Businesses across the state will soon see a dramatic jump in taxes and rent as local governments face suffocating increases in pension costs.

The plunge on the stock market will trigger years of higher pension contribution rates for municipalities, saddling them with almost unsustainable expenses.

The trend will push property taxes higher, adding more overhead as companies try to shrink their expenses amid the recession.

“It’s just a question of how dramatic it can get,” says Peter Baynes, executive director of the New York State Conference of Mayors and Municipal Officials. “We’re finding out in very stark terms that this is no longer affordable.”

For decades, pensions have been essential magnets enticing people to civil service jobs that often pay less than private-sector positions. Now, the very tool designed to help local governments carries an overwhelming price tag, in a state already notorious for high taxes.

This month, state Comptroller Thomas DiNapoli warned municipalities that their pension contribution rates will leap in 2011. Average rates for the majority of government employees will rise to 11.9 percent of salary in 2011, more than 4 percent above the year before…

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