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Mike Groll / AP, file
New York Gov. Andrew Cuomo says public pension reform was needed to stave off tax hikes.
ALBANY, N.Y. -- Future public workers in New York will have their retirement benefits cut under a sweeping pension reform measure passed by state lawmakers.
The measure, aimed at reducing future public worker retiree benefit costs by some $80 billion over 30 years, was approved by lawmakers early Thursday morning after Gov. Andrew Cuomo, a first-term Democrat, struck deals with legislative leaders late Wednesday.
The legislation was tied to a clutch of bills that passed, including measures to expand Las Vegas-style casino gambling and the state's criminal DNA database.
"Without this critical reform, New Yorkers would have seen significant tax increases, as well as layoffs to teachers, firefighters and police," Cuomo said in a statement.
The approval was a defeat for labor unions, who claimed they were sold out by Cuomo. New York has the highest union membership rate among states, at just over 24 percent, according to the U.S. Bureau of Labor Statistics.
“This deal is about politicians standing with the 1 percent — the wealthiest New Yorkers — to give them a better break while telling nurses, bus drivers, teachers, secretaries, and laborers to put up and shut up,” Danny Donohue, the president of the state’s largest union of public workers, the Civil Service Employees Association, was quoted as saying by The New York Times.
Spiraling public-sector employee pension obligations are one of the top financial problems faced by state and local governments across the U.S.
The pension reform reduces retiree benefits for future state and local government workers, increases the amount higher-earning public employees contribute toward their retirement plans, and raises the retirement age by a year to 63, among other measures.
New York City Mayor Michael Bloomberg applauded the bill.
"Skyrocketing pension costs have caused fiscal crises in many cities and counties around New York, cutting into local governments' ability to deliver core services," Bloomberg said in a statement. "That's why mayors and county executives - from both parties, and from every region in the state - came together to support Governor Cuomo's plan."
A senior official in the Cuomo administration said that the deal will save local governments about $80 billion in pension costs over three decades. Cuomo had proposed a pension overhaul estimated to save $113 billion over three decades and relieve local governments of a growing cost in employer contributions that could threaten solvency. The deal worked out late Wednesday made changes to the plan, reducing the total but still producing a hefty savings.
In striking the deal, Cuomo scaled back the most contentious portion of his pension proposal, which would have given new public workers the option of forgoing a traditional pension and instead choosing a defined contribution plan, similar to a 401(k), according to the Times.
Reuters, The Associated Press and msnbc.com staff contributed to this report.
More content from msnbc.com and NBC News
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Everyone has to go thru some sacrifice except the rich ones , because many of you screaming your ass off (Why the rich should be punished?"). What a bunch sorry dummy's you people are.
Why should anyone be punished for success? Everyone should pay to support government. If one earns a dollar, then one should pay a portion of that dollar to support the government of all Americans - rich and poor alike.
In NY especially, the rich are being punished plenty. Why do you think they are fleeing the state in droves? You can't continue to additionally penalize those who are more successful, hard working, and fortunate and expect them to stick around and take the abuse.
Keep it up and you'll push Wall Street to Dallas, then you'll be rid of the "evil 1%", then you'll be happy and TX will be happy, it will be a win-win.
Oh, and you can keep the United Nations. We're really not interested in that.
Oh no....here comes the "Greece protesters" flown in by SEIU.
Austerity anyone ?
You don't know much about New York if you think that the rich have been getting off easy. I have no sympathy for the unions, none whatsoever. As for the comment about the pension plans being mismanaged, here's my response: the unions had no business getting such pensions to begin with. And don't tell me about how those benefits were "negotiated" -- I don't recall any referendums where all the voters had a say in it. Politicians pandering to unions -- that is the ONLY reason unions got such benefits. Well, the gravy train is over.
And there is one of the reasons the state is so in debt.
Look for big switches in the next election. Hard working Americans that are part of unions are tired of being the whipping boy of the Republican party.
Rich people paying effective rates of 14%, need to pay their fair share. If people are promised a retirement and are counting on that they should get it.
Republicans won't be happy until they have dismantled Medicare, Medicaid, and Social Security. Leaving 2 classes, the rich and the poor.
NY State income tax rates on those making over 1 million is 1.97% higher than the next highest rate. I think the wealthy are already paying more, but NY go ahead and tax your wealthy more, here in Michigan the state income tax rate is over 4% less on the wealthy than it is in New York. All those wealthy can come here and buy up the cheap Detroit real estate and rebuild the city. We would love to have you here.
sure don't see BIG cuts to the wealthy or lawmakers pensions.
Bottom line is people who work for 40 years deserve a rock solid pension....
