NYC pension costs will go down, then way up under state budget bill

New York City’s short-term pension costs are expected to decrease under a state budget bill that re-amortizes required payments over the next five years. The change is intended to provide up to $2.2 billion in savings while the city faces a projected $5.4 billion deficit. At the same time, state lawmakers are approving enhancements to the 2012 Tier VI retirement law that increase public pension benefits. Those Tier VI changes add $123.3 million each year to New York City’s costs and about $551 million annually across state and local governments. Over the next decade, re-amortization adds $7.6 billion and Tier VI adds about $1.4 billion, raising concerns about long-term fiscal stability.

"New York City’s short-term pension costs will fall under a state budget bill set to pass Tuesday, but changes championed by Mayor Zohran Mamdani will increase the tab by billions of dollars for the next decade. Mamdani sought approval from state lawmakers to push off—or “re-amortize”—some required pension payments during the following five years. The maneuver will let him save as much as $2.2 billion as he tackles a projected $5.4 billion deficit for the next fiscal year."

"At the same time, Albany lawmakers are approving enhancements to the 2012 Tier VI retirement law that will sweeten public pension benefits and cost New York City an additional $123.3 million each year. The pension re-amortization will cost New York City an additional $7.6 billion over the next 10 years. The Tier VI changes will add around $1.4 billion over the same period."

"“We are continuing the habit of increasing costs we can't afford and making our children pay our bills,” Rein said. “This is not the right path to fiscal stability. This is exactly what gets us into problems when we need to get out of problems.” The Tier VI changes will affect more than 500,000 teachers, cops and firefighters, as well as state and local government office workers across New York."

"The Tier VI deal prompted cheers from public-sector unions and groans from associations that represent cities and towns. Both Democratic and Republican lawmakers said they were su—"

Read at WRVO Public Media