While the Legislature struggles to reach final agreement on yet another budget that is sure to spend more than the state can afford, a bit of good news for New York taxpayers can be found on the last page of today’s report from Governors David Paterson’s Task Force on Public Retiree Health Insurance.

The task force said it was “unable to reach consensus” on whether to support legislation that would make it much more difficult for counties and municipalities to change health care benefits for their retired employees.  In other words, public employee unions were unable to turn the 16 – 13-member panel into a vehicle for gaining gubernatorial support of a bill that would effectively lock in tens of billions of dollars in unfunded retiree health care liabilities across the state.  The report also recommends creation of a “standing” (i.e., permanent) task force to continue studying the issue.

Background: Since 1994, based in part on recommendations of another gubernatorial task force, New York school districts have not been allowed to make any change in retiree health benefits that is not negotiated with the unions representing their current employees.  This prohibition was first imposed in a temporary bill that was re-enacted annually until last year, when Paterson unwisely agreed to a provision making it permanent in exchange for a very modest tweak of pension benefits for teachers.  Citing the school district precedent, unions representing other groups of employees had been seeking a similar law for years, only to see it vetoed by Governors George Pataki, Eliot Spitzer and Paterson.  However, Paterson’s veto message was coupled with a promise to create a task force to study the issue — a promise he kept last March.

The 16- 13-member task force included three representatives of county, town and municipal organizations, five  Paterson administration officials appointees and a Paterson-appointed chair, Richard Berman, plus a representative of the state comptroller.  Since Paterson controlled the swing votes, the final result might be taken as a sign that the governor will veto the bill again if it is passed again this year.  Meanwhile, union and retiree representatives filed dissenting memos indicating they aren’t about to give up their fight.

Most of the task force report is taken up with technical recommendations for streamlining and improving coverage–none of which, on first glance, seem to add anything to tax-funded expenses.