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Gov. Paterson and unions set to avoid layoffs with pension, buyout deal
ALBANY - Gov. Paterson and the state's two major public employee unions are expected to announce a deal Friday to avoid major layoffs, the Daily News has learned.
In exchange for job protection, the Civil Service Employees Association and the Public Employees Federation will okay a new pension plan with lower benefits for new workers.
A key component is a plan to offer $20,000 buyouts to specific people who have hit state retirement age.
The goal is to target higher-paid employees in an effort to save the same amount that would have been saved if the governor's call for 8,700 job cuts had gone through, the source said.
Although union members will benefit, one legislative source said it was possible some managers will also get the buyouts.
"They're going to use it like they're handing out golden parachutes," the source said of the Paterson administration.
The unions, which Paterson previously blasted for refusing to forgo their 3% raises to help the state deal with its fiscal crisis, agreed to pension changes, sources said.
The new Tier 5 plan would strip many of the pension enhancements added before the economy tanked.
The new tier would restore the minimum retirement age to 62, up from 55, and require a worker to contribute 3% of his or her salary toward pensions for as long as they work, not just the first 10 years.
Workers would also have to wait 10 years, instead of five, to become vested in the system.
Paterson wanted to eliminate overtime from counting in pensions, but the deal would allow up to $10,000 in overtime pay to be factored in, sources said.
Paterson stressed "the state has got to make up for about $300 million." Union officials had no comment.
Getting the unions to agree to Tier 5 would be a big boost for Paterson in his bid to extend it to police and firefighters.
The governor forced the unions' hand Wednesday by vetoing a routine pension bill extender affecting new cops and firefighters
Dems push Employer's Unfair advantage Bill
Two bills quietly moving through the Legislature would make it easier for public employee unions to mount illegal strikes, the Daily News has learned.
One would soften the penalties against unions by forcing employers - including the city and Metropolitan Transportation Authority - to pay up to 50% of a union's lost dues if "extreme provocation" led to the strike.
Another bill makes it easier for unions to block public employers from imposing new rules by eliminating the requirement that unions prove "immediate and irreparable injury."
"Rather than rewarding illegal behavior, our Legislature should make sure that these potentially life-threatening events never happen again," said Matt Gorton, a spokesman for Mayor Bloomberg's legislative office.
The MTA also opposes the extreme provocation bill.
State Sen. Diane Savino (D-S.I.) sponsored the bills, which would alter the state's Taylor Law, which forbids public employee unions from striking.
Savino said her bills would not encourage unions to strike, but would take away an employer's "unfair advantage."
"We wanted to put employers on notice that if you engage in extreme provocation, your actions will be judged the same way the unions will be," Savino said.
Savino said the extreme provocation proposal was aimed at the MTA, saying it provoked the 2005 transit strike by trying to include pensions in the contract talks.
Because of the strike, Transport Workers Union Local 100 had to forfeit the automatic deductions of union dues, costing it about $1.5 million a month. The deductions were restored last year.
A spokesman for the TWU and ATU said passage of Savino's legislation was among the union's priorities.
New York pension loses $44B in a year but payouts are safe, says Controller Thomas DiNapoli
Buffeted by the world economic crisis, the state pension fund took a serious beating in the last fiscal year, plummeting an estimated 26% to just under $110 billion, state Controller Thomas DiNapoli said Friday.
The fund was valued at $153.9 billion on March 31, 2008 - $44 billion more than a year later.
"This investment environment is startling. A loss over the year of 26% is startling," DiNapoli told reporters at his Manhattan office.
While possibly not the bleakest period in the fund's history, "It's certainly the worst year in anybody's memory," he said.
Despite the nosedive, no one drawing on the state Common Retirement Fund is in danger of losing their payouts, the controller said.
"People should not worry that their pensions aren't going to be paid for," he said.
"The challenge is moving forward, how do we ensure that we continue to be a fully funded pension plan."
The state system has about 1 million members - 350,000 retirees and 650,000 who are still working.
DiNapoli refused repeated requests to reveal the performance of a group of firms tied to a pay-to-play scandal during the tenure of his predecessor, Alan Hevesi.
"We [are] dealing with the attorney general's office, the [Securities and Exchange Commission] and our own attorneys," he said.
Therefore, "we have some limitation on what we can disclose," DiNapoli said. "I can't give you specifics on those funds."
The state is already suing one of the firms alleged to have participated in the kickback racket, Aldus Equity Partners LP, for $5 million in fees paid.
He said further lawsuits are a possibility.
DiNapoli is also proposing legislation he says would help towns deal with future pension cost increases by spreading them out over time.
He later drew criticism from fellow Democrat Gov. Paterson, who said increased contributions would have a "devastating" impact on local property taxpayers.
New York City has its own separate set of five worker pension funds.
The value of those funds plunged from $106.1 billion on March 31, 2008, to $77.1 billion a year later, according to figures obtained from city Controller William Thompson's office.
The city funds, which have also done business with some of the financial firms in question, serve municipal and school employees, teachers, police and firefighters.
Despite bailout, MTA still looking at fiscal woes
"Doomsday" may have been avoided but the
Metropolitan Transportation Authority is
not out of the woods yet, according to a state comptroller's report released
Tuesday that predicts a remaining deficit for the agency over the next two years
and alarmingly mounting debt.
The MTA was facing an unprecedented $1.8-billion operating budget deficit this
year when the state Legislature last month passed a rescue package that staved
off large fare hikes and widespread service cuts.
Even with the state bailout, the MTA plans to raise fares 10 percent this month
and 7.5 percent in both 2011 and 2013.
The report by state Comptroller
Thomas DiNapoli says that - while the
Albany bailout should close a two-year, $5-billion operating budget gap - a
$160-million deficit will remain. The report says that amount "should be
manageable" given the MTA's reserves.
DiNapoli's report also calculates that the package of new taxes, fees and
surcharges funding the MTA bailout will generate $1.08 billion this year and
$1.85 billion next year.
A new "payroll mobility tax" on employers in the MTA's 12-county service area -
a levy at the core of the bailout - will cost
Long Island employers $229 million of
the total $1.52 billion generated in 2010, the report says. The comptroller
projects that Nassau employers will pay $122.1 million, while those in Suffolk
will pay $107 million.
The report also warns that "there are budget risks" that could make it difficult
for the agency to manage its budget.
"For example, real estate transaction tax collections continue to fall short of
target, and the MTA has a history of spending more than planned," the report
says.
The comptroller's report also cautions the MTA against excessive borrowing to
fund its capital plan.
Gene Russianoff, spokesman for the Straphangers Campaign, said "this will be the
challenge for us all in the coming months and years - to win funding to meet the
MTA's basic capital needs and to spend that money wisely," Russianoff said.
On the bright side, the report said that as early as 2011, the MTA could realize
budget surpluses, "but much will depend on the economic recovery and the MTA's
ability to realize promised cost savings."
DiNapoli also announced three new audits of the MTA in addition to two audits
already under way.
MTA spokesman Jeremy Soffin said the agency remains "committed to being as
transparent as possible with regard to our finances" and welcomed DiNapoli's
work "in helping to keep the MTA's finances on track as we move ahead."
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