stopped short of the call for the state to take up the call for the state to fully takeover pay for the program.

One of the biggest battles--and seemingly a perennial one--is likely to be over the Governor's call for a teacher evaluation system. This is almost certainly setting up a fight with the state's teachers union.

Another battle between Cuomo and the union's is expected to come from the Governor's proposal for a new pension tier. It's being reported he'll seek a 401(k)-like system for incoming government workers, including first responders.

Another interesting note: the budget won't include money for hydrofracking. Conversations with people working on the issue, some of whom are close with the Cuomo administration, have indicated a growing uneasy with the issue inside the Governor's office. The lack of financing in this coming year indicates that, at the very least, Cuomo is taking a longer, harder look at the process.

As soon as we get our hands on the budget, we'll start digging through to get you important details on the Governor's priorities for the coming year.

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The Empire

Expectations run high for education, health care in Cuomo's budget

Friday, January 13, 2012

By Karen DeWitt, New York State Public Radio Capital Bureau Chief

Courtesy of the Governor's office.

Governor Andrew Cuomo is set to release his state budget plan on Tuesday. He will have the challenge of closing a $2 billion dollar budget gap.

But the good news is, it’s far less than last year’s $10 billion dollar gap. It’s smaller than it was projected to be as recently as a month ago. That’s because Cuomo and lawmakers in December struck a deal on major changes to the state’s tax code. The changes will bring an estimated $1.5 billion in additional revenue.

The bad news, for Cuomo, is that he does not have lot of options to close the gap. He’s already said he does not want to raise taxes. Yet he’s holding to a commitment to increase spending on schools and health care by four percent in the new budget.

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The Empire

The pension deal: What does John Liu walk away with?

Friday, October 28, 2011

Getty / Slaven Vlasic

Yesterday’s announcement that Mayor Michael Bloomberg and Comptroller John Liu had agreed to a major overhauling of how the city’s pension system would be run surprised many people. These two haven’t exactly seen eye-to-eye when it comes to pensions. And considering the fact that Liu wants the job currently occupied by Bloomberg, it’s worth looking at the deal a little further to see what Liu actually gets out of it.

First, what exactly did they agree to? The mayor’s and comptroller’s offices, along with labor leaders who’s members pay into the funds, agreed to push to have the city’s five separate funds brought under the control of one board, with an outside manager hired to run the whole thing.

I say “push” because the plan, which is being hailed as a financialboon to both city taxpayers and pensioners, has to clear major hurdles—like having the state legislature and the Governor sign off on the change, among other things—to clear before any changes would take effect.

That being said, the most interesting thing is that the agreement essentially strips the Comptroller’s office—this or future ones—of one of its main duties. There’s this line from the press release:

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It's A Free Country ®

Stephen Sweeney on NJ Budget Battles

Monday, July 25, 2011

When people started looking at these cuts, they were getting angry like I was...People see this as mean-spirited, cruel, honestly it’s heartless. Look, if you want to fight with me, fight with me. But don’t take innocent hostages.

New Jersey Senate president Stephen Sweeney, on The Brian Lehrer Show.

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The Empire

Are Cuomo's labor contract wins good signs for pension reform?

Monday, July 18, 2011

This past weekend showcased another win for Governor Andrew Cuomo. Even when the legislature's out of session the governor continues to pick up pieces of his agenda. The latest victory was the signing of a five-year deal with the state's second largest public employee union, the Professional Employees Federation that the governor's office estimated would save the state $400 million.

Governor Cuomo made it clear last week that he intends to make pension reform one of his top priorities for the coming legislative session. Last week, Mayor Bloomberg's office made the case for pension reform, despite the city's comptroller's disagreement on the pressing nature of pensions reform. The fact that the city's top money counter's opinion has little to no affect on the mayor's push for changes to the pension system is an indicator of how strong the mayor and governor's position is.

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The Empire

Deputy Mayor Steel rebuts Liu on pensions

Thursday, July 14, 2011

Pensions, Sunny-side Down

Steel laid out the city's case for pension reform. 

Getty Images/Chris Hondros

Mayor Bloomberg’s economic capo, Deputy Mayor Robert Steel, presented the administration’s case for pension reform this morning at a breakfast put on by the Citizen’s Budget Commission. Considering CBC and the mayor’s stance on city pensions, the gist of the forty-minute talk wasn’t a surprise.

 

The city’s pensions were unsustainable. Their costs had risen seven fold and now represent nearly 13 percent of the city’s budget. Only education spending costs the city more. And the big problem, said Steel, isn’t that the fund hasn’t performing well enough—it’s that we’ve promised more than we can cover.

“Pensions are to the City of New York what entitlement reform is to the federal government,” Steel said. “These are difficult, hard issues that require political risks to be taken to make the hard choices that we need.”

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It's A Free Country ®

Christie on the Pension Deal, NJN and Xanadu

Sunday, June 26, 2011

Fresh off his legislative victory curbing state worker benefits, New Jersey governor Chris Christie talks about his bi-partisan strategy to put the deal together, the future of the state's public broadcasting assets and the stalled Xanadu mall project.

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