(February 23, 2012) — New York Governor Andrew Cuomo has said that he would be willing to take the risk of a government shutdown to create a cheaper pension system.
“It is one of the seminal clashes of this budget and of my administration,” Cuomo told reporters, as reported by the Wall Street Journal. “The question is, does this body, does this government, does this Legislature perpetuate a pension system that is on the verge of bankrupting the state … or does the Legislature respond to the needs of the people?”
He continued: “That’s what this session is about, in my mind. It’s not the executive versus the legislature, which I think is personalizing it, it’s the special interests against the people.”
Cuomo could refuse to accept a budget from the Legislature that excludes a pension proposal. He could then include his changes in an emergency “extender” budget bill after the budget became late, after the April 1 due date, according to the WSJ. It would then be up to the Legislature to accept or refuse the plan and shut down government.
This is the first time that Cuomo has threatened an all-inclusive budget extender if a spending plan that he agrees on is not enacted on time.
In January, New York City Mayor Michael Bloomberg revealed that with pension costs skyrocketing and straining New York City’s budget, state legislatures should support Cuomo in creating a new pension tier for future municipal and state workers. The mayor voiced praise for Cuomo’s $132.5 billion executive budget plan — giving specific approval for the governor’s plan to introduce a new Tier VI pension system for new hires. According to the mayor, the city’s pension costs were $1.5 billion when he first took office and are now roughly $8 billion annually, or 12% of the city’s budget.
According to the mayor, the new pension tier would save the city $30 billion over 30 years without costing current workers anything. “Unless we enact sensible reforms now, our pension costs will keep growing and keep diminishing our ability to pay for schools, libraries, parks and other essential services, or to limit an increase in taxes,” said Bloomberg in his testimony on the governor’s executive budget and reform plan.
Read aiCIO‘s investigation of New York City’s underfunded pension system.