Editor's note: This editorial is partly based on a new report by EJ McMahon and Josh McGee, The Never-Ending Hangover: How New York City's Pension Costs Threaten Its Future
The latest Empire Center for Public Policy report on New York’s soaring pension costs focuses on six-figure retiree payouts, which have now crossed the 3,000 mark. It’s a telling sign of how public employees continue to collect benefits far greater than most private-sector workers — at a huge cost to the taxpayers.
The center does an annual update on retirees who qualify for at least $100,000 a year in a public pension. Many of the latest additions are Long Island police and firefighters (whose salaries are also well above the national and even state average).
The biggest pension went to Dr. Shashikant Lele, a former senior staff member at Roswell Park Cancer Institute, who was eligible to collect $436,356, according to SeeThroughNY, the Empire Center’s transparency Web site.
“The number of taxpayer-supported six-figure pensions is going to keep growing,” said Tim Hoefer, the center’s executive director. “Every year Albany waits to modernize our public retirement system and place new employees in a more sustainable defined-contribution plan puts our children and grandchildren on the hook for more future risk.”
In parts of the state, that risk is stiff: The city estimates its total unfunded pension liability at $65 billion, but the Manhattan Institute’s E.J. McMahon and Josh McGee warn that it’s likely closer to $142 billion.
Why the gap? The city (like governments across the state) unrealistically assumes a long-term return on pension-fund investments of 7 percent.
Yet, even without socking enough away for the future, the city has to devote ever more of its budget to pensions — 11 percent ($9.6 billion) this year, up from about 3 percent in 2001.
The same thing is happening across the state: In the decade 2005-15, yearly taxpayer contributions to the state Teachers’ Retirement System and the State and Local Retirement System more than doubled, from $3.7 billion to $8.4 billion.
That’s cash that can’t go for schools, parks, subways or anything else. And none of this includes the billions more needed to cover health-care promises for retired public employees.
As Hoefer notes, it’s up to the Legislature and the governor to fix this mess. Sadly, they’d rather appease the politically powerful public-employee unions and leave it to future politicians to deal with it all after it’s become a full-blown crisis.
This editorial originally appeared in the New York Post