Budget watchdog group urges rejection of Cuomo's pension bailout plan
A leading budget watchdog group is urging rejection of a key component of Gov. Andrew Cuomo’s budget plan. It would allow cities and schools to put off some payments to their pension funds.
The governor’s proposal, known as the pension stabilization plan, would allow schools and municipalities to “smooth” out their pension payments over a 25-year period, by paying less now, but more later.
The Citizens Budget Commission has written a letter to New York State Comptroller Tom DiNapoli urging him to reject the idea, saying it would “endanger the future financial viability of the pension plan.” The commission’s Betsy Lynam calls it a “gimmick.”
“It’s not real relief,” Lynam said. “It could have higher costs for them later.”
DiNapoli has said he has some concerns with Cuomo’s proposal, but has not yet issued a final judgment.
Since 2010, the comptroller since has given local governments the option of a ten-year borrowing plan to meet pension payments, paid back with interest. Citizen’s Budget Commission says while they initially opposed that plan, they think it’s still better than what Cuomo is offering now.
Lynam says Cuomo and state lawmakers should instead get together with all the stakeholders, and find some solutions to the larger problem of financially struggling cities.
Syracuse Mayor Stephanie Miner, who is also the governor’s chosen state Democratic Party co-chairwoman, has also criticized the pension stabilization option and, in an op-ed piece for the New York Times, accused the governor of avoiding the reality of imminent financial collapse of major upstate cities.
Miner testified in Albany at a legislative hearing on the governor’s budget earlier this winter, saying she still had “more questions than answers.”
If the comptroller ultimately also rejects Cuomo’s budget plan, it would have face even more obstacles in the legislature. Assembly Speaker Sheldon Silver said, in an interview this month with New York State Public Radio and Television, that he won’t back the pension option if the comptroller decides it’s not a good plan .
“If he said no, I think the courts have ruled that he’s the final arbiter on that issue,” Silver said at the time.
A spokesman for Cuomo’s budget office, Morris Peters, says the pension stabilization plan won’t jeopardize the financial health of the state’s pension fund.
“The proposal was carefully designed to be fiscally neutral to the funds, and we included multiple protections to guarantee that it is,” Morris said in a statement.