Did Cuomo insert a weasel clause in his tax cap?
What balanced budget? Will more taxpayers flee?
Weasel out ~v. to back out of a situation in a sneaky or cowardly manner
The pension funding tax increases faced by schools due to Comptroller DiNapoli's decrees that were reported previously on this blog in Smoke And Mirrors As DiNapoli And Cuomo Hide Pension Costs While Schools Will Need Contribute 54% Of Salary To Pension Funds, are now being reported for municipalities. New York State Comptroller Thomas DiNapoli decrees state and local governments will cough up more money for their workers' pensions. The average contribution rate to the state pension fund for public workers will rise from 16.3 percent of salaries to 18.9 percent. The average for the police and fire retirement system will rise from 21.6 percent to 25.8 percent. The Comptroller admitted that "the Common Retirement Fund has had two consecutive years of strong investment returns. However, we are still incorporating the market loss of 2008-09 into our employer contribution rates." The Comptroller continued with, "It's true the contribution rates are going up and that's a consequence of the severe market decline in 2008 and 2009, but the good news is that we're on the road to recovery, and if you look at the long history of the fund, we've always weathered difficult economic times — we'll get through this tough time as well,"
Local taxpayers discover Cuomo inserted weasel clauses in his local property cap so that schools and "municipalities could pass some of the higher pension costs on to property taxpayers because the state's new property tax cap has an exclusion for part of the pension hikes." And so Cuomo has an excuse which he forgot to mention when he was prancing about congratulating himself on not raising taxes. "The Cuomo administration argued the exemption balances out the damage done by the 2008 financial crisis, which made less pension fund money available. With less money from the fund, localities are forced to fill the gap."
Now, hold your wallet really tightly
Cuomo forgot to include in his NY State budget increasing state worker pension contributions by 3.6%. Now, add this to the judges' raises Cuomo's committee will add today at their final meeting.
[Link to judges' salary and Cuomo.]
When will Comptroller DiNapoli and Cuomo tell us that NY State, its schools and local governments need to fund their retiree health benefits of $56.3 Billion In Presently Unfunded Liabilities. Bye, bye, Cuomo's balanced New York State budget.
If you think this local tax increase is bad, wait till you discover that these increases are based upon Comptroller DiNapoli's lowering the promised safe rate of return on pension investments from 8.0% to 7.5%. Luckily, DiNapoli and Cuomo are running public pension plans where the federal law allows an assumption of an 8.0% or 7.5% return on investments without criminal penalties and joining Madoff in prison does not result. A real safe yield rate for private pensions would be the US Treasury 10 year rate of 1.99% to 2.16%. Such a safe rate would mean the increases in pension contributions required could be calculated from DiNapoli's present increase based upon a rate reduction from 8.0%-7.5%=0.5% to a true safe rate reduction of 8.0% -2.0% = 6.0%. Since 6.0% is 12 times 0.5%, the required pension contributions should be 12 times DiNapoli's present increases. Or, 59.5% of salary for public workers and 72.0% of salary for police and fire.
The taxpayer wagon trains will be forming in your community soon. Texas, Florida or Wisconsin or bust.
See New York Exodus As Tax Payers Flee At The Highest Rate In USA