I will never side with these cuts until they happen to the top 1st. Trickle down does nothing but destroy the prosperity of the workers over rewarding the elite
Bottom line is the pension funds were mismanaged, and those looking after them gambled for higher returns in the stock market to avoid having to pay into them, and then when it all crashed their risky decisions screwed over an multiple generations
but people always blame the worker for just wanting a fair share of the pie., and the attitude is that all the blue collar workers should reduce their benefits and pay so we can all be piss poor and kowtow to those who have
they will be voted out of office for not going after the real problems as all lawmakers have learned. better to punish the blue collar worker because they just do not have enough money to influence and donate to politics and lobbyists
The reason why pensions are breaking the states is because people are living a lot longer these days. No one anticipated that.
Everyone has to make sacrifices. I work in a large pharmaceutical company, and I am no fan of the 1%, but changes need to be made --- for everyone. I've watched this company shut down plants and ship them overseas, destroying whole neighborhoods (and this company doesn't have unions). I do not go along with vilifying Unions --- just study U.S. history and you'll see what it was like before they had Unions -- no one is going back to that. However, with the U.S. being involved in two 10-year long, worthless wars (that the oil was supposed to pay for) but wound up being paid for by American taxpayers, and people living longer and putting more pressure on Social Security, not to mention SS funds being used for things that it was never intended to be used for, things have to change.
Everyone has to pay more. Trickle-down economics does not work. When the middle class prospers, so does everyone else --- including the 1%.
They've done the right thing in New York.
Alina77 - Taxing the rich is the answer to all problems?
kat-1015719 - So how bad did the public employees have it before unions?
dongwork4yuda - People who work 40 years and save into their own 401K will have a rock solid retirement.
I see we have yet another example of a Teabagger pretending to be a Democrat (Similar to a situation in Delaware) just to get elected to the office of Governor then its cut cut cut and cut some more (But increase the wealth for the filthy rich) as the so-called Democrat suddenly turns out to be a true Republican't corporate Teabagger!!!
I think the Governors of New York and Delaware should both be recalled for lying about which party they actually serve!
And that's my opinion.
....uh, yeah....Cuomo is in the Tea party???????...news to his father, I'm sure...how about there is no taxpayer money left to pay for the unsustainable pensions.......please get a clue......
Unsustainable? In 2006 Bush made it legal to underfund pensions.
If I underfund for my utility bills I'm sure they won't mind a decrease in payment.
Please get a clue...
The rich earn everything have, thieves rob, but embezzlement is not punished as crimes. After all if you own everything can you steal from yourself. The workers did not protect themselves, not very smart.
If you define success from Muppet's from wall street you are kiding yourself.
@Eric-913730
Can't blame the Republicans for busting the unions this time. BOTH the NY Governorship and NY Assembly are controlled by DEMOCRATS. Must feel kinda weird having to direct your outrage at no one else but liberals themselves.
STexan... If the United States were a human anatomy, TEXAS would be the a$$hole!
It's as simple as this; the Repukes want to talk about fiscal responsibility while giving all the tax breaks to the 1% richies.
If a new sidewalk is built in NYC, ALL New Yorkers should pay for it. If you believe the richies pay their fair share, you're a "muppet" !
Good decision Gov. Cuomo.
'Cause as we all know, the financial problems facing the state of New York (and the country for that matter) have been caused by the poor and middle class having too much, and the richest class having too little...
Agree 100%. Shared Sacrifice my azz
I'm not a union member...where's my pension? When do I get to suck on the public taxpayer's boob after working 25 years in highly protected job with little hard work (yeah that's right) and more vacation days than I would get in a lifetime. I'd like to get Columbus Day and President's Day and MLK Day and Flag Day and all the other holidays that public employees get. I'd like a nice big fat benefits package and pay next to nothing for my health coverage....and don't tell me unions and public employees get paid less because that's BS. Great Job NY!!! It was long overdue.
Ever notice how lawmakers never cut their own benefits?
They need to lead by example.
.
In MN they are getting ready to give half a billion dollars to an NFL owner to help increase HIS profit.
Would pay a lot of pensions would it not?
And these valiant lawmakers included their own pensions, right?
Nope. After their hard work putting together this tough legislation, they felt that they deserved a pay raise for all of their efforts. lol.
I think the unions are needed and provide a good service to their members, but the pensions is where they lose my support. The gravy train has got to end. If they fund their own pensions fine, but the tax payers shouldn't. I dont get a pension, and most people I know dont, hell I dont even have 401k matching. And I dont think preventing new hires from the same pension as older workers is cutting benefits. These people had none to begin with and you have to start somewhere. Sure it may not seem fair that they may do the same work as someone else but not get the same type of pension plan, but guess what, welcome to the work world. I dont get paid as much as the next guy or have the same benefits, life isnt fair, but I shouldnt have to pay for someone else's retirement, only my own. This isnt the unions fault either. It is the politicians that agreed to these outrageous benefits in the first place. I suspect that they were agreed to as a way to get political points, and not for the best interests of the taxpayers.
