State pension scandal a costly one - for us

We do not believe this is merely a case of innocent mistakes or misunderstandings," the New York State attorney general's office was saying last week.

"We have reason to believe there have been long-term and multiple acts of fraud committed upon the state pension system and related to intentional misclassifications of contractors as employees so they could receive taxpayer-supported benefits."

We've been played, neighbors.

The school districts told us they needed that tax money so our kids can get a good education. The municipalities told us they need that money to provide us with services. What they didn't tell us was that they were raking off some of our money to subsidize benefits for people who didn't earn them.

"The pension system was set up to help the snowplow operator, who does necessary work at not great pay, and these other people are hitching a ride," said E.J. McMahon, director of the Albany-based Empire Center for New York State Policy, a pro-business think tank. "A lawyer in private practice is assumed to have the resources to take care of himself."

The system is rife with abuse, he said, because "most people think of it the way they think of an insurance company: You put in a claim and it gets paid. But there is a public cost."

A public cost. This means you.

First came Newsday's reports about private lawyers, who were not content to collect only taxpayer-funded retainers and fees from school districts. They persuaded the districts to report them as employees, too, and the districts used your money to pay the pension contributions.

Nearly one-fifth of all school districts on Long Island - maybe more, since investigations are ongoing - closed their eyes and went along.

As a result, taxpayers were sucked into guaranteeing state pensions for a group of attorneys, plus health benefits. Hmmm.

Wonder if voters (in all but two) of the 23 districts so readily would have approved increases in their school property taxes year after year, decade after decade, had they known. And what will voters do next month?

I've heard from residents - and a few school board members - who read about shenanigans in their districts and went to board meetings to get some answers. The boards, they say, don't seem to know - or want to tell - what's going on. Who's on the payroll? Who was responsible for putting them there? Residents have ample reason to demand answers.

But the gravy train to a state public pension didn't just hit school districts. It included stops at town, village, library, special districts and Nassau County, all of which reported lawyers as employees, often full-time, when records showed they didn't always work full time.

The mind boggles at what will be uncovered by federal, state and county agencies that started their own queries after reading Newsday's reports.

Could lawyers be the tip of the iceberg?

Last week, state Comptroller Thomas DiNapoli announced new regulations under which any lawyer, physician, engineer, architect, accountant or auditor working under a contract is presumed to be an independent contractor, not an employee.

The rules should clear up any ambiguity. Still, what has the comptroller's office been doing all those decades?

Tax money funds employers' contributions to the pension plan, the cost of which has been growing. Tax money funds health benefits. And in New York, unlike most states, taxpayers guarantee that state pensioners are paid in full, even if the stock market crashes.

Even if your private employer kills your pension.

Even if your 401(k) is toast.

And you wonder why taxes keep going up?