The state Senate’s one-house budget puts its own twist on Governor Cuomo’s dubious pension “smoothing” plan. The Senate version would give the state, as well as localities and school districts, the option of significantly under-paying pension contributions over the next few years.
Cuomo’s bill pointedly excluded the state — which, like a growing number of localities, is already taking advantage of a 2010 law that allows public employers to reduce pension costs by converting a portion of their annual pension bill into a 10-year IOU payable to the pension fund. Under the circumstances, you have to appreciate the Senate’s logic, though: if it’s okay for everyone else to shortchange the pension system, why not us? We want to “save,” too, so we can spend more.
At the same time, the Senate proposal could let tax-funded pension bills rise faster — by up to two percentage points a year, if the comptroller or the New York State Teachers’ Retirement System (NYSTRS) trustees think it necessary. Cuomo’s plan would allow pension contributions to rise by up to two percent only after five years, and again at year 10.
So the Senate, like Cuomo, wants to offer public employers an immediate 40 percent pension discount, while giving pension funds more flexibility to make up the difference down the road. In either case, a big chunk of pension bills otherwise due over the next couple of years would be pushed into the future, at which point they could become part of a bigger problem. To their credit, some local officials — most notably Syracuse Mayor Stephanie Miner — say the pension fix is no fix at all.
The plan can’t go forward without the approval of Comptroller Tom DiNapoli and NYSTRS trustees, though. By the way, where are they?