There are lots of reasons why the town of East Greenbush earlier this month had its bond rating reduced to junk status. But it comes down to this: The town has a lot of debt, and its costs are rising.

For instance, pension costs for East Greenbush’s 26-person police force are jumping $30,000 to $266,000 this year.

Those payments are calculated on returns from the state investment fund — which are down due to the recession — and on how much the town pays its police officers.

In East Greenbush, police salaries, including overtime, known as the salary base, rose almost 11 percent during the 2007-2008 fiscal year, the period for which the latest pension contributions are calculated.

It wasn’t much different in other Capital Region towns and cities, where salaries and subsequent pension costs for their retired police officers have risen steadily over the past few years with no sign of abating.

According to data from the state comptroller’s office, Schenectady paid a whopping 23 percent more in police salaries in 2007-08, while Watervliet’s costs were up 7 percent.

In some cases the increases were due to raises, while in East Greenbush and elsewhere they reflected an expansion of the force.

Communities such as Bethlehem sweetened their police pension packages, allowing officers to retire with substantially higher benefits if they work beyond the 20 years at which most officers are eligible to retire.

Either way, police pension costs and the salaries they are based upon provide a stark look at how municipalities — aided by rules passed in the Legislature that favor public employee unions — appear unable to contain personnel costs, even as the recession continues to cause layoffs, pay cuts and other cutbacks across the private sector.

“It just compounds,” said Chris Hearley, the budget director for Albany, where police pension costs will rise from $3.8 million to $4.1 million due to a recently finalized contract for the city’s 328-person force.

Compensation for police and firefighters typically make up 40 percent of city budgets, said Peter Baynes, executive director for the state Conference of Mayors.

Like many others, Baynes believes municipalities are at a disadvantage when they sit down with the uniformed unions to bargain labor contracts because of the way the rules have been set up in the Legislature.

“When you get into these negotiations with unions, if we don’t come up with something, we can end up in binding arbitration — and we don’t know what we’re going to end up with then,” said Bethlehem Supervisor Jack Cunningham.

“We’re always negotiating with one hand tied behind our back, because we know that binding arbitration is not something we can avoid,” said Cohoes Mayor John McDonald, the recent past president of the New York Conference of Mayors.

Under laws passed years ago by the Legislature, police and fire unions can go to arbitration with the state’s Public Employment Relations Board if they can’t reach a contract. PERB arbitrators look at factors such as salaries paid in other communities and the amount of tax burden a town can take on.

Critics like McDonald and Baynes say that narrow view often overlooks the desire by local governments to limit property taxes.

Not everyone is convinced that the threat of arbitration favors the unions. James Roemer, an Albany lawyer who bargains contracts on behalf of municipalities, compares it to a game of blackjack where the players have to calculate whether they have a better hand than the dealer.

“You’re afraid you’re going to go bust. Sometimes it happens and sometimes it doesn’t,” Roemer said. “I don’t support the notion that it’s cheaper to give away the store than to go to arbitration.”

In Bethlehem, Cunningham said, officers went two years without a raise, although longevity increases were still paid. As a result, they bargained a contract that allows members of the 42-member force to earn extra pension credits if they work beyond the standard 20-year period after which many police retire.

Salaries in Bethlehem start at around $50,000 and top out at $77,000 exclusive of overtime and automatic longevity increases. All of those factors are used to calculate the retirement pay.

Under the new contract, a Bethlehem officer in his or her mid-50s can choose to work another 10 years and collect over two-thirds of their final salary and even more if they stay longer.

E.J. McMahon, director of the fiscally conservative Empire Center for State Policy, notes that these retired officers will likely collect pensions for decades. Add health insurance to that package, and it’s clear why groups like McMahon’s believe the costs are unsustainable.

Adding to the costs is the growth in police departments themselves.

East Greenbush added three officers over the last few years. That wasn’t because of rising crime, but to meet higher security standards in town court, said Councilman Bill Danaher.

The town used to employ bailiffs — often retired police officers — to maintain order in the court, but they now use current police officers who are qualified to run the court’s metal detector.

That’s more expensive, and it means adding overtime for officers in order to maintain a round-the-clock road patrol.

Overtime has long been an issue in police pensions, and there are some changes on that front.

Going forward, the new Tier V pension plan recently signed by Gov. David Paterson limits the amount of overtime that police can use in calculating their pensions. That should save money years down the road, but the savings won’t be realized for a while.

“Tier V is definitely going to help some municipalities across the state,” said Danaher.

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