Gov. Andrew Cuomo’s salary will increase from $179,000 to $200,000 in the new state budget.
That’s still a pretty chintzy salary for a chief executive, considering the size of the state and the challenges it faces. Eventually, his salary will reach $250,000 if he delivers on-time budgets.
That’s still pretty low, but surprisingly near the top for state governors.
But then I learned from the Empire Center that high-earning state employees have their pensions tied directly to the governor’s salary.
That means the impact of the governor’s raise is much greater than $21,000.
According to the 2012 pension reforms, state employees will get a pension based on their final average salary up to the governor’s salary of $179,000. Bumping the salary of the governor allows future retirees to also get a significant bump in retirement income if their salary surpasses that of the governor.
In other words, it’s not just the governor who got a boost, but potentially thousands of retiring state workers down the road.
The Empire Center found there are currently 5,978 members reporting more than $179,000 in pay. That will only grow in the coming years.
There were only 15 Tier 6 employees in the teachers’ union making at least $179,000, but the Center did find another 1,491 members in older pension tiers who benefit.
That’s good news for those highest-earning state workers, but that will cost the state — and taxpayers — later.
The Empire Center estimated that a Tier 6 employee retiring in 2042 with a future average salary of $250,000 and 30 years of service would get a pension of $98,450 under the governor’s previous salary, but with the bump in the governor’s pay that grows to $137,500.
Considering that half of all Americans have neglected to save anything for retirement, that’s a pretty cozy nest egg.
Just over the horizon we may have two classes of retirees — those that had government jobs and those that did not.
Just 25 years ago, 38 percent of Americans could count on a pension in addition to their Social Security check. When my dad retired in 1994, he cashed a pension check every month after 30 years in a factory.
Those days are over.
The number of workers getting pensions today has dwindled to 13 percent, and almost all of them are government workers.
It’s another crisis looming on the horizon.
One in 10 workers with a pension and union protections will be taken care of, but what about everyone else?
Unfortunately, Gov. Cuomo’s pay raise means the rich will get richer, but nothing extra for anyone else.