June 04, 2009
Paterson pushes pension plan
Governor David Paterson has succeeded in getting legislators' attention with his veto of a police and firefighter pension bill that has been routinely renewed every two years. His bid for a Tier 5 pension bill also may involve buying off union support with $20,000 checks to thousands of state workers who voluntarily quit their jobs.
Meanwhile, the Legislature is considering more than 100 bills that would sweeten the pensions of state and local government employees. A report in a companion Public Payroll Watch print edition notes the bills were introduced or reintroduced since January 1 when the state was facing at least a $15 billion budget gap and the state comptroller was acknowledging steep losses in the state pension fund.
Update: Citizens Budget Commission also is tracking end-of-session pension bills. For its scorecard, see here; press release, here.
There are legal questions about whether the bill Paterson vetoed is even necessary to continue the Tier 2 pensions for police and firefighters hired after July 1. The surprise veto "shocked" union officials and probably could be overridden by the Legislature where the bill passed with only 6 negative votes in the Assembly. (For more on veto, see here, here, here and here.)
In his veto message, Paterson notes:
Participants in Tier II may retire at half pay in twenty years, and do not generally make pension fund contributions.
He says such pensions are no longer affordable.
...these are not routine times. The State and localities are hemorrhaging revenue at an alarming rate due to the recession and financial crisis.
His Tier 5 proposal, which would be optional for local governments, would offer less generous benefits that would be more affordable to taxpayers, according to the governor.
However, his "reform" plan is far too modest to rectify the pension system's massive financial problems, the Empire Center's E.J. McMahon wrote earlier this week.
Today's Times Union reports the Paterson administration is discussing a $20,000 per employee buyout package with union officials. Details are sketchy and the potential net savings of a $174 million buyout are not explained.
Paterson previously had threatened to layoff 8,700 state workers in July unless their unions agreed to roll back a 3 percent pay raise.
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