ROBERT SABO/NEW YORK DAILY NEWS
Staten Island Sen. Diane Savino leads the resistance to necessary pension reform.
They just don’t get it or they just don’t care that public employee pension costs are crippling the city and the state.
Members of the Legislature on Wednesday held a first hearing on Gov. Cuomo’s critically needed reform plan — and promptly subjected it to withering dissection.
The questioning of Budget Director Robert Megna was so close that spectators could be excused for thinking union leaders had commandeered the legislative seats.
Literally, that is, not figuratively, which is clearly the case.
Democratic Staten Island Sen. Diane Savino, a former labor leader; Democratic Brooklyn Assemblyman Peter Abbate, who carries union water, and others took umbrage that future government workers wouldn’t enjoy the rich retirement benefits that the legislators themselvesget.
The lawmakers focused entirely on how life would change, as it must, for employees who have yet to be hired, rather than on the devastating impact on taxpayers.
The retirement tab for New York City alone has quintupled since Mayor Bloomberg took office — to $8 billion from $1.5 billion. Payments to city pension funds now chew up 12% of the budget, and they’re still climbing.
Getting a handle on this ballooning expense is a priority for Cuomo and Bloomberg. They rightly believe those billions should be spent on services — like education, police and fire protection — rather than retirement payouts that are way out of line compared with anything in the private sector.
While sparing the benefits of current workers and retirees, as required by law, Cuomo would raise the retirement age to 65 from 62 and require workers to stay on the payroll for 12 years instead of 10 to be eligible for benefits. Overtime would no longer count in calculating pensions. And employees would contribute more than the current 3% of salary, depending on their pay level and economic conditions.
Best of all, newcomers would have a choice of entering a 401(k)-style investment plan, with the state chipping in as much as 7% of salary. It’s an option that has been a big hit with SUNY faculty — and would be much more predictable and affordable for taxpayers.
But choice, affordability and saving money don’t sit well with the public employee unions. And the legislators’ queries toed the labor line.
They questioned whether differences in benefits between older and younger workers would create friction in the ranks.
They questioned whether new hires would be sophisticated enough to choose the best plan and manage their money responsibly.
They questioned whether retirees would end up in poverty.
They questioned whether the small upfront savings are worth the trouble, even though they
will mushroom to more than $100 billion over the next 30 years.
Worst of all, they questioned whether they could possibly agree on pension reform before the April 1 budget deadline. “This is a very complicated issue,” Savino opined.
Funny, but she and her colleagues never ran short of time when it came to passing pension sweeteners year after year.
The hearing made clear that Cuomo has a tough fight on his hands in making pension reform happen this year. It’s a battle he must win — making full use of the sweeping budgetary powers afforded him by the state Constitution.
