State Comptroller Tom DiNapoli’s announcement last week that municipal pension costs would rise 10.6 percent in 2012 will be added pressure on state, county and local governments. Police and fire contributions will rise 12 percent.
In the 37th Senate district race, Assemblyman George Latimer, D-Rye, and Bob Cohen, the Republican real estate developer, has plans to help the municipalities cope with the unfunded mandate from Albany, and the state pension fund, which is still recovering from the stock market crash in 2009.
Latimer wants to cap pension increases to 2 percent a year, in line with the 2 percent property-tax cap instituted this year. The remaining obligation, says Latimer, would be covered by state taxpayers, in the state budget. He believes the state income tax is a more progressive tax than the property tax, which funds much of local and county budgets.
Cohen, on the other hand, has proposed that the state make up the difference between the pension fund’s predicted annual return, and the results at year’s end.
Cohen also wants to give municipalities and the state the option of offering workers 401K savings plans instead of the defined benefit plan now in place for local and state workers. In a 401K plan, employees make contribution that can be matched by the employer at a certain rate.
Under DiNapoli’s order, state, county and local governments will contribute an average of 20.9 percent of an employee’s salary to the pension fund.