New York State taxpayers are sitting on an ever-expanding pension bubble that needs to be popped. Due in large part to the billions of taxpayer dollars the state and its localities are required to contribute toward New York State’s public pension fund, residents endure some of the most oppressive property taxes in the United States; Long Island suffering some of the highest. To prevent this problem from ballooning further, legislation is needed to ensure limits on future pension liabilities.
Unfortunately, reforming our pension system may not be so easy due to our state constitution. Just weeks ago, The Illinois Supreme Court voted down an overhaul of its state pension system. The overhaul was voted unconstitutional as membership in a government pension system is defined as a “contractual relationship, the benefits of which shall not be diminished or impaired,” according to Illinois’ state constitution. New York State’s constitution contains nearly identical language on the subject matter. Based on this ruling in Illinois and how New York’s constitution is written, a constitutional amendment will be needed to allow the legislature to make changes to our current pension system. This cannot wait, which is why I am proposing this amendment in the Assembly.
According to the Office of the State Comptroller’s website, the New York State Common Retirement Fund holds $176.8 billion in assets “for more than one million members, retirees, and beneficiaries from State government, most local governments, and some public authorities.” This massive pension fund comes at great taxpayer expense, and it only gets worse as each year passes. We must reform the pension system now to prevent the state’s economic climate – which was ranked the worst in the U.S. by the American Legislative Exchange Council – from continuing to drive our residents to other states in search of a lower, more feasible cost of living.
As a step toward solving this problem, I have authored legislation to remove elected officials from the equation and make them part of the solution. These officials cannot be expected to vote in an unbiased manner when it comes to making much-needed changes to our pension system when it directly benefits them. My proposed legislation (A.4957) will convert elected officials from the current pension system to a 401(k)-style defined contribution plan, of which they will be required to be members. This will save New York taxpayers money as soon as it is enacted and will allow elected officials to vote – with no bias – to reform the pension process, thus providing increased taxpayer savings in the future. The goal should be to convert all state and local employees to defined contribution pensions to move toward sustainable benefits for members and, subsequently, less oppressive property taxes for our residents.
The more recent system of placing new hires in New York State into “tiers” is another small step in the proper direction of limiting large pension payouts. Taxpayers, however, will barely see the savings trickling down from this. We must be more proactive.
We must prevent oppressive tax burdens from burying our residents in debt and poverty. My proposed legislative reforms aim to do just that; these measures will mean budgetary savings and more money in the pockets of taxpayers. I have reached out to my colleagues and other members of the state Legislature and now I am asking all New Yorkers to encourage their state legislators to join my efforts and support these bills.