The Empire Center for Public Policy sponsored a forum at the Crowne Plaza Hotel yesterday that was shocking, provoking and one more call to get off our arses and into the streets. New York’s Exploding Pension Costs was a wonk’s delight, loaded with facts, studies, charts and graphs about just how bad the future pension costs will be for New York State taxpayers and the governments they support. The report co-authored by EJ McMahon and Josh Barro, details how underfunded public pensions are in New York State, if you take into account market values of the investment portfolios and how rapidly increasing the demand for payments are growing.

Albany County faces a $16 million dollar increase for our pension obligations over a five year period of time that typically would be paid for with service cuts, tax increases or both. Naturally, I think there is a better way….. but more on that later.

The report lays out the facts in sobering detail and I recommend reading this report to any policy maker, elected official and taxpayer who really care about their government. The short version of how we got here is a combination of increasing payouts, declining rates of return on investments, a several year period of slight or almost zero payments by governments, pension system gaming and padding as well as some poorly thought out sweetners passed by the New York State Legislature.

The worst answer to this problem is the concept of a board replacing the elected NYS Comptroller’s control of the major pension systems. The absolute worst pension system abuses have taken place in states where “non political” investment boards make the investment decisions. At least in NYS we are prosecuting the former Comptroller for his role in the pay to play investment scandal that recently occurred. The incumbent has provided several good steps towards transparency that the True North proposal outlined in the Empire Center’s Report suggests. A True North proposal would simply list the market value of the investments in our pension funds on a regular basis and the public will have the necessary information to make informed decisions. Mr. North already does this in NYC….

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