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Pension relief offered to municipalities, school districts

Tuesday, January 22, 2013
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— Savings from last year’s new public pension plan could be realized sooner rather than later under a proposal unveiled Tuesday in Gov. Andrew Cuomo’s state budget.

The governor’s proposed budget, which runs from April 2013 to March 2014, allows local governments and school districts to benefit from Tier VI now, as opposed to decades in the future. By locking in a long-term contribution plan, school districts and municipalities can reduce their pension costs during these rough budget times and see their contribution rates go up slightly in the future.

“I marked that as innovative,” said Assemblyman Peter Lopez, R-Schoharie, who took nine pages of notes during the speech.

“It makes sense to give short-term relief now,” he said, considering the tough budgeting process for schools and municipalities all over the state due to low yield investment funds and decreased local tax bases. “We’re at a spike now [in pension costs], so to the extent that we can reduce that spike and level it out over time … it is less of a rollercoaster ride for taxpayers.”

State Budget Director Bob Megna said in a briefing after the budget was released that the option would be for multiple decades, like 25 years. It would be up to the state Comptroller’s Office to approve any local requests to utilize the plan.

State Sen. James Seward, R-Milford, saw this option as an encouraging step toward real mandate relief, which was absent in the State of the State address earlier in the year. Seward noted that counties also will benefit from the state taking over a third of the predicted growth in local Medicaid costs, which totals $111 million. County governments were only responsible for paying 3 percent of growing costs, but Cuomo and the state Legislature initiated a plan where the state would gradually assume all the increases so counties eventually paid a flat rate.

Assemblyman Phil Steck, D-Colonie, was disappointed with the continued tweaking to the state’s Medicaid system, which he said needed a complete redesign.

“I do not think we can just tinker with it,” he said.

The state budget carves out billions for relief from Hurricane Sandy, but the damage from Tropical Storms Irene and Lee was also addressed. Cuomo promised that hard-hit areas, including Schenectady, Schoharie and Montgomery counties, will be eligible for some of the same assistance going to Sandy victims. These storm relief programs include $2 billion for community reconstruction and mitigation plans.

Lopez said he was particularly interested in buyout and reconstruction parts of the rebuilding effort.

“A quarter of my calls are still flood recovery, so housing is a huge unmet need,” Lopez said.

The challenge moving forward, he said, is making sure people understand they’re still eligible for additional help.

Included in the budget is about $1.5 million for the city of Saratoga Springs and about $500,000 to Saratoga County for hosting the Saratoga Casino & Raceway. These amounts represent about 45 percent of what is owed the municipalities, as they incur costs related to the site, but for local officials there is some relief they’re getting anything. This payment was completely stopped during the worst of the state’s budget crunch and was partially restored for the first time in last year’s budget.

“It is reassuring and settling that it is still in place,” said Saratoga Springs Mayor Scott Johnson, who wishes the funding would be permanently codified to give the city some predictability in its annual budget.

Johnson said he would like to see the current level maintained, with the possibility of full funding in the future, if the state’s budget can afford it.

Cuomo also touted the potential impact of three upstate, non-Indian casinos in 2016 but didn’t offer any specifics about where they might be located. Assemblyman Tony Jordan, R-Jackson, whose district includes the Saratoga Casino & Raceway, said these regions need to be identified so areas that have a racino, like Saratoga Springs, won’t be caught completely off guard.

The budget does include an office of casino gambling regulation that would be involved in selecting operators to run the three casinos.

The proposed budget includes a minimum fine of $50 for first offenders found guilty of using a cellphone or texting while driving. This proposal, in conjunction with new parking and speeding violation penalties, are designed to enhance traffic safety and generate $16 million in revenue for the next fiscal year.

Saratoga County District Attorney James A. Murphy III said the texting fine, which gets bigger with subsequent violations, will discourage drivers from being distracted by their mobile devices.

“This proposal, if passed, will stop people from using their cellphones instead of focusing on driving their 4,000-pound car that they are driving at 55 mph down the roadway,” Murphy said.

The Capital Region could be at a disadvantage in budget negotiations because it lacks the seniority it wielded in recent years. State Sen. Roy McDonald, R-Saratoga, and Assembly members Ron Canestrari, D-Cohoes, Bob Reilly, D-Colonie, and Jack McEneny, D-Albany, have all been replaced by first-year legislators.

Sen. Hugh Farley, R-Niskayuna, is now the most senior member of the state Senate and could be an important voice for the Capital Region. He has co-chaired influential budget committees the past two years and is hopeful about having the same role this year.

 
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