Back in January, the Tax Foundation ranked New York 49th in business tax climate, a dubious distinction that has ties to the significant costs of unfunded state mandates that flow from municipalities and school districts and ultimately land in taxpayer’s laps.
New York’s pension burden, second highest in the nation, contributes significantly to these costs.
New Yorkers pay $574 a year in taxes for public employee pensions, more than twice the national average. Independent analysis by the Citizens Budget Commission shows the mandatory contributions by the State for public pensions increased 300 percent from 2004 to 2011, with no signs of slowing down.
Consider also that public employees only cover 11% of the contributions into the pension fund, while the taxpayers pick up the rest of the tab – both higher than the national average and second among the ten largest state-run pension systems
Simply unaffordable and unsustainable.
Which is why NFIB strongly supports the establishment of a new public employee Tier VI within Governor Cuomo’s 2012-13 Executive Budget proposal. Tier VI has the potential to save over $120 billion over the course of the next thirty years, making substantial long term relief attainable!
New state employees enrolled in Tier VI will have the option of a portable defined contribution plan, significant for the changing needs of tomorrow’s workforce, and for the predictability of future pension costs. Other changes, such as ending the use of overtime earnings to pad pensions, will ease the burden on taxpayers and begin to generate sustainability.
Unfortunately, some in Albany prefer the status quo or perhaps cater to their own self interest. Publicly, I have called out Comptroller DiNapoli for putting his self interests before the needs of taxpayers.
Those that oppose pension reform, like the Comptroller, are saying it is an “attack on public employees”. This is simply a blatant distortion of facts. Is allowing portability and personal financial management for future public employees unfair? Doesn’t the future state workforce deserve the chance to choose which retirement plan works for them?
This debate is far from over, but the shouting for mandate relief has been continuous for months and the taxpayers and business owners of New York need action now.