NYAOT & NYCOM Make Joint Statement on Tier 6 Reforms

The New York Association of Towns (NYAOT) and the New York Conference of Mayors (NYCOM) recognize that the Tier 6 changes enacted in the final state budget are more limited than earlier reforms that had been discussed. We also appreciate the importance of strengthening the public-sector workforce and supporting efforts to recruit and retain employees in local government service. However, even as enacted, these changes will result in new pension costs for local governments and local taxpayers. In fact, municipalities believe recruitment and retention efforts are multi-faceted – hence our disappointment at the missed opportunity to have increased the public retiree earnings cap in the state budget as well.

Any Tier 6 benefit enhancement, even one narrower than originally proposed, has real and recurring fiscal consequences for municipalities. These are ongoing employer costs that local governments do not control and must manage within already constrained budgets. Cities, towns, and villages are already managing the property tax cap, rising labor and health insurance costs, infrastructure needs, public safety demands, and other budget pressures. Even scaled-back Tier 6 changes will place pressure on local budgets and, ultimately, local property taxpayers.

Additional municipal aid from the State should not be viewed as an offset for these new pension obligations. Unrestricted state aid to local governments has increased only minimally over the past several decades, while the cost of providing essential services has continued to rise. Long-overdue increases in state funding for local governments help address years of underinvestment; they do not eliminate the fiscal impact of new, recurring pension costs.

Pension changes may be one part of a broader workforce development conversation, but they should not be treated as the only tool available to support recruitment and retention. NYCOM and NYAOT continue to advocate for sustainable investments in training, civil service modernization, health insurance affordability, increasing the salary cap for retirees returning to public service, and other resources that help build and maintain a strong public-sector workforce without creating new unfunded cost pressures.