February 29, 2012
Statewide Business Community Calls on Leadership to Support Tier VI Pension Reform
The following letter was sent February 27 to the leaders of the New York State Senate and Assembly by a statewide coalition of organizations. The letter urges Sen. Skelos and Speaker Silver to support the Tier VI option that is included in Gov. Cuomo's 2012-13 budget proposal, a measure necessary for the future economic viability of New York state.
February 27, 2012
The Honorable Dean Skelos
Senate Majority Leader
Legislative Office Building, Room 909
Albany, NY 12247
The Honorable Sheldon Silver
Legislative Office Building 932
Albany, NY 12248
Dear Honorable Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver:
We write to ask for your public support for pension reform, a measure essential for the future viability of New York State's businesses and economy.
As New York continues to recover from the recent recession, we cannot afford to continue the past practice of taxing businesses out of this state. As our pension system has grown more and more bloated each year, businesses have been forced to pick up the bill, paying higher and higher property taxes to cover the growing cost.
Over the years, New York's businesses have put more and more money into the pension system to the point where local companies are almost subsidizing pension benefits.
We need to be taking steps to make New York more competitive. That includes finding ways to lower property taxes. As we have seen over the past several years, property tax increases affect jobs. In the last 10 years alone, pension growth represented 88% of property tax increases from city governments, 41% from county governments, 28% from villages and 22% from towns. Our property taxes are among the highest in the nation, and businesses pay 35% of all property taxes in the state. Businesses pay five times more in property taxes to localities than they do in corporate income taxes – more than $2, 300 per employee in property taxes.
Property taxes are a job killer, and the pension system is the major driver of property taxes. That is one of the reasons many of us supported the tax cap last year, to help drive a real discussion on mandate relief.
Governor Cuomo's proposed Tier VI is fair to workers, protects businesses from future tax hikes and preserves our state's fiscal security. This proposal would give only future state and local employees the choice of joining a defined-contribution plan, or the traditional pension. Not a single current state worker would lose any benefits or have to pay a single penny more into the pension system. In fact, today's workers would end up benefiting because under this plan they, along with all other taxpayers, would end up saving a total of $113 billion over the next 30 years. And they would not have to face the possibility of future government cut backs driven by pension costs.
As we continue down the road to recovery, it requires that all of our state's leaders foster an environment that supports local businesses, instead of continuing fiscally irresponsible policies that hurt businesses. We respectfully ask you to support the implementation of Tier VI as proposed by the governor, and take a major step toward making New York more economically competitive.