By David Cruz
Correspondent
If you thought the political/fiscal maneuvering of the budget season was over, you’re going to have to think again. On the penultimate day of the state’s fiscal year, Democrats rolled out a new proposal they say represents fiscal prudence — borrow the $1.3 billion the governor agreed to pay into the state pension now, rather than at the end of the year.
“What we do here wrong is we don’t put the money in until the end of the year, so you lose the interest, and it’s not just this governor, it’s been every governor. So you lose the interest that entire year on that money, and it comes out to $90 some million,” said Senate President Steve Sweeney.
Democrats say the move would let the credit agencies know that the pension payments are being made, something they’ve pointed to when downgrading the state’s credit rating nine times. The cost of the borrowing would be somewhere between $8 million and $10 million, chump change compared to the $90 million it would make in interest once it’s invested by the pension board, they say.
“We borrow about $2 billion at the beginning of the year because the money’s not there until the bulk of it comes in around April, so this is standard practice, and we’re just trying to direct the governor to do the right thing and do this for the pension system that he actually decided to not fully fund because he wasn’t in agreeance [sic] with the revenue raisers that we sent to meet our obligations,” said Assembly Speaker Vincent Prieto.
Republicans scoffed at the resolution, calling it a Democratic side show, a play to their own core constituents rather than a genuine attempt to fix the pension system, which they say is in crisis and threatens to derail every annual attempt at putting together a budget.
“These proposals are short term; they’re political in nature; they’re not realistic. They know these are resolutions urging the governor to do something. None of them are real. This is political theater at its worst,” said Assemblyman Jon Bramnick.
“To do something like this, with an up-front in July, when you don’t know what’s gonna happen in January, much less March or next April, is short-sighted in the extreme,” said Sen. Tom Kean.
To the extent that the governor is even paying attention to any of this, the consensus is that he will dismiss this with the same wave of the hand he employed when Democrats tried to force him to make pension payments on a quarterly basis.
The governor outflanked Democrats again by upping the ante on the Earned Income Tax Credit, proposing an increase larger than even the Democrats proposed. Both houses approved that measure today, with Democrats insisting that they don’t care if the governor takes all the credit for it, which, if past is prologue, he will do, probably starting tomorrow.