Public Pension Watch: New York

Now it’s New York’s turn to get the spotlight, and there is some very interesting jockeying going on.

I’m going to start with the Governor—a Democrat (of course) who has told the legislature that the pension issue is not up for negotiating:

Gov. Cuomo had stern words Thursday for state Sen. Diane Savino and other lawmakers who’ve questioned his pension reform proposal and why he didn’t consult the state’s labor unions.

“We just negotiated our contracts with unions,” Cuomo said during his Red Room press availability.

“Pensions are not part, by definition, of that negotiation,” Cuomo continued. “Pensions are separate, and they are controlled by a law passed by the Legislature.”

Cuomo said demands by lawmakers that he work with unions were simply an attempt to shirk responsibility to the taxpayers.

Someone sounds touchy.

There may be a reason for that:

Two of the largest components of New York State’s budget are education and Medicaid, McDonald said during the presentation. Each of those components had built-in inflator, McDonald said, and that was a surprise to Cuomo when he was going through the budget over a year ago.

“They averaged approximately 13 percent,” McDonald said. “So before you even started taking a look at the budget, by statute, many of the programs had automatic inflators.”

As part of the negotiation a year ago, he took the cuts to education and Medicaid to a flat rate, and the agreement was flat last year with no increase and four percent this year.

To close the remaining $2 billion deficit, Cuomo plans to follow his same course of action from 2011 by closing the deficit by eliminating automatic inflators.

Altogether, Cuomo’s budget reduces overall spending by $225 million.

Let’s see — $2 billion — $225 million…. I’m not seeing this deficit being closed. He’s going to have to whack hard at spending, because Illinois has already shown that increased taxation does bupkis for closing deficits.

Now, of course, just because Cuomo snaps at his fellow Democrats doesn’t mean they will keep their yaps shut. Here’s the State Comptroller:

State Comptroller Tom DiNapoli has issued an aggressive defense of the current pension system and—without getting into specifics—slammed Gov. Andrew Cuomo’s proposal to offer a 401(k)-style defined-contribution plan as part of his Tier 6 proposal, calling the change “unacceptable” and “extreme.”

DiNapoli’s comments came at a forum sponsored by the National Public Pension Coalition at the National Press Club in Washington, D.C. on January 19, 2012.

According to a copy of the comptroller’s prepared remarks sent out by his press office, DiNapoli decried the “coordinated, sustained attacks by anti-pension advocates” that he says have “falsely cast public pensions as costly, unsustainable giveaways that are bankrupting states and localities.”

Looks like someone wants to be Governor, eh? Look, when you’ve got skeezy teachers or just plain incompetent teachers that are unfireable, while racking up pensions that are higher than many people’s salaries . . . there’s not going to be a whole lot of public support for the public unions and the pensions they’ve “negotiated” for themselves.

I am sure that Cuomo would have loved to throw money at traditional Democratic support groups, but there does come a time when the gravy train ends, and someone has to oversee the cuts. This is not unique to New York, and we’ll be seeing a lot of testy Democrats, from California to Illinois to Rhode Island, as their precious money machines unravel due to unsustainability.

ADDITIONAL: Bloomberg talking about rising pension costs

Mayor Bloomberg called the city’s pension system a “ticking time bomb” that costs six times more than it did 10 years ago.

The city will have to shell out $8 billion to cover pension costs this year—with $1 out of every $6 from taxpayers going toward it, he said on Thursday.

“Imagine what would happen to your family budget if the rent went up six times over the course of a decade, or your grocery bill or the cost of a Metro card,” he said as he unveiled the city’s 2013 preliminary budget.

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