Pataki Veto For 25/55 Early Retirement Bill;
Mayor Said Measure Had $100M Cost; Unions Protest

By REUVEN BLAU

Governor Pataki July 19 vetoed a bill that would have allowed all nonessential state and city workers with 25 years of service who are at least 55 years old to retire with full benefits.

GOVERNOR PATAKI: Cites cost, service impact.

Mr. Pataki called the measure, which had broad union support, poorly constructed and too costly. "At a time when New Yorkers continue to bear the tax burden associated with ever-increasing pension costs, I am unwilling to approve this costly new benefit," his veto message stated.

Mayor Bloomberg "strongly opposed" the bill, noting that it would have cost the city more than $100 million a year if enacted.

Claim Long-Run Savings

Advocates of the measure, which was overwhelmingly passed by the Senate and Assembly, contended that it would help the state reduce future costs by creating a younger work force that is paid far less money.

The unions lobbying for the bill blasted Mr. Pataki's decision. "Instead of signing legislation that would benefit working families, the Governor instead chose to serve his own interests," charged Danny Donohue, the president of the Civil Service Employees' Association.

DANNY DONOHUE: Harsh words for Pataki.

The CSEA maintained that the measure would have reduced payroll enough to offset the costs, which were pegged at $20 to $25 million in the first year, according to the union. The legislation was also backed by District Council 37 and the United Federation of Teachers.

Mr. Pataki also voiced concern that it would allow workers in critical public health and safety titles to retire because the bill lacked specified language excluding those employees. "Contrary to sound public policy, this bill would permit virtually all public employees who meet certain basic requirements to leave public service quickly and in large numbers, without any mechanism to allow public employers to manage such loss and maintain critical services," his veto said.

After his annual budget address, Mr. Pataki submitted his own early-retirement bill to the Legislature that targeted specific employee groups. That measure, however, was tied to legislation expanding charter schools, which the democratic-controlled Assembly opposed. The bill was never voted on in the Assembly.

MAYOR BLOOMBERG: Feared losing 'mentors.'

The unions contended that Mr. Pataki's legislation would have mainly benefited his friends in government. They successfully urged the Legislature to pass a more-inclusive measure, which would enact a retirement incentive for all workers during specified periods in both 2006 and 2007.

UFT 'Disappointed'

"We are disappointed the Governor vetoed this important legislation," said UFT President Randi Weingarten in a statement. "We also think it is very interesting he would find 55/25 okay when connected to a bill on charter schools, but not by itself."

She noted that research shows that Teachers' careers generally span 25 years and "creating an incentive that recognizes that would be a wonderful way to keep quality Teachers."

The UFT, she added, is working with city negotiators via a contract-created pension committee to create a similar early retirement program for its members "as long as it is cost-neutral."

Labor Commissioner James F. Hanley declined to discuss those negotiations. "We are always hopeful," he remarked.

Anthony P. Piscitelli, the city's Legislative Director, pointed out that many experienced Teachers would have been eligible under the proposed bill. "The city's most senior Teachers provide an invaluable service to the students they instruct and are, in many ways, mentors to younger, less-senior Teachers," his drafted letter on behalf of Mr. Bloomberg to Mr. Pataki said. "Their absence in the classroom is sure to reverberate throughout the public school system. Such a scenario should be avoided at all costs."

Mr. Bloomberg also argued that the legislation would create "an unfunded mandate in the form of higher employer contributions to the affected pension systems at a time when the non-discretionary portion of the city's budget continues to rise."

Questioned Estimate

According to the legislation's fiscal note, it would have cost the city a total of $11.5 million next year, with a $5.7 million outlay to the New York City Employees' Retirement System, a $4.6 million cost to the Teachers' Retirement System, and a $1.2 million expense to the Board of Education Retirement System.

Mssrs. Bloomberg and Pataki questioned that fiscal projection. "It is unclear if the methodology utilized contains a major component leading to increased costs - health insurance," Mr. Bloomberg said. He recommended that the City Actuary review the bill to ascertain a more accurate cost estimate relating to the city's liability.

Another major flaw in the measure, he contended, was that it lacked the traditional provision allowing localities to "opt-in" to the incentive. That provision would allow municipalities to target certain titles that were deemed worthy of consolidation or elimination.

Early retirement plans are hugely popular with veteran civil servants. Union offices have been deluged with calls from members seeking additional information and updates on the measure's status.

A One-Way Benefit?

City officials, however, have argued that early retirement is not a panacea. Many veteran city workers wait until an incentive is offered to retire, they pointed out. Other older employees who take advantage of the incentive were planning to retire anyway, they said.

The vetoed bill, however, would have only reduced the age and years of service needed to retire without penalty and does not offer them an incentive, such as added service credit.

The unions argued that it will eventually save the city money, because more veteran workers at top pay will retire and be replaced by employees who are paid far less money. Most new Teachers earn $41,172, while their veteran counterparts can receive as much as $90,000. Each year, the State Legislature passes a broad bill which gives every municipality the option of offering a retirement incentive plan to its workers should the locality deem the move necessary.

 The last early retirement incentive for city and state workers was offered in 2002 when they were facing severe budget cuts. The incentive has traditionally been used to cut jobs while averting layoffs.