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Bookkeeping. Photo: <a href="http://www.flickr.com/photos/genbug/">Laura Gilmore</a> CC <a href="http://creativecommons.org/licenses/by-nc-nd/2.0/deed.en">some rights reserved</a>
Bookkeeping. Photo: Laura Gilmore CC some rights reserved

Budget offers a plan for "pension bubble"

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New York Gov. Andrew Cuomo's budget address was a wonky speech, full of numbers from both sides of the balance sheet.

Local governments were among those parsing out the results. Counties have struggled in the recession years, with falling or flat revenue, loss of state aid, a state cap on property tax increases, and rising costs of mandated services.

The governor had a partial answer for them yesterday -- an unconventional way to help localities with the high costs of state pensions.

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Last year, the legislature created the new Tier 6 pension for entry-level state workers.

It basically provides a financing plan to get the municipalities through this pension bubble. --Gov. Andrew Cuomo
It offers lower benefits in the past and is expected to save $80 billion over 30 years. But local governments won't begin to see those savings for several years.

Cuomo's proposal would allow cash-strapped governments to borrow against those future savings. "This is a significant way to alleviate the financial stress on local governments. It's also smart. We did Tier 6. It builds on the success of Tier 6 and it basically provides a financing plan to get the municipalities through this pension bubble, which is what we're really experiencing."

That idea left Republican Assemblyman Ken Blankenbush scratching his head, but reserving judgment. "You know, when you first hear about that, it doesn't seem like such a hot idea to borrow against a savings that may or may not be there in the future, so I'm going to have to take a look at that. I was hoping for a little bit more in help for unfunded mandates for our local governments."

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