New Yorkers got another alarming wake-up call last week about the state’s unsustainable pension funds. They’d be wise to pay close attention.
State and local employees who pad their pension payments by chalking up overtime as they near retirement could cost taxpayers a whopping $32 billion to $54 billion over the next 20 years, a new report — released Monday by the Center for Cost Effective Government — found. With inflation, that figure might jump to $84 billion.
It’s a lot of money, even by New York standards.
Public payouts are usually based on an employee’s three highest earning years, including overtime. So workers close to retirement juice their salaries by putting in extra hours, with many union contracts giving senior employees first crack at the OT.
State law now caps overtime pay used in pension calculations but only for workers hired after 2012. Passing a cap for all employees would require a change to the state Constitution.
As a result, “six-figure pensions are now quite common,” the center noted. Indeed, three-quarters of Nassau and Suffolk County cops who retired last year got more than $100,000 annual pensions; so did two-thirds of Yonkers police retirees.
One 52-year-old Nassau officer retired with a $221,086 annual package — after ending his career with a base salary of $122,514.
Last spring, The Post highlighted even higher payouts for LIRR workers, based on figures provided by the Empire Center.
Even with such abuse, the new report’s numbers may be high compared to other estimates. But there’s little doubt New York has a serious problem.
Pension costs account for more than a tenth of the city’s total budget, the Manhattan Institute reports, and 17 percent of city tax revenue. That’s twice as much as 20 years ago, and it leaves less money for schools, cops — or lower taxes.
Indeed, retirement pay is now on course to edge out social services as the largest spending category after education.
Then there are the benefits promised to workers years down the road: Taxpayers will be on the hook as the workforce continues to age, retire — and live longer.
Meanwhile, even as the state faces a $6.1 billion budget hole, Albany continues to pass benefit sweeteners for public-sector unions that contribute to their campaigns — 18 of them this session alone, the Citizens Budget Commission notes.
Gov. Cuomo wisely vetoed 14 but signed three others: City cops, for example, will now get retirement credit for time spent as cadets, costing taxpayers an extra $5.6 million annually.
Another bill he signed increases annual maximum contributions, from $700 to $1,200, for volunteer ambulance and fire services. Lawmakers didn’t even bother to calculate the cost, even though it’s required by law.
Cuomo & Co. just don’t seem to understand: They’re never going to plug the pension hole if they keep digging it deeper.