Gov. Andrew Cuomo is running up against some opposition to his proposed changes in the state pension system for public employees.
Cuomo proposes a new Tier VI for future public employees. He says it would save taxpayers $93 billion over the next 30 years, a figure that does not include New York City. The changes would reduce costs for local governments and schools. The new tier would increase the retirement age for new employees from 62 to 65, increase employee pension contributions and end pension padding, in which employees accumulate substantial amounts of overtime in their final years of service to increase their pension.
According to the state Division of the Budget, the annual pension cost for local governments and schools went from $2.3 billion in 2009-10 to $4.5 billion in 2011-12, and is projected to increase to $6.6 billion in 2014-15. That's a 185 percent increase over five years.
The governor's proposed changes would affect only new employees of state and local governments and school districts. Regardless, labor unions oppose the reforms.
The unions are a powerful force in state government. They contribute to the campaigns of politicians and lobby legislators on many issues.
The governor must not back down. He should press on with his demand for the pension tier, and state legislators should not allow this aspect of his 2012-13 budget proposal to delay state budget passage.
Pension costs are one of the major reasons for the severe financial problems facing local municipalities and schools.