DiNapoli: Signs of fiscal recovery emerge
State Comptroller Thomas DiNapoli says he sees a flicker of light at the end of a long tunnel for local governments struggling with higher payments for employee pensions.
Tax revenue makes up whatever funding needed for the system that does not flow from investment returns. So when the system's holdings plunged a whopping 26 percent in the state's 2008-09 fiscal year, municipal budgets had to start making up the loss.
But the most recent state fiscal year ended Sunday on an up note for equities -- which make up more than half of the pension fund portfolio. Local governments pay into the retirement system based on investment returns from the previous five years. The previous three years came in with returns of 24, 14 and 6 percent, officials said. The latest year, still to be audited, looks strong.
The five-year calculations to be issued in the fall will be the last to include the 2008-09 crash -- after which local-government payments could begin to wane.
"We certainly said all along with regard to the pension fund that it would take us five years to work through the losses of 2008 and 2009 when the market tanked," DiNapoli said Friday. "We don't have audited numbers yet . . . but with markets at a pre-2000-level high and a great deal of the portfolio still in public equities, it appears to be a good year in terms of positive results."
Politically, this uptick could curb the perceived urgency of some advocates' demands that defined-benefit pensions give way to 401(k)-style plans. For his part, DiNapoli, sole trustee of what's officially called the Common Retirement Fund, said that while his office always viewed the spike in contributions from governments as temporary, rates "are not going to drop overnight."
GRIM WARNINGS: With nine months to go as New York City mayor, Michael Bloomberg has made it a bit of a habit to say citizens will die if he isn't heeded on legislation. His national push for expanded background checks for gun buyers is but one example. A bill he opposes for a new NYPD monitor "will put the lives of New Yorkers and our police officers at risk," he asserted. When a court voided his big-soda ban, Bloomberg warned that "people are dying every day" from obesity. And when his proposal for speed-tracking cameras failed in Albany, he suggested calls to state lawmakers after future accidents to ask why they allowed children to be killed.