Manhattan Institute for Policy Research.
search  
 
Subscribe   Subscribe   MI on Facebook Find us on Twitter Find us on Instagram      
 
 
   
 
     
 

New York Post

 

Paterson's Veto Pen

June 05, 2009

By Lise Bang-Jensen

GOV. Paterson deserves much credit for his surprise veto of a bill granting already- too-expensive police and fire pensions to employees hired after July 1 of this year.

He should keep that veto pen at the ready -- there are at least 98 more bills where that one came from.

Despite a crushing recession and a $45 billion drop in the state pension fund, Albany’s 2009 legislative hopper includes dozens of proposals to sweeten the retirement benefits of New York state and local-government employees.

Although some bills are retreads, all were reintroduced during the 2009-10 session -- when it was already clear the state was facing a budget gap of at least $15 billion, and when the state comptroller was acknowledging steep pension-fund losses.

The most expensive bill would alter the formula used to calculate automatic cost-of-living increases for older retirees. This change would carry a first-year cost of $760 million -- $300 million for the state and $460 million for local governments, according to the bill’s sponsors.

Other bills include:

* Early retirement. Similar bills in the Assembly and Senate would allow state and local employees to retire without any reduction in benefits at age 55 after accruing 25 rather than 30 years.

The annual cost of the Assembly version is pegged at $362 million, including $67 million for the state, $95 million for local governments and $200 million for school districts. The Senate bill would have similar costs.

At least a half-dozen other early-retirement bills have been introduced in at least one house of the Legislature.

* Employee contributions. Employees with less than 10 years on a government payroll now pay 3 percent of salary per year toward their pensions. Even this minimal contribution would be eliminated under a bill sponsored by Assemblyman Peter Abbate, the chair of the Assembly Governmental Employees Committee. Annual cost: $44 million for the state and $63 million for local governments.

Under another bill, employees who contributed for more than 10 years before the law was changed in 2000 would be compensated with extra service credit. Annual cost: $30 million to the state and $44 million to local governments.

* More police-style “peace” pensions. Uniformed state-agency peace officers (who have less training and fewer responsibilities than police) now belong to civilian plans requiring a minimum of 30 years of service for early retirement without reduced benefits at age 55. But several different groups of peace officers are seeking to move into plans that would qualify them for half pay after 25 years, closer to the “20-and-out” norm for police.

The most expensive of these measures, allowing state-judiciary peace officers to retire at 50 with 25 years service, would cost taxpayers an estimated $9.4 million annually plus a one-time payment of $57.7 million.

Other measures would extend earlier retirement to parole officers, police officers at the state university, investigators in the attorney general’s office, employees of the Office of Fire Prevention and Control and various peace officers at the Department of Taxation and Finance, Department of Motor Vehicles and State Liquor Authority.

* Presumptive disabilities. Under current law, police officers who suffer heart conditions are presumed to have developed them as a result of their jobs, qualifying them for more generous disability retirements. Eleven bills would expand similar “heart bill”-style presumptions to larger classes of public employees with various disabling health conditions.

* Phantom credits. Pensions are based on an employee’s work history, but two bills would allow up to two years’ pension credit for unpaid parental leaves. For school districts, the estimated cost would be $18,700 per year of service credited per retiree, or $37,400 for the maximum two years’ credit.

Local governments would need to spend 20 to 40 percent of salary for each year of credit claimed by an eligible retired police officer or firefighter.

If Paterson’s veto brings an end to New York’s pension gravy train, it will mark a real turning point.

Original Source: http://www.nypost.com/seven/06052009/postopinion/opedcolumnists/patersons_veto_pen_172625.htm

 

 
PRINTER FRIENDLY
 
LATEST FROM OUR SCHOLARS

5 Reasons Janet Yellen Shouldn’t Focus On Income Inequality
Diana Furchtgott-Roth, 10-20-14

Why The Comptroller Race Matters
Nicole Gelinas, 10-20-14

Obama Should Have Picked “Ebola Czar” With Public-Health Experience
Paul Howard, 10-18-14

Success Of Parent Trigger Is Unclear­—Just As Foes Want
Ben Boychuk, 10-18-14

On Obamacare's Second Birthday, Whither The HSA?
Paul Howard, 10-16-14

You Can Repeal Obamacare And Keep Kentucky's Insurance Exchange
Avik Roy, 10-15-14

Are Private Exchanges The Future Of Health Insurance?
Yevgeniy Feyman, 10-15-14

This Nobel Prize-Worthy Economist Figured Out How To Destroy Terrorism
Diana Furchtgott-Roth, 10-15-14

 
 
 

The Manhattan Institute, a 501(c)(3), is a think tank whose mission is to develop and disseminate new ideas
that foster greater economic choice and individual responsibility.

Copyright © 2014 Manhattan Institute for Policy Research, Inc. All rights reserved.

52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494