WPCNR ALBANY ROUNDS. By John F. Bailey, and The New York State Office of the Comptroller Press Office. September 22, 2009 UPDATED 6:10 P.M. E.D.T.: The City of White Plains faces a WPCNR-estimated $2.5 Million increase, (a 7% increase in property taxes) to $10.6 Million in the city contribution to the New York State Employee Retirement System and the state Police and Fire Retirement System payable in part in 2011-2012, according to new rates issued by the State Office of the Comptroller Tuesday. The announcement of the new rates was long expected and warned of by the Comptroller’s Office previously.
The White Plains City School District will face a projected payment of $12,138,000, an increase of $4.5 Million in Retirement Benefit contributions, if its pension contribution increases at the same rate as the rates applied to municipalities. Those payments from the School District would come due to the state in 2011-2012, and based on present numbers would require a 3% property tax increase. Fred Seiler of the school district said, though the percentages for the school district have not been issued yet by the Comptroller’s Office, the increase would be budgeted for in the 2010-11 budget year.
State Comptroller Thomas DiNapoli held out the possibility of cities and municipalities “amortizing” the 11.9% increase in the Employee Retirement System (for Civil Service Employee Association members)and the 18.2% increase in police and fire contribution. The Comptroller’s news release did not provide an indication of how much relief in postponed payments cities could expect.
The White Plains City School District pays into the Employee Retirement System and the Teachers Retirement Fund, and those percentages have not been calculated yet by the Comptroller’s Office. The district is paying 7.63% and 7.90% of its $102 Million in salaries into the Employees Retirement System and the Teachers Retirement System in the current 2009-10 school budget.
The news release from the Comptroller’s Office stated the increase in pension fund contributions is required because state retirement fund assets declined in value 26.3% at the end of the state fiscal year, 2008-2009.
What this may mean to White Plains.
Assuming union increases of 4% retroactive to this year and in effect next year as a result of voluntary binding arbitration talks, total salaries will top $36.2 Million for the police and fire services at the close of 2010-11, and salaries for the Civil Service Employees Assocation and Sanitation workers, $27.1 Million.
Applying the 11.9% increase to the Employee Retirement System contributions from the CSEA and Sanitation union projected salaries, the city would owe about $3.2 Million to the state in 2011-12 .
Taking the police and fire handle which by 2011-12 will, based on local average wage settlements approach $36.2 Million (up from $33.5 Million in 2009-10) and figuring 18.2% of that WPCNR comes up with a ballpark figure of $6.6 Million contributed on behalf of the police and fire employees.
This creates a total pension fund contribution based on union salaries of about $9.8 Million.
Assuming no increases in Commissioner, elected officers, and managerial salaries, the pension contribution bubbles up to $10.6 Million, $2.4 million more than the city is paying this year. That is equivalent to a 7% property tax increase in 2011-12 alone, unless the city is able to amortize a portion of it, as Comptroller DiNapoli suggests.
Meanwhile, at 5 Homeside Lane
Meanwhile over on the other side of town, where the school district has a payroll now of $102 Million that will go up to approximately $105 Million by the end of 2011, assuming the pension fund contributions increase is 12%, the district will face about a $12.6 Million pension fund contribution, up $4.5 Million from the present annual contribution of approximately $8 Million. (In the 2009-2010 current school budget, there is no isolated line stating the current actual contribution,only the percentage of contributions to the State Employees System and the Teachers Retirement System. )
The school district would face a 3% property tax increase, assuming property assessments stay the same, if pension contributions in 2011-12 were pegged at 12%– the same as the Employee Retirement System.
The State Numbers.(From Comptroller’s News Release)
The New York State Comptroller’s office announced Tuesday that the employer contribution rates for the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS) will increase in 2011. The impact of the global recession on the $116.5 billion New York State Common Retirement Fund (Fund) will drive the average ERS rate up to 11.9 percent (up from 7.4 percent in 2010). The average PFRS rate will be 18.2 percent (up from 15.1 percent in 2010).
Despite the Fund’s negative 26.3 percent return for the fiscal year ended March 31, 2009, the Fund remains one of the strongest, most secure public pension plans in the United States, the comptroller’s office said.
“While the pension fund has handled the market collapse better than most other public funds, there is no question that it’s been hit by the crumbling economy,” State Comptroller Thomas P. DiNapoli said. “The Retirement System’s Actuary has determined that employer contribution rates have to increase. In the past, when the market performed well, the rates decreased. Similarly, when the markets perform poorly, the rates have to increase.
Amortization Suggested to Ease the Pain. No details.
“We must give local governments the tools they need to manage through these tough times, and we must enact reforms that will give taxpayers a break. For the short term, I’ve offered a proposal to mitigate the impact of higher contribution rates on state and local governments by allowing employers to amortize a portion of the increased costs over time, which will provide government employers with tens of millions of dollars of budget relief while ensuring the Fund remains strong. I will work with the Governor and the Legislature to address the challenges facing local governments.
“The more difficult challenge is to address the long-term costs. One positive sign is the agreement reached between Governor Paterson, the Civil Service Employees Association and the Public Employees Federation earlier this year. Once this agreement is enacted, it could save state and local governments an estimated 19 percent in future contributions for each new employee. These pension reform discussions need to continue with all parties to help protect taxpayers and the Fund for years to come.”
The Comptroller’s office mailed letters to State and local government employers yesterday, informing them of the contribution rate increase for 2011.
Click here to view the Fund’s historical employer contribution rates.
Mayor’s reaction to rate increase.
Mayor Joseph Delfino was reported by Aman Ali of The Journal News this morning as having this to say about the Comptroller’s Office pension increases:
“I’m hoping more revenue will begin coming into our communities between now and next year. I’m not saying the recession is anywhere near over. But the trends are looking good, and the comments from Washington are saying that it’s getting better…There’s ways to find money,and people just have to look harder.”
