The Cuomo administration reportedly is talking with labor leaders about tapping public and private pension funds to help pay for state infrastructure projects, including a multi-billion-dollar replacement for the Tappan Zee Bridge. While details are scant, the idea came in for some pointed criticism today on the editorial page of the Wall Street Journal, which said the plan “would give [public sector unions] political leverage and reinforce the impression that the [pension fund] money is theirs to bargain with.”
Indeed, why would Cuomo consider financing even a portion of state infrastructure needs with money from pension funds, which generally need to make 8 percent or more on their investments, when he could achieve the same result by issuing tax-exempt bonds at rates not much above 4 percent? Yes, the state’s statutory bond cap is beginning to pinch, but statutes can be easily overridden or sidestepped.
Local 32BJ of SEIU, the politically wired union representing building service workers in New York City, has taken the titular lead in rounding up union support for Cuomo’s plan. In fact, the union already seems to be ramping up a promotional campaign behind this idea, as evidence by a billboard that will greet returning lawmakers on I-787 in Albany, as shown at right.
Mike Mulgrew, president of the United Federation of Teachers, was the first public-sector labor leader reportedly consulted about this. Mulgrew’s union is represented on the board of the $33 billion New York City Teachers’ Retirement System (NYCERS), but that fund could never get involved in a new infrastructure funding scheme without the acquiescence of Mayor Michael Bloomberg.
The biggest potential pot at the end of the rainbow is in Albany. As the Journal editorial points out, the role of Horatio at the (Tappan Zee) Bridge will be played by state Comptroller Thomas DiNapoli, sole trustee of the state’s $150 billion Common Retirement Fund. DiNapoli can rule this out unilaterally. Perhaps in anticipation of that, Cuomo yesterday denied he had the state fund in mind.