A property tax cap hasn’t even passed both houses yet (as of late Thursday), and already the state Senate has slipped through a bill that would allow school districts to circumvent it.  The measure immediately was referred to the Assembly Ways & Means Committee, just a step away from a floor vote in the legislative session’s final hours.

screen-shot-2011-06-23-at-114222-pm-2786040An egregious fiscal abuse on its own terms, the bill (S.4067-A) would allow school districts across the state (except for New York City) to issue 15-year bonds to cover a portion of their rising teacher pension costs over the next several years — at least $1 billion in all, by one estimate.  The measure was introduced two months ago at the behest of the New York State United Teachers (NYSUT) as a way of reducing pressure on teachers to make contract concessions.

Sound familiar?  The bill — sponsored by Sen. Martin Golden and Assemblyman Peter Abbate, both of Brooklyn — was the subject of a critical blog post here back in early April.  At that time, Senate sources claimed it was going nowhere.

A version of the same bill targeting the Yonkers school district alone was introduced much more recently, as highlighted here a couple of days ago, but the Assembly version had been amended to “strike all (wording) after enact,” which is a sponsor’s way of putting on the brakes.

This afternoon, the Yonkers City Council was schedued to act on a budget partially contingent on the pension bonding plan.  And then this evening, out of the blue, a statewide version of the bill moved to the Senate floor and was passed.  NYSUT obviously struck again.  After all, why settle for a financial gimmick designed to preclude union givebacks in one district when you can persuade your friends in the Senate Republican majority to do it statewide?

If passed, the bill will not only push higher pension costs well into the 2020s–and compound them with high interest charges, since pension bonds are taxable — but it will also represent a massive breach of the tax cap. Remember: the revised version of the cap makes an exclusion for a portion of pension costs.  Under the Senate’s teacher pension bonding special, assuming the cap is enacted, districts can collect added taxes to cover rising pension costs even while bonding out those costs over a period of up to 15 years.

The spotlight turns to Gov. Cuomo. Did the governor send the Legislature a signal that this would be OK with him?  If not, how quickly will he veto it?

About the Author

E.J. McMahon

Edmund J. McMahon is the Empire Center’s founder and research director.

Read more by E.J. McMahon

You may also like

Union pay remains non-“prevailing”

Barely one in five private construction workers in New York State was covered by a union contract last year, according to newly released statistics that call into question a state public works "prevailing wage" mandate that assumes 30 percent union coverage of building trades occupations across New York. Read More

“LIFO” strikes again

Rochester schools are laying off 152 teachers, but there’s little doubt which educators are on the chopping block. Read More

Cuomo makes case against PLAs

In cutting the figurative ribbon on a big Capital Region highway project, Governor Andrew Cuomo made a convincing argument against his own policy of steering state work to building trade unions. Read More

A lesson on apprenticeships

The raw politics behind giveaways to building trade unions were on display last week in Troy, a city outside Albany. Read More

Unions puff up numbers post-Janus

One year after the U.S. Supreme Court said government workers couldn’t be forced to pay union dues, New York’s public-sector unions are concealing their losses by publishing inflated membership figures. Read More

School budgets sail under cap

Yesterday’s school budget votes proved once again New York’s school districts aren’t having much difficulty staying under—or overriding—the property tax cap. Read More

Suffolk’s questionable contracts

New York’s most populous suburban county has just ratified a trio of labor deals with its largest unions—and, in the process, showcased some of the worst aspects of collective bargaining across the state. Read More

Bill would subsidize union strikes

A bill passed by the state Senate last week could shift millions of dollars in costs from labor unions to the state’s unemployment insurance (UI) program while making employers indirectly subsidize union strikes. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.