Municipalities around New York State received bad news from Comptroller Alan G. Hevesi this week. In August of 2002 they were told to expect an increase of 4 percent of their payrolls in annual contributions to state pension funds. This week they were told that that 4 percent would have to be increased to 11 percent. North Hempstead Town Supervisor May Newburger, who is recuperating from hip surgery, said that she was pleased that Comptroller Hevesi got the bad news out to the municipalities as early as February. "If he waited until August of 2003 we wouldn't have had time to do much about it. We may have to trim back some capital projects," she added. "We'll be talking to the heads of all the departments."

Comptroller Hevesi said in a letter to the municipalities: "In August 2002 you were furnished advice for estimating the employer contribution rates that would be used in calculating the December 15, 2003 payment. The estimated rates assumed that the stock market would return to its April 1, 2002 level by March 31, 2003. This means that the Dow Jones Industrial Average would have to reach 10,400 and the Domestic Equity Market as registered on the Russell 3000 would have to reach 638. As the fiscal year draws to a close, this assumption seems very unlikely. The Dow Jones as of January 31, 2003 was approximately 8000 and the Russell 3000 was approximately 474. Therefore I am providing you with updated estimated employer contribution rates and worksheets to be used to estimate the December 15, 2003 payment."

North Hempstead Director of Operations Matthew Miner said that had the 4 percent increase been accurate, North Hempstead would have owed a contribution of $704,298. "We thought at the time that was an optimistic estimate," he said, upon receiving Comptroller Hevesi's letter. "We budgeted a 7.3 percent increase in our 2003 budget. That would have amounted to $1,260,961. With this recent information, our contribution will have to be $1,936,819." In other words, from August 2002 to February 2003, the estimated increase is $1.2 million, having a $675,000 impact on North Hempstead's budget. Mr. Miner added that North Hempstead had just switched insurance providing the town with $150,000 in savings, so there will be $525,000 added to the town's expenses.

This hit to the budget comes immediately after the town has just about depleted its overtime budget as a result of the Presidents Day blizzard. Mr. Miner said that New York State had declared that storm a state of emergency for which the town hopes to be reimbursed for some of its blizzard-related expenses.