ALBANY, N.Y. (AP) — A federal bankruptcy court’s decisionin Detroit last week putting that city’s
constitutionally protectedpublic pension on the table for cuts cracks the door open for pensionreductions in
New York.The concern among unions is that theassurance that New York’s public workers have operated under
since 1938 —that pensions "shall not be diminished or impaired" — could now bethreatened by local
governments fighting off insolvency."It’s aturning point. … What has been sacred — pensions — are not
sacredanymore," said Syracuse Mayor Stephanie Miner, who has been a leader inseeking action to save New
York’s distressed municipalities frominsolvency. That has so far been avoided through higher taxes
andlayoffs and reducing services.The Detroit decision could give struggling municipalities leverage in
negotiating other concessions to avoid bankruptcy court.Minersaid Albany — where politicians’ campaigns
benefit greatly fromorganized labor’s money, volunteers and votes — will also have to takenotice. She and
some other local leaders have long sought far moreaction from Albany, including relief from unfunded,
state-mandatedprograms.Now, inaction could drive a municipality to bankruptcy for relief and be worse for
unions.StateComptroller Thomas DiNapoli has determined at least 23 cities, countiesand towns from Niagara
Falls to Nassau County are significantly ormoderately stressed. Seventeen others from Erie County to
theAdirondacks town of Newcomb are "susceptible" to stress.InNovember, Gov. Andrew Cuomo signed a
law to allow Rockland County toborrow $96 million to address its deficit, even as county taxes rise tohelp
meet the shortfall."While municipal bankruptcy has neverhappened in New York, it is clearly not beyond
the realm ofpossibility," said Peter Baynes of the New York Conference of Mayors. Hesaid the state must
help more because the problem bleeds beyond citylines.The stressed New York municipalities share many of the
samepressures as Detroit: Aging communities losing population, leavingdiminished tax bases strapped by a
legacy of growing health care andpension costs from historically large public workforces. The result
hasdriven away employers and young New Yorkers.For some, the judge’sdecision to make Detroit’s pension fair
game came as no surprise. Theysaw it happen 40 years ago, and it helped save New York City
frombankruptcy.With New York City facing default, United Federationof Teachers union President Albert
Shanker met with Gov. Hugh Carey inthe apartment of Richard Ravitch, who Carey brought in to prevent
thecity’s bankruptcy. They agreed pensions would have to be on the table tonegotiate a survival short of
that.The reality that enteringbankruptcy would end the constitutional protection of pensions
"wascritical … we never would have gotten the unions," said Ravitch, wholater served as
lieutenant governor. He and former Federal ReserveChairman Paul Volcker issued a nonpartisan task force
report in 2012that said states are grappling with long-term budget problems, includingpension costs.Unions
representing nearly 2 million publicworkers and retirees statewide, most with pensions of $20,000 to
$43,000a year, say the Detroit decision is cruel, unfair and unnecessary inNew York."This was a ruling
that should send chills through everyworking American," said Stephen Madarasz of the Civil Service
EmployeesAssociation union, which represents 265,000 members. "It reallysuggests that any semblance of
the social compact is dead."Madarasz said he fears the ruling will be used at the negotiating table as
leverage by "unscrupulous" politicians."They will probably do that at their own peril,"
he said.Illinois has already trimmed some retiree benefits, and Stockton, Calif., has cut the cost of
retiree health care."Thisshould remind them of what Hugh Carey was reminding city workers 40years
ago," said E.J. McMahon of the Empire Center for Public Policy, afiscally conservative think tank.
"That all bets are off."Thestate comptroller who is the sole trustee of the state pension fund
saidhistory shows New York’s pension members should feel secure because thestate’s fund is fully funded, as
opposed to Detroit’s city pension."Evenin the unlikely event of a bankruptcy, New York’s public
pensionsshouldn’t be affected," DiNapoli said Sunday. "For more than 90 years,the more than 3,000
participating employers have consistently paid therequired contributions necessary to fund the benefits for
employees andretirees in return for their public service."Copyright 2013 The Associated Press. All
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