The Ramapo Town Board was expected Wednesday night to pass a resolution sponsored by Councilman Daniel Friedman, which could help lead to lower pension contributions for local governments – a major state mandate – in the upcoming year.
The New York State Comptroller determines the amount that local governments need to contribute toward the state’s pension fund. Recently, the Comptroller announced that due to the rise in the stock market this year, the pension fund balance has topped a record $160 billion as of the end of the first quarter. Since the end of the first quarter, the S & P 500 has risen another 4.5 percent, which would amount to an additional increase of over $7 billion to the pension fund.
The resolution, the only known resolution of its kind in the state, calls on the Comptroller to freeze pension contribution requirements on all local governments for the upcoming year – and examine a potential reduction of those contributions – because of the performance of the pension fund.
“When the stock market collapsed, local governments saw their required pension contributions to the state skyrocket to make up the losses,” explained Councilman Friedman. “With the record profits the pension fund now enjoys, the right thing to do is to finally ease some of the tremendous burden the state pension mandates have placed on local governments like Ramapo.”
The Town of Ramapo saw its pension contribution mandate rise from under $100,000 12 years ago to over $6 million this year. Mandates such as pension contributions have hampered the ability of local governments to keep property taxes stable and can wreak havoc on municipal budgets.
“High pension contributions lead to higher taxes,” said Friedman. “This resolution respectfully calls on the NYS Comptroller to examine the manner in which he calculates municipal contributions to the pension fund, and provide much needed relief to local taxpayers by freezing – and hopefully reducing – the burden of this enormous state mandate.”