Employer contributions to the New York State Teachers’ Retirement System (NYSTRS) were 6.19 percent of covered payroll in 2010, but are expected to hit 8.62 percent next fall and 11.11 percent in 2012. While NYSTRS has not projected its pension rates beyond next year, our recent Empire Center report on “New York’s Exploding Pension Costs” estimated that the contribution could hit 16 percent of payroll in 2014, and 25 percent by 2016.This problem is not going away any time soon. In terms of "unfunded mandates" that are propelling unsustainable tax increases for New Yorkers, pensions are huge.
The Torch
I never understood why the pensions weren't funded correctly to start with. The politicians (and the taxpayers too) loved pensions when it came to negotiating with teachers, because they could hold down salary increases that way (and in budget negotiations, it was often presented exactly that way, as a chip to bargain with). How is it that no one realized that these pension systems had to be funded at correct levels?
ReplyDeletePolitical corruption? I don't think either party to these bargains is innocent in this. Taxpayers weren't paying much attention, which is understandable when you start to try to figure out the accounting mechanisms involved in these deals.
ReplyDeleteI fault the taxpayers. They loved, loved, loved those politicians who claimed they were holding salary levels down during negotiations. Voters love accounting tricks of all stripes.
ReplyDeleteUltimately, it is the voters who are responsible for all things our government does.
ReplyDeleteBut the system seems ripe for political corruption, so voters have to be ever vigilant.
ReplyDeleteDisgraced former New York Comptroller Alan Hevesi was sentenced today to one to four years behind bars after he reaped $1 million in improper benefits in return for steering $250 million in pension money to a crony.
Appearing in Manhattan Supreme Court, Hevesi, 71, admitted that he abused the taxpayers' trust after he had pleaded guilty to a felony corruption last fall.
Read more: http://www.nypost.com/p/news/local/manhattan/former_state_comptroller_hevesi_EtROBn6jGwaklokuYooqUO#ixzz1JnGhh4H3