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NOT MUCH REFORM
DELAYING PENSION CONTRIBUTIONS WON'T HELP ERIE COUNTY OR BUFFALO AVOID BUDGET GAPS

Erie County dodged a bullet last week, in much the same way Butch Cassidy and the Sundance Kid did in the minutes before the 1969 movie ended: briefly.

For those unfamiliar with the outlaw classic, the bickering bandits escaped a fusillade only to race into another which, viewers are left to presume, blew them to smithereens. That's more or less the fate that awaits the Erie County budget in February unless something else changes.

The immediate issue is $50 million the county was going to have to pay into the state pension fund in December. Together with other expenses, the liability was going to blow a $70 million hole in the county budget. Earlier this month, though, state legislators voted to let all of the state's municipalities off the pension hook -- until February. Then the guns go off.

The advantage, such as it is, is that the change moves the due date into the next fiscal year, but that's assuming that, like Erie County, your fiscal year matches the calendar year. Buffalo's begins July 1. That makes the change about useless.

The change is also dangerous, because in addition to postponing payments, the legislation also permits municipalities to borrow over 10 years to cover some of the costs. This is hair-of-the-dog therapy for municipalities that are already struggling to meet expenses, and none is worse off than Buffalo, under the authority of a financial control board and already borrowing money to cover routine costs.

The problem traces to pension enhancements approved in Albany in 2000. With the stock market riding high -- it crumbled only months later -- state officials approved annual cost-of-living increases that seemed to carry no public expense. Some increase may have been merited, but the public today is groaning under the weight of these pensions. Yet Albany, which authored this problem, is content to do nothing more than allow municipalities to borrow and delay payments. More is needed.

Specifically, Albany needs to require the uniformed services -- police and fire -- to contribute to their own pensions, as do other municipal workers. Today, those costs are funded by taxpayers. And the state needs to create a new, lower cost pension for future employees.

That will be a painful process, but there is a painful truth to accompany it: New Yorkers cannot afford the mess that Albany has created.

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