After his stint in Washington running the Department of Housing and Urban Development, it is easy to guess that Andrew Cuomo would rather live in the White House than in the New York State House.
If this is true, his pension reform battle might be his most important initiative yet.
The governor has done a tremendous job in the 14 months since he took office and has restored the confidence in Albany that has long been missing. Much of what he has accomplished will look tremendous on the résumé of a presidential candidate. His disregard for any rational policy on rent regulation can be excused when looking at what could an effort to beef up a presidential résumé since no one in Idaho is going to care what happens to New York’s rent welfare recipients. However, everyone in the country will be able to relate to how the governor handles pension reform. How he performs on this critical issue will say a lot about his credentials to be the commander-in-chief.
We have all been reading, for far too long, how public-sector union pensions are on a crash course caused by unsustainable dynamics. The math is very simple. If you take in $1 and pay out $2, ultimately what you have in the bank today evaporates.
Because what has been in the bank has been a large number, it has allowed legislatures to kick the proverbial can down the road and leave the tough decisions for the next guy. However, the time has come when the burden of these pensions is starting to divert resources away from critical areas such as schools, police, libraries, firefighters and ambulance response times.
During the past 10 years, pension obligations in New York have ballooned from $1.7 billion to $12.5 billion. This is an increase of over 700 percent and there is no end in sight. In New York City for instance, these payments to retirees represented just 5 percent of all operating expenses in 2002 but today represent more than 16 percent of the total budget.
Last week, Assembly Speaker Sheldon Silver totally dodged the issue of having to deal with this critical issue by saying that the governor had to singlehandedly work out a deal with the unions. The Legislature gave these benefits (which are intentionally left out of the collective-bargaining process) yet the speaker does not want anything to do with altering them.