Gov. Paterson will soon get an excel lent chance to show seriousness of purpose when lawmakers yet again stick their fists in the public till – this time with a labor-driven measure that sets minimum health-care perks for public-sector retirees.
The Legislature could pass the bill as early as this week; Paterson should veto it out of hand.
On the preceding page, E.J. McMahon of the Empire Center for New York Policy lays out the details. Bottom line: The bill would make it impossible for state and local governments to trim health benefits for public-sector retirees – no matter how badly they need to do so to balance their budgets.
Without a doubt, Albany, and governments across the state, will then face an increasingly painful fiscal squeeze.
That’s becoming more evident, thanks to a 2004 national accounting rule that forces governments to more honestly report their obligations to retirees.
Such reporting is increasingly highlighting huge shortfalls in funding for future benefits. As McMahon notes, New York’s state government alone faces a whopping $50 billion in unfunded liabilities.
Meanwhile, retiree health coverage already represents the fastest-growing portion of public-sector employee perks.
And, of course, state and local budgets already face multibillion-dollar gaps.
Clearly, the need to cut back will soon become intense.
No wonder pro-labor forces are pinning their hopes to this bill: They want union members held harmless even when it becomes obvious that their lush benefits – relative to the average taxpayer’s package – aren’t even close to affordable.
No wonder, too, that they’ve resorted to a less-than-candid approach about their plans – pushing a “temporary” floor for benefits, when they reasonably expect it to be permanent.
And they pretend they’ll leave the question of benefits to a “task force” – even while the bill would stack the panel with pro-labor members.
Paterson clearly understands the fiscal dilemma facing New York. He’s warned of the grim budgetary impacts of a “reeling” economy and the need to “tighten our belts.”
But how will he – and local officials – rein in spending and keep taxes down if everybody’s hands are tied when it comes to retiree benefits?
Paterson’s predecessors, Democrat Eliot Spitzer and Republican George Pataki, both understood the fiscal havoc such a bill could wreak; both vetoed it.
Paterson needs to do likewise – for New York’s fiscal stability, and for his own credibility.
Here’s hoping he doesn’t let New Yorkers down.
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