Rick Karlin’s August 8th article in the Times Union, which you can reach here, is a reminder of the crushing burden local governments continue to struggle with – retirement costs. The article speaks to the practice of amortization or borrowing a percentage of retirement costs in order to minimize immediate costs with the tradeoff of paying the costs with interest down the road.
In Cohoes, we have been fortunate we have not had to tap this tool at this time. Additionally, we continue to be able to make the payment in December of each year as opposed to paying the now popular “late fee” for the following February payment. The borrowing, an idea approved by the legislature and encouraged by the state Comptroller, was in my opinion a solid statement of how bad things are getting for local governments as it relates to finances overall and pension costs in specific. When this legislation was passed, I was sure more than one legislator had to turn and close their nose as this is not sound financial practice but at the same time it is a true example of doing whatever one can do when there are no other viable and legal options.
Retirement costs will continue to dog local governments, their employees and the residents they serve going forward. Allowing today’s costs to be repackaged and saved for a later date reflects today’s times and we need to do more to lessen the burden on said local governments if we expect to keep property taxes in check and to continue to provide the services our residents have come to not only enjoy but expect.