New York State municipalities are suffocating under the weight of local pensions.
The solution? Defer and delay, rather than deal with the problem now.
From The Ithaca Journal, Borrowing for pension costs soar in N.Y.:
Local governments and the state increased borrowing off the state pension fund to pay yearly retirement costs by 22 percent between 2013 and this year, state records show.
As pension costs soar, 133 municipalities deferred $472 million in retirement obligations this year — a record amount, data from the state Comptroller’s Office showed. Last year, 139 employers borrowed $368 million.
Local governments said they had no choice but to enter the state’s amortization program, which allows them to essentially borrow off the state’s $161 million pension fund to pay the ongoing expense with interest over as many as 12 years….
Local governments readily admit that delaying pension costs, plus interest, isn’t great fiscal policy. They said, though, they have no alternative as they grapple with limited revenue, growing bills and a property-tax cap that restricts how much they can raise in new money.
Elmira Mayor Sue Skidmore said she’s lobbying the state Legislature to pass a law so the city can borrow through the bond market to pay its pension tab. It’s borrowing about $1.3 million through the pension fund this year as part of its total $4.6 million tab.
“We have zero in economic growth here. Sales tax revenues are down; we’re under the constraint of a tax cap,” Skidmore explained
What possibly could go wrong?