Andrew Cuomo's Bad Plan on Pensions

As part of his proposed budget, New York Governor Andrew Cuomo has advanced a proposal called the "Stable Rate Pension Contribution Option." This would allow municipal governments, currently facing sky-high pension contribution rates due to declines in investment values during 2008 and 2009, to limit their annual payments toward employee pensions.

This sounds appealing at first. But really, it's a trap. It's just a way for municipal governments to close their budget gaps by borrowing money from the state's two main pension funds, the New York State and Local Retirement System and the New York State Teachers' Retirement System. It's a poor substitute for alternative reforms that could actually reduce the cost of municipal government.