Joe Guilano is a public works inspector in Rome, New York.
0100 we do infrastructure and roadwork.
He’s standing in the middle of his crowded City Hall office, surrounded on all sides by blueprints, drafting tables, and detailed street maps of every neighborhood in the city he knows by heart.
0140 I could tell you alleys and dead ends and all that.
Guilano started working here as a college student more than 20 years ago. He plans on working another 11 years before he’ll be able to retire on his guaranteed public pension.
0328 MY FAMILY AND I BELIEVE WE’LL BE SET AT THAT POINT FINANCIALLY. WE’VE POSITIONED THEPAWNS IN THE RIGHT PLACE WE HOPE, AND I’LL BE ON THE GOLF COURSE WE HOPE AT 55 AND A HALF.
That’s the dream for countless public employees all across the state. Put in your time and retire while young enough to enjoy it. Local government employees like Guiliano pay into the state retirement system, but now pension costs are soaring and many officials say they can’t afford it anymore.
One floor down from Joe Guilano’s office sits Rome’s Mayor, James Brown.
1315 SOONER OR LATER WHEN THE CREDIT CARD BILL COMES DUE YOU HAVE TO PAY IT. THE MONEY IS DUE. THERE IS NO MORE TO GIVE.
The problem is that the state pension fund took a 40 billion dollar hit when the stock market collapsed three years ago. Workers’contributions to the fund are capped…3% of salary for 10 years in most cases, with recent hires having to pay-in for their entire careers. So to have enough money to fully fund the system, the employERS—that means cities and towns, and THAT means taxpayers…have to make up the difference.
0045 IN FEBRUARY WE WRITE OUT A CHECK FOR 2.7 MILLION DOLLARS THAT’S OUR CONTRIBUTION TO THE NEW YORK STATE RETIREMENT SYSTEM. SO THIS YEAR IT WENT UP 700 THOUSAND, AND IN 2012 IT’S GONNA GO UP 900 THOUSAND.
And that’s not the only cost that’s gone up lately…it amounts to a lot of cash in a city of only 35 thousand people. To meet those higher costs, Mayor Brown eliminated some services, cut 17 city jobs and didn’t fill another 16 part time positions.
The story is the same across the state. Local governments have sticker shock… payments are up this year, on average, from 11.9 to 16.3 percent of payroll…and higher still for police and firefighter pensions.
To ease the burden, the state is essentially letting cities and towns borrow the money…from the pension fund itself… in exchange for higher contributions down the road.
But that’s just smoke and mirrors that props up an unsustainable system, says E.J. McMahon of the Empire Center for New York State Policy.
0645 THE PROBLEM IS THERE IS NO FINANCIALLY RESPONSIBLE WAY TO AVOID THE BILL THAT COMES DUE FOR PENSIONS YOU’VE BEEN PROMISING FOR DECADES. WHAT YOU CAN DO IS CLOSE THIS CURRENT SYSTEM ONCE AND FOR ALL…
That current system lets public workers retire earlier than in the private sector, meaning there’s less time for contributions to grow, and more time the workers will be drawing their fixed monthly payments from the fund.
McMahon suggests changing this defined benefit system to a plan known as a defined contribution—something like a 401 k —that public workers would pay into over the length of their service. And he argues that if pension contributions are going up, salaries shouldn’t.
1020 YOU CAN’T KEEP TREATING CONTRACT NEGOTIATIONS AND COLLECTIVE BARGAINING AS BUSINESS AS USUAL WHERE EVERYODY GETS A RAISE YEAR IN AND YEAR OUT IF THEY’RE ALREDY GETTING A RAISE IN EFFECT THROUGH YOUR CONTRIBUTION TO THE PENSION FUND.
These ideas sound like nothing but union bashing to Steven Maderasz of the CSEA, which represents 40% of government workers in the state.
0216 ITS EASY IN TOUGH ECONOMIC TIMES TO TRY TO FIND A SCAPEGOAT//0655 WE’RE LOOKING AT THIS NARRATIVE OF BLAMING THE WORKERS FOR A CIRCUMSTANCE THEY DID NOT CREATE.
A plan like a 401-K would make the size of a worker’s nest egg dependent on the performance of the market, a risk the unions don’t want to take. And Madaraz says higher employer contributions now are just making up for the good years when the pension fund’s investments covered their contributions.
1215 WE WENT FOR 10 YEARS IN THIS STATE WHERE PUBLIC EMPLOYERS DIDN’T CONTRIBUTE AT ALL. NO ONE COMPLAINED BACK THEN WHEN THEY WEREN’T CONTRIBUTING.
Back at the Rome department of public works Joe Guilano says he shrugs off the comments he hears about public union workers getting rich. No one is trying to take advantage of the taxpayer, he says…. after all, they’re neighbors.
1725 THIS IS WHERE WE LIVE AND RAISE FAMILIES AND HOPE THAT OUR GRANDCHILDREN WILL RAISE FAMILIES. WE DON’T WANT TO PUT ANY OF THE BURDEN ON ANYBODY. WE JUST WANT TO MAINTAIN THE RIGHTS THAT WE DO HAVE, THE BENEFITS THAT WE DO HAVE.
A secure retirement, he says, in return for a career spent serving the public.
For North Country Public Radio, I’m David Chanatry with the New York Reporting Project at Utica College