Establishes a government employee benefit fee for state employees

Summary of specific provisions

Section 1 - Legislative findings and declarations.

Section 2 - Adds §92-o to the State Finance Law creating the Government employee benefit fund and the special accounts of New York State and all local government entities that choose to opt-in to the use of the fund by implementing the Government Employment benefit fee. Directs the powers of the State Comptroller and President of Civil Service over the fund.

Section 3 - Adds Article 13-A to the Civil Service Law §190 creating the Government employment benefit fee for employees of the State of New York. Non-wage benefits are defined to include health care, insurance, pension, parking, day care, educational and other benefits up to 5% of the employee's gross wages per pay period. Provides that the fees collected shall be deposited into the government employee benefit fund, presided over by the State Comptroller. Directs the powers of the State Comptroller and President of Civil Service over the fund.

Section 4- Sets the enacting date.

Justification

Real Property Taxes in New York State are too high, and the burden they place upon citizens, homeowners and businesses, is making it difficult for New York State to thrive, prosper and succeed. The only way to realistically reduce the real property tax burden upon our citizens, homeowners and businesses, is to place a comprehensive approach in State law which controls costs and spending for local governments, and provides significant mandate relief with respect to their fiscal obligations. Real property tax relief and local government mandate reform must be achieved by establishing a comprehensive approach to reduce real property taxes across the state, the controlling government costs, and providing significant mandate relief to local governments.

Health insurance costs have been one of the fastest growing components of municipal budgets. For example, between 2002 and 2008, health insurance expenses for cities and villages grew by 40% and 61%, respectively. Additionally, in many municipalities, the cost of retiree health insurance exceeds the cost of health insurance for active employees. In fact, a recent report of the Empire Center for New York State Policy estimates that the total unfunded retiree health care liability for New York's local governments and school districts (including New York City) is $130.4 billion.

Municipalities are currently facing increases ranging from 25% to 40% in pension contributions for 2011 and 2012, and the predictions for 2013 and beyond are just as ominous. According to a survey conducted by the New York State Conference of Mayors (NYCOM), total pension costs for cities are projected to rise from $203 million in 2010 to $457 in 2015. A recent report by the Empire Center for New York State Policy estimates that state and local employer contributions will more than double over the next five years, adding nearly $4 billion to annual taxpayer costs.

Public employers can no longer foot the bill for generous pension and health insurance benefits. This legislation would provide a mechanism to protect taxpayers by ensuring that all public employees contribute toward the cost of their non-wage benefits, thereby giving municipal employers the ability to fund essential public services.

Prior legislative history

This is a new bill.

Fiscal implications

None to the State.

Effective date

This act shall take effect immediately.