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Douglas Turner: New York can’t sustain its retirement systems
Updated: August 21, 2010, 5:45 AM
WASHINGTON — Nearly 100 state-run public employee pension systems in the United States are under-funded, some seriously. South Carolina Police has only 63.3 percent of the money needed to send out future paychecks. West Virginia Teachers has only 43.3 percent. Rhode Island is just 58 percent, according to the Center for State and Local Government Excellence. (Do we smell a federal bailout coming?)
New York State’s retirement systems are not among these future deadbeats. That’s either good news or bad news, depending on whether one is a public employee.
The center’s survey says that all the New York State systems are funded at 100 percent. That’s because, unlike retirement programs in most other states, the New York systems have a grip on the taxpayers’ wallet that is literally stronger than death or taxes.
By law, whatever revenues New York’s investments don’t produce for future retirees are made up by you, the taxpayer. It’s a lot. Taxpayers outside New York City produce roughly $2.5 billion a year to beef up these generous and leaky retirement programs for teachers, police officers, firefighters, license clerks, inspectors and others.
The annual subsidy amounts to more than $625 per household. Last year, about $890 million of the pensions bailout came directly from state government. Locally, including school districts, taxpayers paid $1.567 billion in fiscal 2009, the state comptroller said.
The New York systems are trust funds, legally unbreakable bank accounts that have the very first draw on all revenues. The thick-fingered tap into your wallet didn’t just start when the stock market tanked. It was going strong more than 10 years ago because of quiet but expensive deals made by Albany politicians with the unions.
Many private pension systems have gone broke paying 50 cents on the dollar or less, as Harrison Radiator and Republic Steel alumni will tell you. Many other private systems do not pay an inflator. New York’s public systems do.
Breaking down the tax payments into categories statewide is difficult. The strong grip of the unions and the bountiful payouts themselves make district officials elusive. One suburban Buffalo school district suggested we file a freedom of information request to get its figure. The Amherst Central School District suggested someone at the superintendent level would have to release the information. No one from Amherst called back. Thanks to the intercession of Buffalo Comptroller Andrew A. SanFilippo, we can report that the city school district paid $21 million into the state teachers retirement system last year. All but $2.6 million of employee contributions were reflected in city taxes.
The state projects that Buffalo will have to pay $6.8 million into the employee retirement account next December, and another $6.9 million the February after. The state estimates that Buffalo payments for police and fire retirements will be $23.2 million in December, and $23.4 million in February. Most of this winds up as city taxes.
Erie County Comptroller Mark C. Poloncarz reports that the county government forwarded $33.8 million to Albany to buttress pensions for county employees and members of the Sheriff’s Department in fiscal 2006 when the stock market was rollicking. The figure dipped to $21.3 last year, but will be back up to $30.6 million in 2013.
Poloncarz has no data for village, town and school districts. Is this sustainable? The Center for Excellence, speaking about the national crisis, doubts that it can be solved in a recession when state funds are pinched.
Certainly not in New York State, where private jobs are shrinking. Attorney General Andrew M. Cuomo is doing a good job rooting out corruption in the office of state comptroller, which is responsible for the integrity of these funds. Whoever is elected governor faces a bigger task fighting the soft corruption, which costs taxpayers $2.5 billion a year.
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