Cuomo blocks vets’ pension sweetener

by E.J. McMahon |  | NY Torch

Screen Shot 2014-10-30 at 10.30.56 AMCalling it an “oppressive unfunded mandate” that would impose $57 million in “near term obligations” on local governments across New York State, Governor Cuomo has vetoed a bill that would have allowed public employees to claim up to three years worth of pension service credit for time spent in military duty.

The ability to purchase up to three years of potentially valuable pension credit time is available to all state and local workers honorably discharged from the military from World War II through 1975, and to veterans of specific combat theaters including Grenada, Panama, and the Middle East, but not yet to veterans of Somalia, the Balkans or Afghanistan, among other more recent conflicts. The bill passed by the Legislature would have permanently extended this right to all honorably discharged veterans, regardless of when or where they served.

As noted here, the bill was one of several pension sweeteners passed by huge margins (57-4 in Senate, 133-1 in Assembly) in the final days of the legislative session in June. The Senate, which controlled the measure, chose to send it to the governor’s desk on Oct. 29, less than a week before the election. The 10-day deadline meant the governor would have to act before Veteran’s Day if he wanted to block the measure.

If that timing was meant to jam Cuomo, it obviously didn’t work.  While the governor’s office press office tried to minimize attention paid to the veto message, releasing it late Friday afternoon, the message didn’t mince words.  

To create a financial disincentive for future pension sweeteners, Cuomo’s Tier 6 “pension reform” of 2012 had included language requiring that the full cost of any retirement benefit increase for state and local employees to be paid out of the state budget. Nonetheless, the veterans’ pension credit legislation would have required localities to eat the cost for their eligible employees. For that reason, it was opposed by the New York City mayor’s office, the state Conference of Mayors and the Association of Counties.

“If enacted, this bill would run rough-shod over systemic reforms carefully negotiated with the Legislature to avoid saddling local property taxpayers with additional unmanageable burdens,” Cuomo said.  

The bill is expensive, with a total projected net present value of hundreds of millions of dollars in the long term, because veterans could “buy” aded pension credit at a very steep discount relative to true costs, putting most of the burden on taxpayers. Such a proposal, Cuomo concluded, “should be raised only in the broader context of negotiating the state budget.” 

Beyond the immediately affected group of veterans, the veto sends an encouraging signal that Cuomo will take a hard line against other pension sweeteners passed by the Legislature this year — including a bill, not yet sent to the governor’s desk, resurrecting early retirement for uniformed court officers hired since 2012.

Judging from some emails received by the Empire Center last week after this NYTorch post raised questions about the bill, Cuomo will now be accused in some quarters of lacking patriotism and of disrespecting veterans.  In fact, he has earned a Veteran’s Day salute from taxpayers throughout the state — a group which, of course, includes veterans themselves. 

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- E.J. McMahon is the Research Director at the Empire Center for Public Policy.