Pataki Is Facing a Decision on Pension Giveaway

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The New York Sun

Dozens of bills making retirement benefits more generous for a wide range of public employees are awaiting Governor Pataki’s signature or veto.

If signed into law, the expanded benefits would cost taxpayers more than $100 million next year, a review by The New York Sun found. In the long run, the price tag would be significantly higher. While some of the bills consist of one-time payments, others are recurring, requiring increases to annual state contributions.

Working late into the night, lawmakers in both houses passed many of the pension bills last week hours before they adjourned for the year. They will enable more government workers to retire at half their top salaries, with regular cost of living increases.

The measures would raise benefits for at least tens of thousands of government employees, from investigators working for Attorney General Eliot Spitzer, to security workers at mental hospitals, to school teachers.The costliest of the bills would lower the retirement age for certain workers to 55 and ease eligibility requirements for opting into more lucrative retirement plans that are reserved for more experienced employees.

Lawmakers are looking to provide state employees more generous retirement packages at a time when pension costs are soaring. Statewide, tax-funded public pension contributions increased to $6.7 billion in 2005 from $1 billion in 2000, according to a report published this month by the Empire Center for New York State Policy, a branch of the Manhattan Institute think tank.

“In New York City alone, higher annual pension costs have consumed three-quarters of the new revenue generated by a record property tax rate increase and rising property assessments since Mayor Michael Bloomberg took office in 2002,” the report said.

The bills passed by both houses of the Legislature include:

* Allowing less experienced correction officers and security officials at mental hospitals to be eligible for a half-pay plan reserved for those with at least 25 years of experience.The change would cost the state $70 million.

* Giving teachers outside of New York City who are at least 55 years old and who have at least 25 years of experience the option of retiring without reductions in benefits. The cost for the two-year temporary measure would be almost $20 million.

* Offering half-pay plans to investigators in the Department of Law who have been on the job for at least 25 years.The cost is $1.8 million.

Critics of the state’s public pension systems say they guarantee benefits that are far more generous than those offered in the private sector. They view the escalating costs as a liability for the state that will ultimately lead to higher taxes. They also fault the system for being structured in a way that forces the state government to spend more on pension contributions during stock-market downturns, which in turn leads to higher taxes.

In bill memos, lawmakers defend the bills as justified assistance for employees in the most difficult jobs and as a way to rectify imbalances in the system favoring certain groups over others.

The pensions passed both the Democrat-controlled Assembly and the Republican-controlled Senate with overwhelming majorities. On several of the votes in the Assembly, a Republican lawmaker from Suffolk County, Michael Fitzpatrick, was the lone dissenter. Mr. Fitzpatrick said he rejected pension measures because he thinks the added benefits should be awarded only as a result of negotiations with the public employee unions.

“What I have found is that the unions prefer to avoid collective bargaining on some of these benefits and come to the Legislature,” he said. “And it forces the municipalities to negotiate with one arm tied behind their back.”

Eleventh-hour pension bills have become something of a tradition in Albany. Last year, lawmakers passed a raft of measures – some of which were signed by the governor – costing more than $100 million, according to one estimate. Some of the ones that the governor vetoed last year are headed to his desk again.

By pushing through bills on the last day of session, lawmakers are also able to shield the legislation from public scrutiny, Mr. Fitzpatrick said.”It’s done in the last minute when no one’s paying attention. There’s no opportunity for any momentum to build against it.”

This year, concerns in Albany over escalating pension costs have taken a back seat to efforts to ease the property tax burden of homeowners and curb Medicaid fraud. Mr. Pataki, who earlier in his third term frequently raised the issue of pension costs, has rarely mentioned the problem in speeches this year.

A spokesman for Mr. Pataki said the governor would reserve comment on the bills until they reach his desk.

The New York Sun

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