The harsh budget reality confronting all cities is that many of our major expenses fall outside of local control. Here in New York, Exhibit A is the State retirement system — the pension fund managed by New York State’s Comptroller. Each year, Albany sends us a bill that varies depending on how well the fund performed in the stock market and a variety of other factors. If there’s any shortfall, the State constitution makes local municipalities largely responsible for filling in the gap.
And that gap can be extraordinary. New Rochelle’s contribution to the pension fund is escalating by about 20% a year, and now soaks up more than 1 in 5 property tax dollars sent to the City government. It’s a huge and growing problem, and that is why reforming the State pension system must be an urgent priority for State lawmakers.
This week I joined mayors and county executives from across the state in a bipartisan coalition called New York Leaders for Pension Reform. Our goal is to make sure that Albany legislators understand how important pension reform is to the fiscal health of local governments, and urge them to pass Governor Cuomo’s pension reform plan.
In truth, the measure proposed by the Governor is only a starting point, because its fiscal benefits would be felt over the long-term, and shorter-term relief is also needed. But I applaud Governor Cuomo for placing this issue front and center in this year’s State budget debate, and I encourage our representatives in Albany to support his proposals.