This is just the beginning of cities and states that cannot continue to pay out the benefits to union workers. In the state of Colorado they are saying that they will be 10's of billions short of ever paying for all that was negociated by the unions over the years. Hang on to your A$%^, the next collaspe is on the way
but they sure can hand out gifts to affluent and make sure all their needs are met and nice and comfy
looking forward to the revolution.. Time for some uppity ups fear
I have to agree. Pensions need to stop, now! People need to fund their own pension and not depend on others. Welcome to the real world; work hard, safe for the future or get out and find a new job. I am tire of these government employees always complaining about getting reviews, not getting pay enough and and and. Guess what. the rest of the country doesn't only work from 9-4 and expect everything to be handed to them
9-4? I wish my office had your working hours.
It's 8:45-5:15 where I work and you get called a clock watcher and given a bad review if you leave at 5:15...
I see New York is serious about taking on organized crime.
Nope. They haven't disbanded the Legislature.
;navyvet98: Truth be known--THEY ARE ORGANIZED CRIME!
No we're not, we elected Don Cuomo.
"In other news today, New York lawmakers passed a pay increase, and increased medical benefits, for State lawmakers, along with an increase to State legislators pension benefits, in recognition of their efforts in making the really tough decisions to protect the people of New York from overcompensated civil servants......"
Most union workers do pay for their benefits. I know, I do- 200.00 a month; however why don't the lawmakers and gov't officials????
It will be interesting to see if Wisconsin style protests and recalls break out or whether it's perfectly OK when Democrats do it. It should be very revealing as to whether public employee unions are anything more more than just political action committees for a particular political party.
I was asking myself the same and I am a Democrat 100% +. I am very disappointed by the Governor. I will protest. Ya'betcha!
Don't mix up a NY pension fight with a Wisconsin right-to-work fight. Two different animals.
As someone from Wisconsin who has been active in the over 1 year of protests, I would say that this pension fight in NY is just another attack on working people. Our governor gave millions in tax breaks to corporations and then turned around and said Wisconsin was broke and that the state workers had to compensate for it. The bad economy is just a vehicle for politicians to get something they want. Like destroying unions. Why do you think the Republicans in WI took away the right for state workers to deduct union dues out of their paycheck? That has no fiscal component to it, yet it was passed in our budget.
Companies do this exact same thing in a down economy as well. The company I worked for went two years without giving raises. However, they still made massive profits. They said they did the measures to be proactive. I think they were just monopolizing on a bad economy.
Hurting the middle class is and always will be bad economic policy. If you always cut from the bottom, the economy will never get back on its feet.
Jan Brewer, Govenor of AZ, made a sales tax hike of 1% this year and then gave corporations a tax break. (Who says the GOP don't raise taxes?) Obama gives the working class a tax break from the payroll tax side (robbing our SS piggy bank for tomorrow to perk up the economy today) and yet Obama is talking about giving corporations a 7% tax cut on their income tax. Both parties are working for the rich and the corporations and against the average person. Obama why not give middle income earners a 7% tax cut on the income tax side to perk up the economy and leave the payroll tax (SS and Medicare) alone. It is easy to see both parties are scamming the workers of this country. I don't want it but I smell revolution in the air.
Ha, Ha, another good laugh for the day. That was my thought exactly. Why is it that Congress and State Reps always get the raises and full benefits WITHOUT contributing one rotten dimes worth.
I wonder how much of his and the governor of NY gave up in this deal?
Not defending anyone's actions, but the salaries of members of Congress and state legislatures are taxed as earned income. They also pay SS and Medicare taxes.
Perhaps, but I bet they don't report their bribes to the IRS.
As go the benefits, so will the incentive to enter the public work force. It will be interesting going forward to see what implications this has for public services.
Everywhere that I know there is a waiting line to get on the public gravy train so I don't think finding workers will be a problem. Where else you going to get the benefits and pay with most able to retire after only 20 years.
total BS of course...
Good pension plans are not the problem. For many years the employers were not putting the money for everyones pension into savings where it should have gone. The fat cats were stealing it and spending it on themselves. Now the pension plans don't have enough money in them to pay the retirees. It is just another way the super rich are screwing working people. 401k's are even worse. Any pension plan will be golden if the employers are required to put the money in the pension plan at the time an employee earns it. Sadly, the employers are allowed to steal this money and then on some future date they claim the pension plan is broke and they blame someone else. Where is the money? The fatcats on wallstreet know.
well said. Pensions and retirement funds in this country are underfunded because the money was taken out by the caretakers of said funds, that is parasites on wall st.
Execs of these firms make $20million plus for decades, and then turn around and say "well you'll have to take a pension cut, we just don't know where your money went?!?"
