Cuomo escalates pension battle

ALBANY -- Gov. Andrew M. Cuomo escalated his fight to overhaul New York's pension system Monday, trying to force the Legislature to adopt his proposals and sparking a clash between business groups that support him and public employee unions that oppose him.

The biggest municipal employee union hoisted a giant inflatable pig on the Capitol steps -- saying it portrayed "greedy Wall Street" types who would benefit most from Cuomo's proposal to reduce pension benefits for future government hires.

But Senate Majority Leader Dean Skelos (R-Rockville Centre) suggested that a compromise could be emerging. It would involve the governor abandoning his idea that new workers be offered a 401(k)-style savings plan instead of a traditional pension.

"Right now, the governor is having ongoing discussions with different labor unions," Skelos said. "We don't exactly know what it's going to be at this point, but I believe we will have pension reform."

Cuomo has demanded that lawmakers adopt a less lucrative pension plan for future public workers as part of the 2012-13 state budget. But the Democratic-led Assembly and the Republican-led Senate omitted the pension plan from budget proposals unveiled Monday.

In response, Cuomo ratcheted up the rhetoric. He again warned that they must include some form of his pension plan in the state budget that must pass by April 1, the start of the fiscal year. If they don't, he will submit emergency spending bills containing the pension plan. That would give lawmakers the choice of accepting Cuomo's plan or shutting down state government.

"If we don't have pension reform, I'm not going to pass the budget. Period," Cuomo said in a radio interview.

"If you don't have pension reform, you'll be laying off thousands and thousands and thousands of public employees," Cuomo said. "And you'll be raising taxes."

Cuomo's threat coincided with the launch of a new ad campaign by the Committee to Save New York, a business-funded group that has spent more than $10 million supporting Cuomo's agenda since he took office last year. The ad urges viewers to "tell your legislator to support Governor Cuomo's plan" to "rein in soaring pension costs."

The AFL-CIO, which strongly opposes any pension reductions, reacted with its own ads. The umbrella labor group had shut down its campaign last week.

"The ads ask New Yorkers to stand-up to Wall Street and to stop the attack on pensions," the AFL-CIO's Ryan Delgado said in a statement. "Wall Street greed, not the pensions of hardworking New Yorkers, collapsed our economy, yet through [pension reductions], the middle class is asked to pay the price once again."

The American Federation of State, County and Municipal Employees inflated a giant, cigar-chomping pig in the shadow of the Capitol -- dubbing the likeness "1%" in a reference to Occupy Wall Street protesters who say they represent 99 percent of the population.

Unions also accused Cuomo of holding the legislative redistricting process hostage in the pension talks. The legislature redraws Assembly, Senate and congressional districts after each decennial census.

"He says [the pension debate] is about politics and not the merits. We agree," Steve Madarasz of the Civil Service Employees Association said of Cuomo. "It's about his politics." Because Cuomo is "not getting any traction in the Legislature," on pensions, he is using redistricting as leverage, Madarasz said.

Skelos and Assembly Speaker Sheldon Silver (D-Manhattan) disagreed that the issues are intertwined.

"I don't think so," Silver said Monday. "It hasn't been communicated to me."

In suggesting that a pension compromise could be at hand, Skelos said "movement is away from" Cuomo's idea to offer new workers a 401(k)-style savings plan. Cuomo has said recently that he's "flexible" about the proposal. Skelos thinks there is support for limiting overtime pay for pension calculations, increasing the retirement age and the years of service required for vesting.Even if Cuomo's proposal is adopted this year, cities, towns and villages won't realize a significant impact for almost 20 years. For instance, Glen Cove would save $15,670 in pension costs the first year, but annual savings wouldn't hit $1 million until 2030, according to Newsday calculations based on information provided by the Cuomo administration.

Cuomo's new plan:

Gov. Andrew Cuomo's pension proposal for new workers would:

• Raise the retirement age to 65 from 62

$113 billion over 30 years: Amount he says it would save state and local governments. Most of the savings would come in later years and the projection does not account for inflation.

Source: Governor's office; Office of the State Comptroller