Proposals to shave pension entitlements for new employees emerge in every fiscal crisis, prompting resistance from public-service unions and from the lawmakers responsive to them. Each pension tier marks an effort at what policy-makers call fiscal reform. Over the years the state has had four such tiers. The constitution bars cutting pensions to those already on the job or retired.
Earlier in the decade, calls for a fifth tier for rookies failed. But this new push could carry unusual momentum. The clearest reason is the severe fiscal crisis fueled by Wall Street’s collapse and the search for savings in every corner. But also, a certain political wind is blowing. Mention public pensions these days and scandalous abuses come to many local minds such as school board pensions for non-employees or hearty Long Island Rail Road retirees collecting for phantom disabilities. Into all that figures the decline and thinning of pensions in the teetering auto industry and other businesses.
New York State is actually in a fairly good position in regards to its pension. At least, compared to many other states.
But local governments all over NY state are getting killed by pension costs. The problem is that they will go bankrupt long before this fifth tier has any effect on pension costs. It will be at least 10 years before the state realizes any savings from this “fifth tier” and many local governments are going to be killed by pension costs in the next 10 years.
This entry was posted on Friday, December 19th, 2008 at 6:48 pm and is filed under Front Page, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.