Mayors and county executives from across the state have created a bipartisan coalition to push for Gov. Andrew Cuomo’s proposal for a new, less generous pension tier. Cuomo is asking lawmakers to approve a Tier 6, under which new employees would choose between a traditional defined-benefit pension plan or a 401(k)-style retirement plan. The retirement age would be raised fro 62 to 65 for new employees, they would have to contribute a larger percentage of their salary and early retirements would be prohibited. Public-employee unions are opposed to a Tier VI.
New York Leaders for Pension Reform includes leaders who represent more than 15 million New Yorkers, including the city of Hornell, Steuben County; New York City; New Rochelle, Westchester County; Rochester; White Plains; and Dutchess, Erie, Genesee, Monroe, Rockland and Westchester counties.
“Exploding pension costs are the single biggest threat to local government’s ability to deliver needed services,” Westchester County Executive Robert Astorino said in a statement. “It will be impossible to provide any real property tax relief while operating under these debilitating labor costs that automatically increase every year at an unsustainable rate. The Governor’s proposal is a good first step toward delivering savings in the long-term and I thank Mayor (Michael) Bloomberg for spearheading this coalition. We must continue working together to enact this plan and other reforms that will provide relief for both today and the future.”
Pension costs for local governments have increased more than 630 percent in the last 10 years, from $1.7 billion 10 years ago to $12.5 billion today, according to the coalition. Pension spending has reduced local governments’ ability to fund education, public safety, social services, economic development and other services, the group said.
“Rapidly increasing pension costs have become an unsustainable burden for local governments throughout New York,” New Rochelle Mayor Noam Bramson said in a statement. “Pension reform is urgently needed in order to relieve pressure on both taxpayers and municipal services.”
In New York City, pension costs account for 12 percent of the budget, Mayor Michael Bloomberg said. “Local governments around the state are all in the same boat, and we are joining together to support Governor Cuomo’s push for pension reform to ensure that boat does not become a sinking ship,” Bloomberg said in a statement. Passing responsible pension reform is essential to ensure that we can afford retirement benefits for tomorrow’s workers – and the public services that today’s citizens deserve and demand.”
State Comptroller Thomas DiNapoli has defended the current pension system and said that replacing a defined-benefit plan with a 401(k)-style plan “is a more costly and less effective option to provide retirement security.”
This is a statement he released this afternoon:
“Pension changes should be based on a factual, thoughtful and inclusive discussion about the level of benefits and ways to reduce abuse. Some local officials may be misinformed if they believe that any proposed change to the pension system now will provide them with immediate budget relief. It is also important that the costs to local governments for implementation be fully evaluated.”
These are comments from other members of New York Leaders for Pension Reform:
Genesee County Legislature Chairwoman Mary Pat Hancock —
“The Governor proposes pension reforms that would create flexibility in pension and retirement choices for public employees. Next to Medicaid, pension costs in New York State are the most significant burden on local governments. Unsustainable at its present rate of double digit growth, the new proposal ensures long term affordability for taxpayers while offering a secure retirement system for New York State’s public employees.”
Hornell Mayor Shawn Hogan —
“All local governments in New York State are dangerously close to financially ruin due in large part to the cost of public employee pensions, we need reform and Governor Cuomo’s proposal is a step in the right direction. As New York State’s longest serving mayor, I have never seen such dire financial times as we currently face, we must have a new tier now.”
White Plains Mayor Thomas Roach —
“I am pleased to be working with Mayor Bloomberg and my colleagues around the state on this critical issue. Pension payments are one of the top budget drivers in my city. The pension reform plan put forth by Governor Cuomo in his Executive Budget is a sensible one – and one that must be passed if we are to have any hope of bringing these costs under control in the future. At the same time, it rightly recognizes and protects existing pension benefits for current employees.”
Rockland County Executive C. Scott Vanderhoef —
“I strongly support Governor Cuomo’s pension reform legislation. Under this proposed reform, new employee contribution rates would increase, bringing much-needed relief to county governments like Rockland. It is vital that the state government address the huge unfunded mandate liability of pensions, which have significantly increased costs to the 62 counties of New York.”