By JOSEPH SPECTOR
Albany Bureau Chief
ALBANY -- Mayors and county executive across New York warned Wednesday that local governments face a dire fiscal picture if the state doesn't lower growing pension costs.
Monroe County Executive Maggie Brooks said local governments could face bankruptcy without pension reform. New York City Mayor Michael Bloomberg said more city money goes to retirees' pensions than police, fire and sanitation services combined.
"The alternative here is going to be more people losing their jobs, fewer people being hired in local government and services declining," said White Plains Mayor Thomas Roach.
The local leaders have formed the group, New York Leaders for Pension Reform, and held a news conference near the Capitol to back Gov. Andrew Cuomo's proposal for a new pension tier for new public employees.
Public employees' unions are opposing Cuomo's push, arguing that a new pension tier was implemented just two years ago. They said a new pension tier would be another assault on the middle class and have no short-term benefit to governments.
Unions last year agreed to pay freezes and furloughs.
"Wall Street nearly melted down the economy and got bailed out, but future nurses, teachers, highway workers and school bus drivers are supposed to give up hope of retirement security," said Stephen Madarasz, spokesman for the Civil Service Employees Association, the state's largest public-employees union with 265,000 members.
Assembly Speaker Sheldon Silver, D-Manhattan, said he would encourage mayors to discuss pension reform with their local unions and "see what kind of agreements they can come up with."
Silver expressed the concerns of his conference over a 401(k)-type option included in Cuomo's pension proposal. The Legislature has yet to back Cuomo's plan. \
"I'm concerned about people's abilities to do their own investing and planning for 50 or 40 or 35 years down the road," Silver said.
Cuomo has suggested that the 401(k) option is important, but perhaps not critical to a deal.
Cuomo is proposing a new Tier VI pension level that would increase contributions from 3 percent of a new employee's salary to as much as 6 percent. The retirement age would increase from 62 to 65.
"Any resolution I seek will be a resolution that brings the maximum amount of savings," Cuomo told reporters Wednesday.
Westchester County Robert Astorino said the 401(k) option should be included in any new pension tier.
"I think the governor was right to include that in the package to give workers a choice and I hope he stands firm on that," Astorino said. "I think that's an option going forward that we need to start doing."
Pension costs have soared for state and local governments, in large part because the declines on Wall Street have meant higher annual payments to cover retirees' costs. Local governments estimate that pension costs have increased from $1.7 billion in 2002 to $12.5 billion this year.
"The threat of bankruptcy hangs over every single municipal government in this state because of escalating pension costs," Brooks said. "The facts are clear, and the facts are very disturbing."
Brooks said Monroe County's pension costs will double from $19 million in 2010 to $40 million in 2013. By next year, the city of Rochester's total revenue from property taxes will go to fund schools and pensions, said Mayor Thomas Richards.
Richards warned that because of the pension costs "the quality of life will be gone long before the pensions are gone."
The growing pension expenses have prompted some municipalities to borrow off the state pension fund to cushion their annual payments. About $200 million was amortized this year by 162 entities that have public employees, according to the state Comptroller's Office. That's up from nearly $44 million in 2011.
Monroe and Rockland counties and the city of Yonkers each borrowed about $8 million to pay its pension obligations this year. Westchester Medical Center borrowed nearly $14 million.
Roach said borrowing to pay for pension costs is bad fiscal policy, but an indication of how serious the problem is.
"The road to hell is paved in amortizing pensions," he said. "All you are doing is taking a current operating cost and pushing it down the line."