Double dipping is legal, but wrong
Obviously, there is a huge flaw in the state pension system.
I don’t begrudge anyone for getting a pension. I think pensions earned in the public sector are too generous and most people in the private sector would agree because we pay for them. The reasons for this, I think, are two-fold.
One, unions carry tremendous political clout and can swing elections, so rather than ruffle the unions, the politicians charged with negotiating contracts just give away the house.
The second is that politicians, too, take advantage of the pension system. Why would they enact laws that penalize themselves?
There are about 900 people who received a waiver to earn more than the statutory limit of $30,000 while still collecting a full pension, according to the Empire Center, a non-partisan conservative leaning think tank.
That waiver is not necessary for those more than 65 years old and it’s not clear how many take advantage of that huge loophole and double-dip without a hint of shame.
The issue came reared its head again locally when Albany County Republicans held a press conference to criticize Supervisor Paula Mahan for taking her $81,758 pension earned from working in the North Colonie School District and her full supervisor’s salary of $123,006.
She is an elected official and elected officials are exempt from any pension restrictions, so she could have started collecting her pension when she was sworn into office in 2008. Instead, she rolled the school district pension credits into the state system and waited until 2016 to “retire” and then get sworn back into office. Perhaps even on the same day or at least in the same week.
It’s how the state retirement system is set up and legislators at the Capitol have been taking advantage of legal double dipping for years.
Mahan’s opponent this year, George Scaringe, a longtime political party chair, is also earning a state funded pension. More on that later in this column.
I don’t think anyone is accusing anyone of breaking any laws and that’s part of the problem. Not so much for the people double dipping, but certainly for poor schleps like you and I who have to pay for it.
And it’s not only Mahan. Two of her top appointees are also double dipping.
Mike Magguilli, the town attorney, has been with Mahan for a few years now and he was allowed to retire on Feb. 27 so he can begin collecting his $71,149 pension. A day later, the Town Board hired him back at $80,000. So he is really making $151,149, well above the $105,913 allocated for town attorney in the 2020 budget. I’m told his salary will remain at $80,000 in 2020 but that is what’s allocated in the budget.
Rosemary Newton is a more egregious example. Newton was the human resources director when Mahan took office in 2008. She retired in 2010 with a $79,247 pension. In March, after she turned 65, the Town Board, by resolution, amended her salary to $57,740 an hour, or $67,900 a year. The salary in the 2020 budget is $88,131 for the human resources director.
Mahan said she was advised to “retire” because if she is not in the system and something happens to her, her husband and family would be shortchanged by not getting her full pension. I guess the system is set up so the spouse is taken care of if a person is already retired.
But, let’s not forget, the taxpayers of this state, through the pension fund, have been paying Joe Mahan, Paula’s husband, $31,593 a year since 1989. That’s $947,790.
Yes, you can argue the pension system is self-supporting in that it is heavily invested in Wall Street. But, take a look at any municipal budget and you will see large line items in each department allocated for “benefits.” Part of that is retirement, or the cost each municipality must pay to keep the pension fund whole.
By law, the pension fund must have enough money to pay every retiree their pension for life and have enough to pay every active employee their pension. It’s a huge sum of money that changes daily but is in excess of $210 billion dollars.
When Wall Street does well, the municipality doesn’t have to pay as much. When it doesn’t the municipality has to pay more to pick up the cost. I say the municipality but one of the few ways any government raises money is through taxes. Guess who pays taxes?
It’s a convoluted formula, but local contribution for employees in the state retirement is about 14.6 percent of a base salary. For those in the police and fire retirement system it’s about 24.4 percent. We are not talking about small amounts of money.
What Mahan and company say is true. It might save the taxpayer some money in pension contributions for those already in the system — like Magguilli and Newton — but it’s just wrong on a number of fronts to have someone collect a full public pension and a full public salary.
If Peter doesn’t pay, Paul does. If it doesn’t come out of the left pocket, it comes out of the right. It’s all public money and public money means taxes. Right now things on Wall Street are going OK but once it starts to tank, and it will eventually, that means we contribute more and that means taxes go up. If they don’t, less roads are paved, fewer school books are bought and maybe we can wait for the snow to melt rather than paying drivers overtime to plow.
I don’t know how to be any more clear. I don’t care how town Democrats try and spin it. Double dipping doesn’t even get to take the smell test let alone have a chance of passing it.
Now, back to Scaringe.
While Mahan is taking care of herself and her people in 2019, 15 years ago, Republicans were taking care of Scaringe.
“You paid this man 62G for 4 Hrs. a Week” screamed the 2004 New York Post headline. That “man” is George Scaringe, the Republican candidate for supervisor, the former Town of Colonie and former Albany County Republican Party chairman. He got the basically no-show job with the Hudson River-Black River Regulating District thanks to Gov. George Pataki, a fellow Republican.
Not only did he make a pretty good buck, he got full pension credit for his four-hour a week job and now brings home $53,978 a year in retirement.
I’m sure he earned it.
Or, at least I’m sure he is not losing any sleep over not earning it. Just as I’m sure the Mahans aren’t either.
A couple things scream for some kind of reform. Nobody should be allowed to make anything more than the set $30,000 and collect a pension from New York state. Elected officials, appointed officials or anyone of any age by any type of waiver granted by anyone for anything. You want to keep working, keep working. You want to retire. Retire.
When too many start taking advantage of the system, the system has to change. The problem is, the ones taking advantage of the system are the ones in charge of it.
Jim Franco can be reached at 518-878-1000 or by email at [email protected].
