Gov. Cuomo‘s plan to drastically cut the cost of public-employee pensions this year is in danger.
In a clear sign of the proposal’s trouble, Cuomo hastily scheduled a meeting Tuesday night in Albany with city labor leaders to gauge what kind of compromise the unions would accept.
The governor prides himself on combining mastery of detail with a bulldozer style. But he was forced to seek a deal this time because of a procedural foulup by his office in rolling out the plan. That foulup, several sources say, has given city unions the upper hand.
The governor’s aides failed to include in his pension reform legislation a legally required analysis from the city’s chief actuary, Robert North, on its financial impact on the city. In the past, such an analysis has preceded a “home rule” vote by the City Council to request any pension changes from Albany.
But now there isn’t enough time for the actuary to produce his report and for the Council to vote before the April 1 deadline for a new state budget.
Cuomo’s spokesman Josh Vlasto denied yesterday there was any problem.
“We’ve been talking to the city actuary all along,” Vlasto said. “Once the final bill is ready at the end, he can produce the fiscal note quickly.”
As for a home rule vote by the Council, Cuomo’s legal people insist it isn’t needed.
They are backed up by City Hall. “The Law Department has looked at this closely, and it’s clear no home rule is needed,” said mayoral spokesman Marc La Vorgna.
The police, firefighters, teachers and other city unions are so united against the proposal they are ready go to court over the procedural issues.
Moreover, if Cuomo ends up having to separate his pension proposal from the overall state budget, labor’s chance of defeating it dramatically improves.
Labor leaders say they are ready to negotiate reasonable reforms, but not to gut a system under which the average city retiree receives only $22,000 annually.
Last week, they notified Cuomo’s team they are poised to launch a TV ad campaign.
“The ads are ready to go, showing him as Governor 1%, attacking workers’ pensions like just Wall Street and the business community want him to do,” said one major union leader.
Mario Cilento, the new president of the state AFL-CIO, persuaded his fellow union leaders, as a courtesy to the governor, to meet with him on Tuesday night, several leaders said.
Vlasto denied the sitdown was unusual.
“The governor has been meeting with labor leaders on any number of issues for weeks,” Vlasto said.
But for a Democratic governor with presidential dreams, Cuomo must now decide if he is ready for a nasty battle with the labor movement in his own state.
His proposal for a new Tier 6 retirement plan for future workers would raise the retirement age to 65 for all but the uniformed services, reduce benefits and increase individual worker contributions.
“It’s a Draconian plan for workers, but it doesn’t begin to save money immediately,” says John Murphy, a former head of the city’s retirement system who now advises several labor unions.
Neither Cuomo nor Mayor Bloomberg like to dwell on the fact that a big reason for skyrocketing pension costs are the huge investment losses city funds suffered the past 10 years on the stock market, Murphy says.
Fees paid out to investment firms that manage the fund are also spiking.
Back in 2000, for example, the New York City retirement system paid $27 million in fees to such companies. This year, it is projected to spend $204 million.
“They’re penalizing city workers while they reward the very firms responsible for the financial crisis,” Murphy said.
jgonzalez@nydailynews.com
