ALBANY – New Yorkers are living longer, which is good news for the state’s 19.7 million residents. For Gov. Andrew M. Cuomo, it’s triggering a budget headache.
The longer lives raised the $176.8 billion fund’s liability, boosting the 2016 pension bill to $355 million more than Cuomo had projected.
The added cost has Cuomo tapping a program allowing the state and its municipalities to borrow part of their annual pension bill from the fund with interest. Since 2011, Cuomo has used the tool to defer about $3.2 billion in payments. While he’d planned to exit the program in 2016, the budget he introduced last month includes borrowing $395 million for that year.
“Amortization takes volatility out of the state’s pension contribution costs and helps us maintain stability,” Morris Peters, a spokesman for Cuomo’s budget division, said via email.
Since Cuomo took office in 2011, he’s closed more than $12 billion in budget gaps, capped annual spending growth at 2 percent and won the state’s first four consecutive on-time budgets since 1977. The moves spurred Standard & Poor’s to award the state a AA+ mark in July, its highest since 1972.
Yet the company also said the pension borrowing is swelling the state’s unfunded retirement liability.
And what's the goal of creating unfunded retirement liability?
Destroying the public pension system, of course:
While only seven states had stronger pensions than New York as of 2013, its funding ratio isn’t as robust as it once was. The fourth-most-populous state had 87.3 percent of assets to meet obligations, down from 105.9 percent in 2008, data compiled by Bloomberg show.
See the trajectory?
From 105.9% of assets to meet obligations in 2008 to 87.3% now.
Sure, there was the Great Recession during that time frame, but that economic downturn ended years ago and Cuomo's still draining the pension system of strength.
See New Jersey for what happens when governors underfund pension systems.
An accident that the NY pension system has been drained during King Andrew I of Wall Street's reign?
It's classic neo-liberalism.
Create the problem (underfund the pension system), set hair on fire over the problem (scream long and loud that the pension system is going broke), declare that we simply MUST make changes (i.e., cut pensions for current and future employees, retirees), repeat until system is busted