NEW YORK (Reuters) - New York State taxpayer-funded contributions to public pensions will “explode” in the next five years, forcing the state to divert resources from other services to meet the obligation, the Empire Center for New York State Policy said in a report on Tuesday.
Taxpayer contributions to the New York State and Local Retirement Systems could double over the next five years, adding nearly $4 billion to annual taxpayer costs, according to the report by the nonpartisan think tank.
Taxpayer contributions to the New York State Teachers’ Retirement System, which totaled $900 million this year, could reach $4.5 billion by 2016, the report said.
“The run-up in pension costs threatens to divert scarce resources from essential public services during a time of extreme fiscal and economic stress for every level of government,” the report said.
“This is not just a matter of financial necessity but of basic fairness to current and future taxpayers -- the vast majority of whom will never receive anything approaching the costly, guaranteed benefits available to public employees,” it said.
Using private-sector accounting rules, the Empire Center estimates the New York State and Local Retirement Systems are $71 billion short of what is needed to fund pension obligations, while the state retirement system for teachers has a funding shortfall of $49 billion.
Based on the same standard, New York City’s pension funds had unfunded liabilities of $76 billion as of mid-2008, before their net asset values plunged in the wake of the financial crisis, the report said.
Reporting by Edith Honan; Editing by Diane Craft