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Hide your wallet: State lawmakers are moving to reward their public-employee paymasters with a fat pension raise that’ll cost taxpayers billions.
State Senate and Assembly Democrats have each passed resolutions requiring pensions for public employees hired after 2012 (i.e., Tier 6 workers) to be based on their salaries for just the last three years of service, instead of five.
That pretty much guarantees juicier pensions — while adding $4.4 billion to taxpayer debt: $2.2 billion in IOUs for Gotham’s five funds and a similar amount for the state system (covering state and local employees outside the city), the Empire Center’s Ken Girardin warns.
The hit would start immediately, as the change would force higher government contributions to the funds, including $163 million a year (doubling by 2040) from the city alone — forcing service cutbacks or tax hikes from the city, state, school districts, and local governments.
Yet public employees in New York, even those in the least-generous Tier 6, already enjoy generous (and state-tax-exempt) pension benefits, particularly compared to workers in the private sector, where guaranteed (or, “defined benefit”) plans are rare.
And the cost to taxpayers has exploded — from less than $1 billion in 2000 to $10 billion by 2010 and $17 billion by 2015, as fiscal expert E.J. McMahon has noted.
The introduction of slightly less generous Tier 5, for workers hired between Jan. 1, 2010, and March 31, 2012, and Tier 6, for those hired after that, slowed the growth of costs somewhat, but unions keep pushing — with some success — to undo those savings.
Practically every government in New York is already staring down huge budget gaps in the coming years (multibillion-dollar ones for the city and state); the last thing Albany should be doing is bloating perks for public employees even further.
Oh, and these aren’t the only pension sweeteners lawmakers are eyeing, as goodies for the unions that fork over hefty campaign contributions.
Gov. Hochul has yet to say if she’ll veto any of them; for any she lets through, she should tell New Yorkers how many cops or teachers they’ll lose — or how much more they’ll have to cough up in new taxes.