Wall street and its ongoing fraud and still not one banker that participated in the fleecing of America has been charged. Yet we need to keep undercutting the American middle class according to wall street and their political puppets. Why so they can continue the upward flow of wealth to the 1%. This is who really controls America. Wall street has forced most corporations to eliminate pensions and benefits saying that corporations cant afford them anymore. Workers either accept the cuts or their jobs were shipped to third world sweatshops. Why to increase profits that mostly go to the 1%. Now that they have eliminated the private sectors benefits and pensions they now have taken aim at public sectors workers benefits. Make the public worker the scapegoat for the 1%"s never ending greed. And the uniformed American citizen continues to believe this wall street bull crap that their fellow middle class worker is causing their financial difficulties and loss of wealth. The middle class better wake up. It is in a death spiral to the bottom of the economic ladder.
These NY politicians still sold out the taxpayers of the State and the pension system still has the ability to bankrupt the State. They only added one year to the retirement age (63) and these pensions will still be padded with their overtime and manipulation of the rules. The municipal employees still are not forced to contribute to their pensions so they have no skin in the game and they still expect a defined and guaranteed pension in perpetuity, something no one else on the planet gets.......sad for all NYS residents.......and the political whores think legalizing gambling across the state is going to pay for this scheme.....these people are out of control and driving us off the cliff.....
There was a time when public workers needed unions, but now some of their benefits are way out of touch with average benefits. Many firemen and policemen retire with more than their yearly salaries with family health care for life, while most workers if they don't make their own retirement just collect social security and pay for health care.
While unions were necessary during the Industrial Revolution to stop oppressive employers from exploiting their workers they have become the downfall of American industry. Unskilled unionized workers making $20-40/hr in the auto industry proves this fault. Many of the employees laid off from the Big 3 couldn't find work because they lacked basic skills normally acquired by non-unionized workers during their first years out of high school or pushed them to go to college. America needs to work hard on phasing out all unions.
Sapienti unions are still necessary. With the weak unions of today we are already seeing employers exploiting the workers again. Do you not think the 1% would take advantage if there were no unions, no unity?
finally something is being done to abolish unions.. the difference with rich people is they create jobs which in turn turn into taxes that pay into the governemnt spendings.. uniouns on the other hand get paid by the tax people.. and their pensions are government money .. so do the math..
Create Jobs, Really after the greatest up flow of wealth in the last 15 years our unemployment, underemployment and workers out of the job market is the highest in numbers since the great depression. Do you really believe the crap your peddling.
yes because hedgefund managers and others on wall street really create jobs. You know what creates jobs?? When people have money to buy a product that needs to be made IN AMERICA. My biggest issue with republicans is that they don't think..they just spew whatever someone else told them to say. Dems on the whole, tend to think more about things. Maybe why they tend to be better educated.
The real crime is our Three Branches of Oligarchy deciding to cut from the bottom up...... The Three Branches of Government should face reduction in pay, benefits and reduced pensions first before passing out the brown jelly beans to everyone else.
Recall Cuomo! (sarcasm font engaged)
Isn't a pension cut just a back door tax hike? "See, you're not paying us any more taxes... we're just paying you less in your pension plan."
you're partly right. Pension cuts are just backdoor tax hikes on the working class, we're still not allowed to touch the incomes of the wealthiest class...
Of course, Cuomo and Bloomberg will be sure that they get their outrageous retirements when they leave office. What a joke.
It's about time. Q: Current, unretired public workers sacrifice nothing?
As far as pension cuts go, no. Federal law prohibits reducing pension benefits for active employees. It always has to affect future employees only.
Yep, just like the Ryan plan doesnt ask current Medicare recipients to sacrifics anything. Always easy to cut the 'future' benefits. SO much for shared sacrifice....Cuoma $#$% the Unions then vote themselves a pay raise..... what a turd Cuomo has become.
speaking as a union member...YEA! People are way too spoiled and clinging to work they can't/don't do trying to get maximum $$ from the state..
I like this Cuomo
Before taking office, he got some lessons in governing from former PA Gov. Ed Rendell. He didn't like unions, either, and had similar laws shoved through the Legislature.
Nice to see taxpayers getting a break from being raped by the incestuous relationship between public employee unions and state legislatures. Won't last long.
Nothing in life is guaranteed...I would bet dollars to dimes that I won't see as much social security benefits as I'm theoretically entitled to.
That said...people need to look out for themselves. Government SHOULDN'T do it (for obvious reasons!), your boss and company won't do it, and God only comes into the picture in the afterlife (with VERY few exceptions!). As the saying goes..."Charity begins at home!"
Although I have never been a fan of big unions, I find this trend to cut pensions and benefits pitiful. Wall Street greed causes the largest recession in 80 years and our elected officials want now to balance the books on the backs of the middle class. Revenues are down so they must cut costs. Why not tie pension costs to the health of the economy? With recovery we then may be able to attract better workers. I don't see how paying people less will accomplish this.