In what the New York Times generously described as “baby steps,” the Empire State’s appalling legislature last week passed several spending reforms designed to close the state’s $3.2 billion budget deficit. Education was not the biggest story, but teacher pension changes loomed large--and, for the most part, the unions won again. Most of the bill’s provisions protect veteran teachers at the expense of their younger peers. For example, new teachers (those hired after January 1) will contribute a larger share of their salaries to the retirement system. On the other hand, it slightly raises the retirement age (from 55 to 57). Meanwhile, other state employees saw their retirement age rise to 62. Why the discrepancy? ''We need the early retirement,” the head of the state teachers union told the AP. ''Teachers just don't make it to 62. It's a tough job.'' And there’s more: The plan bars school systems (and local governments) from offering 401k-type plans; Governor Paterson agreed to a “no layoffs” guarantee for the next year; and school districts are forbidden to change their health insurance benefits. Also included is a provision limiting private contractors, shifting those roles to public employees. While the pension changes overall will limit state costs--Patterson and House Speaker Sheldon Silver claim $30 to $50 billion over 30 years, roughly a 23 percent annual reduction--the pension bill is projected to increase 155 percent in the next three years. This ain’t pension reform. It’s patching a broken system with chewing gum.

NY’s new pension plan cuts costs, helps unions,” by Michael Gormley, Associated Press, December 3, 2009

“'Reform' landmines: Pension bill’s ugly sweeteners,” by John Faso, New York Post, December 3, 2009

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