May 11, 2009
Favoring retired teachers over other retirees?
Does Governor David Paterson think retired teachers are more deserving than other retired public employees? Is he serious about his threat to veto bills with "undue impact" on local property taxes?
The answers will become apparent when Paterson signs or vetoes a bill that makes it virtually impossible for school district to make changes in retiree health insurance benefits--unless unions representing current teachers agree to the same changes.
Update: Governor Paterson signed this bill May 12, 2009, according to his office.
Last September, Paterson vetoed a similar one-year moratorium that would have applied to all retired state and local government employees, not just teachers. One of his objections was to lack of local government representation on a study commission.
He since has appointed his own 15-member Task Force on Public Retiree Health Benefits, chaired by Richard A. Berman, president of Manhattanville College. It met for the first time last week. It faces a June deadline to submit its recommendations--or at a date the task force decides on.
In his September veto message, Paterson also said the bill could thwart "legitimate efforts to change retiree health benefits in ways that reflect their unique status, or reasonably improve efficiency."
He pointed out while many retirees are eligible for Medicare, most active employees are not. Yet under this bill, even if a corresponding change in active employee benefits is unwarranted due to their different circumstances, one would have to be made (if possible) before any change for retirees could be effectuated. Further, efforts by a public employer to save retiree health care costs by increasing the role of managed care,or by requiring that certain purchases be made through a network, could also be subject to court challenges as diminutions of benefits. The retired teachers bill poses the same dilemna that Paterson found objectionable last September. The retired teachers bill, first passed in 1994, has been renewed annually. The 2008 version was signed by Governor Eliot Spitzer Paterson.
Under the heading "Fiscal implications for state and local government," the current Assembly bill memo says: "None ".
It ignores the fact that post-retirement health benefits are consuming an increasing portion of local budgets. For example, in 2005-06, the city of Syracuse spent $27 million on health benefits for retired municipal and school district employees--equivalent to 30 cents of every local property tax dollar collected that year.
Last month, Governor Paterson vowed to put "the brakes on the spiraling cost of property taxes by taking a close look at unfunded mandates that are handed down from the State to local governments". For executive order, see here.
At a April 27 press conference, he told reporters "I'm not going to sign any legislation that I think has an undue impact on counties, local governments or taxpayers."
So does that mean Paterson plans to veto the retired teachers bill now on his desk?
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