expect big jump in pension costs

[dgriffin]

www.lohud.com/article/20090830/NEWS05/908300344/-1/newsfront

Local governments expect big jump in pension costs
/
Joseph Spector
Albany Bureau/
8/31/09

Local governments are bracing for more than a 50 percent jump in pension costs in 2011, the first in what is expected to be huge increases in pension expenses over the next several years.

Comptroller Thomas DiNapoli plans to announce this week that local governments will have to increase contributions to the state pension system from 7.4 percent of their total payroll in 2010 to more than 11.5 percent in 2011.

To cover pensions for police and fire departments, local governments will be required to increase their contribution rates from 15.1 percent to at least 18.4 percent, records show.

To put the increases in perspective, cities say they would have to raise property taxes by 10 percent in 2011 just to cover the soaring pension costs.

Doing so would be untenable for most communities, so local governments say they would have to try to cut costs or find another way to increase revenue.

But new money has been hard to come by for local governments, which have faced three consecutive quarters of declining sales-tax revenue - the biggest revenue generators for counties.

Taxpayers are already shelling out about $2.5 billion a year for the state's pension system; it would grow by about $880 million in 2011 under the current projections.

"It's going to have a significant impact on local budgets, particularly when they are dealing with all these other fiscal pressures," said Barbara VanEpps, deputy director of the state Conference of Mayors.

The bigger problem is that pension costs are expected to soar even higher in future years. By 2015, local governments could be doling out a cost that is equal to 30 percent of their public payrolls to pay the pensions of their retirees and to keep the fund whole, according to projections by the comptroller's office and Gov. David Paterson's budget office.

"It will be one of the largest issues facing local governments over the next few years," predicted Stephen Acquario, executive director of the state Association of Counties.

The state pension pays benefits to about 350,000 retirees and has 650,000 members who are still working. When economic times were good, the fund was producing record returns through Wall Street investments, and the cost to taxpayers was low.

But when the economy slowed, the fund plunged 26 percent last year, losing about $44 billion and bringing its total value from $154 billion to $110 billion.

DiNapoli's aides have pointed out that other states have suffered similar declines in their pension funds; New York's fund is one of the largest in the country and is under the sole control of the comptroller.

Local governments are getting a bit of a reprieve in 2010, though.

DiNapoli, based on a five-year rate of return, lowered the contribution rates from the current fiscal year of 8.5 percent to the 7.4 percent in 2010.

Local government officials said the growth in pension costs is one reason the state needs to reform the system and reduce benefits to public workers.

[Clipper]

I would just say the the reason that local governments are finding it hard to find any extra money for funding such things is because the state is already sucking the taxpayers dry. It is not the local fire and police that are causing the problem, it is the economy and the fact that there are way too many state employees in Albany whose positions could be cut.

The only bigger nightmare in politics today that is bigger than Roefaro or the Obama administration is Patterson and HIS administration.

They need to learn the meaning of REDUCE, not TAX MORE. If they have to cut services so be it. Nothing is free, and someone has to bite the bullet. Why should government employees have any more security in these shaky economic times than the rest of the taxpaying public? Let some of the high powered horse's patoots in Albany and Washington do some of THEIR OWN WORK instead of having a half dozen administrative assistants and secretaries.

We need police and fire. We DON'T need all the high paid persons whose job description are vague at best, and their salaries are ridiculous. When I worked in Air Force civil service, we were required one year to reduce our budgets by 27%, and we were able to successfully accomplish that deed by cutting out unnecessary items and eliminating unfilled positions. Our function remained effective, and our days went by faster when we all had to work a little harder. Every year our budget process was closely monitored and our budgets were screened for places we could cut and save. THAT is what needs to be done on ALL levels of government. Obviously the state, county and local governments do not know the definition of CUT, ELIMINATE, OR SAVE!

We are looking in the wrong place for savings when we expect those that protect and serve YOU are expected to take the whack in pension benefits.

[gski]

Clipper, it seems that the only place that's not cutting is government. It's that endless cycle that they have to spend everything they have or they won't get more the next year.

The taxpayers keep getting told, "it's only a 1% or 2%, 3% increase" and then when you add it all together with everyone else's increases it's 8, 9 10% over the year before. Incrementalism. A little at a time. Paychecks don't increase by that amount per year.

I saw a joke that was actually quite good. It'd be a great new government program, or at least a way to reduce one. It's never happen. Here it is:

Like most folks in this country, I have a job. I work, they pay me.
I pay my taxes and the government distributes my taxes as it sees fit. In order to get that paycheck, in my case, I am required to pass a random urine test, with which I have no problem. What I do have a problem with is the distribution of my taxes going to people who don't have to pass a urine test.

So, here is my Question: Shouldn't one have to pass a urine test to get a welfare check, because I have to pass one to earn it for them?

Please understand, I have no problem with helping people get back on their feet. I do, on the other hand, have a problem with helping someone sitting on their ass - doing drugs, while I work. . . Can you imagine how much money each state would save if people had to pass a urine test to get a public assistance check?

I guess we could title that program, 'Urine or You're Out'.
Some things have to change in this country, and soon!

[Clipper]

I have seen that joke before gski. I have to imagine it would either cut down on welfare costs or cut back drug use, one or the other. LOL

It is put out there as a joke, but it should be a legitimate requirement. Hell, I can't remember the last job I had that did NOT require drug testing.

Hell, before I had my back surgery, I was taking oxycodone for pain. I had to go to the VA and submit to random testing to make sure that I WAS taking the drug, haha. I guess some people were getting a prescription and then selling the pills on the street.

I am a firm believer in both drug testing and workfare for those that draw public assistance, and are capable of doing something in return for their benefits.

It is hard to believe that it is not mandatory for people on public assistance to shovel out fire hydrants, pick up litter, cut grass in the parks, or if they are skilled, to work in their field of expertise for the benefit of the public, such as working as plumbers or whatever in government buildings. If they had to work for the benefit check, they might be inclined to get a real job in the everyday sector in order to get the higher pay for their work.

[dgriffin]

I deal with quite a few people who are on public assistance. Few are just "down on their luck and need a hand up." Most don't have useful skills, such as plumbing. And WorkFare has met with resistance from the Unions.

The problem of unemployment is over-rated. It isn't "unemployment" that's the main problem, it's poverty. What we really have is a whole hell of a lot of people for whom we have nothing useful to do. And dwindling resources (I just paid my property taxes tonight.)

We give them public assistance to keep them from rioting. It would be the biggest protection racket known to man, except that few realize it.

Here's a sobering article by a flaming liberal, but I don't doubt any of the facts she cites. I've seen some of it and heard most of it. The paper is almost ten years old. Things haven't gotten any better.

www.wpunj.edu/~newpol/issue30/mandel30.htm

[gski]

dave, just a quick comment on unemployment. Ny which has one of the highest rates on employers for taxes, inclucing unemployment, hasn't changed it's reimbursement amount in how many years?! A decade! The maximum is $405. I truly feel for those who are unemployed and watch what NY calls unemployment benefits. It's another trevisty for NY>