Westchester, Rockland and Putnam counties could save a total of $212 million over five years under a proposal by Gov. Andrew Cuomo to give local governments the option of reducing pension contribution rates in the short term, and increasing them over the long term. The governor included the proposal — called the Stable Rate Pension Contribution Option — in his $136 billion 2013-14 budget proposal last week.
Counties, cities, towns, villages and school districts could lock in long-term, stable pension contributions for a period of time that would be determined by the state Comptroller’s Office and the Teachers’ Retirement System. The governor is proposing that the stable rates would be 12 percent for the New York State Employees’ Retirement System, 12.5 percent for the Teachers’ Retirement System and 18.5 percent for the Police and Fire Retirement System.
If the Legislature doesn’t adopt the recommendation, average contribution rates in 2013-14 would be 20.9 percent for the Employees’ Retirement System, 16.5 percent for the Teachers’ Retirement System and 28.9 percent for the Police and Fire Retirement System.
“The difficult financial pressures facing localities are well-known here in Albany, and my administration from day one has been committed to helping local governments meet their budgetary obligations as well as continue to provide critical services to their residents,” Cuomo said in a statement. “While the Tier VI reforms (in 2012) were a major step toward helping local governments deal with the pension crisis, we understand that more help is needed. For this reason, the Executive Budget proposed the Stable Rate option to offer local governments and schools a bridge to the long-term savings of Tier VI, as well as greater predictability.”
Civil Service Employees Association President Danny Donohue criticized the Stable Rate Pension Contribution Option last week, saying in a statement that Cuomo “is proposing a bait and switch scheme on his own misguided Tier 6 that will allow public employers to underfund their pension obligations — basically raising the system to pay for savings that Tier 6 didn’t actually provide and calling it mandate relief.
“This approach would put political expedience ahead of fiscal responsibility,” he said.
The governor proposed last year, and the Legislature approved, a new pension tier that provides less generous benefits to new hires.
These are the one-year and five-year estimated pension savings for Lower Hudson Valley counties and cities, according to the governor’s Division of the Budget:
— Putnam County, $3.9 million and $13.6 million
— Rockland County, $16.7 million and $58.2 million
— Westchester County, $40.1 million and $140.3 million
— Mount Vernon, $5.5 million and $19.7 million
— New Rochelle, $5.4 million and $19.4 million
— Peekskill, $2 million and $7.1 million
— Rye, $1.3 million and $4.6 million
— White Plains, $8 million and $28.6 million
— Yonkers, $21.4 million and $77.6 million.