NY Pension Scheme: I’ll Gladly Pay You Tomorrow for Work You Do Today

March 14, 2013
By

lockboxcuomo

New York has a new public pension scheme in the works. It works like this, we pay less or much less now and give people IOU’s for the rest. Unfortunately, the IOU’s will have to be made good in ten or twenty-five years from now by the future local government and school taxpayers.

Of course there is no plan for future relief. There never is when we kick the can.

Remember Wimpy, “I’ll gladly pay you Tuesday, for a hamburger today.”

Governor Cuomo’s pension “smoothing” plan,“ is also known as the “Stable Rate Pension Contribution Option.” [Don't you love these words?]

Cuomo proposed in his 2013-14 budget to let local governments and schools pay a fixed flat rate for pension costs over the next 25 years—rather than deal with the expected spikes over the next few years. Instead of paying the amount needed, they will put IOU’s in the lock box for the amount not paid. That worked for Social Security (irony here).

This isn’t an original idea. Back in 2011, Obama started this with federal pension plans.[redstate]

It reminds me of the interest-only home mortgage loans which helped further the mortgage crisis. In fact, Cuomo was the head of HUD during the subprime mortgage crisis. He pushed banks into giving home loans to people who could ill afford them. Now he will do the same for public pensions. People won’t see the huge tax increases which would realistically show the magnitude of our problem.

What does Cuomo care? He only needs a few years until he can run for president.

This scheme completely changes how we pay pensions.

The state Senate has their own version which includes the state pensions. If Cuomo can do it, why not them.

The pension smoothing plan can go forward unless they see the light.

The money not put into pension plans will be used for, guess what….MORE SPENDING!

I have a better idea – why don’t our fearless leaders stop spending and start cutting expenditures to deal with our debt. I don’t see how much more they can tax us.

Full Story at the Empire Center for NY Policy and at Citizens Budget Commission

Tags: ,

Email Newsletter

The newsletter is mailed out every two weeks.