Submitted by George Spitz, Feb 12, 2007 04:51

Governor Spitzer may seize the initiative by forcing new Comptroller DiNapoli to reform the pension system by restricting state and local government contributions ($2,782.1 million in 2006) to the same amount as government employees ($241.2 million in 2006). The benefits of equaling the contribution level will include reduced real estate taxes for county, city, town governments and school districts

In 2002, the state and local government contributions amounted to only $263.8 million. Poor pension fund investment policies by disgraced former Comptroller Alan Hevesi encouraged by lack of oversight by Governor Pataki and the dysfunctional state legislature; were largely responsible for the more than tenfold payment increase to the $2,782.1 million in 2006. The $142.6 billion pension fund assets as of March 31, 2006 could easily have sufficed to pay the $6.15 billion in current annual retiree benefits if invested in good safe bonds paying an average of 4.28% interest

DiNapoli can make amends for lack of oversight from his position on the Assembly Ways and Means Committee of Hevesi's disastrous investment policies, much in risky speculative ventures. Hevesi's stewardship of the pension fund was not only bad for the New York State budget but also for county and municipal governments forced as a consequence to raise real estate taxes and/or reduce services. The new Comptroller should be guided very carefully by Governor Spitzer but if he doesn't the governor will be able to force his hand by insisting that state and local government contributions to the pension fund not exceed what the employees pay.

George N. Spitz

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