Monday, May 16, 2011

Cost cutting pension system for New York state employees, Cuomo to propose

US hits debt limit today !

Treasury Secretary Timothy Geithner said Monday that he will immediately halt investments in two big government pension plans so the government can continue to borrow money.

Geithner informed Congress of his decision in a letter stating that the government had officially reached its $14.3 trillion borrowing limit. He repeated a warning that if lawmakers do not increase the borrowing limit by August 2, the government is at risk of an unprecedented default on its debt.

We need pension reforms now as we are getting saddled with unprecedented amounts of debt which will be a drag on our economy in the future and a burden on the next generation. Its seems more likely that the next generation will not live the american dream if don't make the hard choices today. Gov. Cuomo's new cost cutting pension system plan is a step in the right direction.

Long Island's governments, school districts and public agencies will be billed more than $1.2 billion to finance the pensions of public workers in the next 12 months, according to a Newsday analysis. The state comptroller oversees the Employees' Retirement System and the Police and Fire Retirement System , which together cover workers in counties, towns, villages, water companies, libraries and fire districts as well as some nonprofessional employees in schools.

Click to see the New York pension database

ALBANY - Gov. Andrew Cuomo will soon announce a proposal for a new, less generous pension system for future state, local and school employees that is designed to save taxpayers $93 billion over 30 years, according to two officials briefed on the plan.

If approved by the Legislature, the proposal would increase the retirement age to 65 for all public employees hired after the law was passed. It would also end early retirement, force employees to pay twice as much toward their pension, and end the “padding” of pensions through overtime pay, sick time and other means.

Current employees and retirees wouldn’t be affected. New York City has a separate pension fund and city officials are considering their own pension reforms.The two officials spoke to The Associated Press on the condition of anonymity because Cuomo hadn’t yet announced the legislative proposal. A Cuomo spokesman declined to comment.

“There’s a lot of mythology that there are gold-plated retirements out there,” Stephen Madarasz, spokesman for the Civil Service Employees Association union, said Friday. He said the average pension for a CSEA retiree is $14,000 a year.

Madarasz said the governor’s task force that broadly recommended a new tier in March ignores “the shared sacrifice already shouldered by public employees."

Given already implemented pension-reform plans, “there are no immediate savings to be gained" though another set of reforms, CSEA stated in March.

A set of reforms, known as Tier V, was passed by the Legislature in 2009 under Gov. David Paterson with union leaders’ support. The plan is projected to save $38 billion over the next 30 years.

Cuomo’s Tier VI for public workers outside New York City would:

  • Raise the minimum age of retirement to 65. Retirement age is now 62 for most employees and 57 for teachers. Early retirement, now allowed at 55 years old with a 38 percent penalty, would end.
  • Require workers to put in 12 years before they qualify for a pension. Employees are now “vested” after 10 years.
  • Require new employees to pay twice as much toward their pension plan.
  • End the practice of “padding” a pension using overtime pay late in service, unused vacation and certain sick leave.
  • Cap pensions for the highest paid state employees — physicians at state teaching hospitals, CEOs of public authorities and utilities among them — based on the governor’s $179,000 salary. Many of those employees earn far more.
  • Eliminate a “multiplier” that boosts a pension after 20 years and 25 years of service.

The proposal doesn’t replace the traditional public pension with a 401(k) retirement plan common in the private sector, where employees pay far more or all of the contributions.

The Cuomo administration said government contributions to pensions rose as many as 20 times since 2001 for teachers, government workers, police and firefighters.

Suffolk County Executive Steven Levy, who has led the fight for pension reform among counties, recently said now is the time for governments to trade in pensions for 401(k) plans. He has said generous public pensions are unaffordable to taxpayers.



Anonymous said...

This is excellent. From some of your posts on Newsday, it seems that you are in Middle Country Schools. I am as well. I am planning on a similar type of blog and would welcome your assistance.

Anonymous said...

I understand this is productive, but the issue isn't Tier 5 & now 6 employees that are draining the state-

These kind of actions are 20-30 years too late.

Nobody put Tier 1 & 2 & 3 in check, this change will have no impact for another 15 years at minimum.

The ONLY solution to the problem at hand is to modify the state constitution limiting the pensions, or TAXING them (which they currently are not NYS taxed)

or... asking politely for givebacks from current pensioners. Even a measley 1% will help re-fund the system quite significantly.

Aside from that, all other points here on are too late- the bloodletting (albeit not intentional) is too severe for band-aids such as this.

Too many restrictions and challenges are being put unfairly on the gov't workers and teachers of tomorrow. They have higher standards, worse retirements, and harder certifications to pass.

BetterThanZero said...

Yes I agree that all these actions are just wrapping paper over a garbage box. We need some way to modify existing contracts. As you can see in all the school budgets for this year, most or all of the money is going into pension and benefits funds.

So the existing system is a big drag on the economy. Also the same is with Social security and medicare if we don't fix it today then it will be too late and any patch up process is not going to work as there will be too many holes to patch.

All the future tax hikes as state level or school budgets will just go to the skyrocketing benefit funds.

This year even less school budgets failed. I am totally surprised by the results! Anyway battle moves to next year now. Passing the budgets didn't fix anything it will come back to haunt again come 2012.

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Long Island Property taxes most important issue, say LIers

No surprise here ! To stop this ridiculous rise in property taxes we have to educate our fellow LIers and contact your representative that they should demand Speaker Silver respond to the pleas of homeowners across the state and support a property tax cap in New York. It has already passed the senate but is being stalled in the Assembly by Assembly Speaker Sheldon Silver.

Also this year we are seeing some enormous rise in property taxes in school districts such as
William Floyd 12.47% and Seaford 8.99%. Some school districts such as Middle country is resorting to blackmailing its residents. The deal for districts residents is either approved a 6.68% increase or the district is going to force 21.61% increase in tax levy.

Published by THOMAS MAIER at Newsday

By a wide margin, property taxes are the most important issue facing Long Islanders, according to a Newsday / News 12 Long Island / Siena Research Institute Poll. Property taxes were cited overall by 45 percent of respondents, more than twice the 21 percent who cited "availability of good jobs" as the second most pressing issue for Long Islanders. "Property taxes are really an issue here because it keeps the young people from staying on Long Island and it will prevent the older people from staying, too," Tafuri explained.

Property taxes also are a large part of why the 57 percent of those polled said Long Islanders are headed in the "wrong direction" rather than the "right track" in the poll. A similar margin said New York State was headed in the wrong direction as well.

Property taxes are a particularly raw issue in Nassau County, where 53 percent cited them as the biggest issue, compared to 36 percent in Suffolk. Islandwide, Republicans and people 55 years or older complained about property taxes the most. "The Democrats love to spend money and they have to get it from the taxpayers," said one poll respondent, a retired Republican who lives on Nassau County's South Shore.

School costs - the biggest part of property tax bills - were also on the minds of Long Islanders who cited "the quality of public schools" among their top concerns. "The first thing I would do is eliminate tenure for teachers in public schools to cut costs," said another poll respondent, a 50-year-old Garden City man who is a Republican and who did not want to give his name. Although he was happy that his two children attending local schools got a good education there, he said his family's property tax bill has been overwhelming.

Property taxes hit a chord with all respondents, regardless of age, race, gender, religion, location or party affiliation. In addition to identifying the most important issue, the poll underlined the intensity of Long Islanders' general feelings about property taxes, with 86 percent calling the issue "very important" and 11 percent as "somewhat important." Crime, schools, good jobs and health care also received strong reactions, with traffic congestion and the local environment getting milder reactions.