LOCKPORT – The No. 2 official in the State Comptroller’s Office told the Niagara County Legislature on Tuesday that the echoes of the 2008 stock market plunge that ushered in the Great Recession are still being felt in rising mandated contributions to the public employee pension fund.
Deputy Comptroller Thomas P. Nitido said the billings are based on what happened to the pension fund in the five years before the size of the bills are determined, a year in advance. Thus, the bill for 2011 was the first year that took the 2008-09 market bottom into account.
In the 2008-09 fiscal year, the pension fund lost 26.4 percent, or $45 billion, of its value in the stock market. Even though returns have been in the black ever since, the pension contributions required of localities continue to rise.
“In 2016, rates will start to go down,” Nitido said.
Niagara County’s pension contributions have more than doubled since 2010, when it paid the state $7.8 million. Its 2014 bill will be $15.9 million, even though the county has frozen union wages and cut the number of people on its payroll by 26 percent in the last decade.
“What kind of guidance can you give to the county to mitigate those costs?” asked Legislator John Syracuse, R-Newfane.
“You controlled salary growth. You decreased hiring,” Nitido said. “There really aren’t many places to go.”
Majority Leader Richard E. Updegrove, R-Lockport, said pensions will account for about 20 percent of next year’s county property tax levy. Pensions are exempted from the property tax cap.
The state is offering a one-year chance for localities to defer more than usual of their pension costs, but the bills will have to be paid eventually, in 10 years or sooner, Nitido said.
“Nobody wants to gamble the future of the county’s finances to save some money now,” Updegrove said.
Cutting pension benefits is out of the question. “The State Constitution says once you have a benefit, that benefit cannot be reduced in any way,” Nitido said. “Any changes can only be made prospectively, for new hires.”
In other matters, District 4 Coroner Richard Rutland resigned, effective April 30.
Rutland, who had just been appointed to the vacant position last summer, after Russell Jackman II resigned, was elected in November. He cited “family and business obligations.”
It will be up to the Legislature to fill the seat by appointment again, and an election for the final two years of the term will be held in November.