The Village of Mineola as well as all other municipalities will be bracing for a big increase in the contributions to the New York State Retirement System for municipal employees. The hefty increase will force mayors and supervisors to tinker with budgets by either raising revenues or cutting spending to make up for the increase.

Municipalities have been forced to deal with rising pension costs over the last few years for their employees, but the stagnant stock market has forced an increase that may force many mayors and supervisors to scramble for budgetary solutions.

In the case of the Village of Mineola, according to village treasurer Richard Dwyer, the village paid the state 1.5 percent of its payroll out of its 2002-2003 fiscal year budget as the contribution to the New York State Retirement System. For the 2003-2004 budget, which is the one the village is currently operating with, 4.5 percent of the total payroll went to pension costs. However, in the next year's 2004-2005 fiscal year budget, the village will have to contribute 11 percent of its payroll. In monetary terms, the village's budget will increase by $350,000 to $400,000 just to pay for the rising pension costs.

Mineola Mayor Jack Martins said the village will either have to cut spending or raise revenues to make up for the $350,000 to $400,000. "One way or the other, residents are going to feel the impact of this," he said.

The decision concerning the municipalities' contribution to the New York State Retirement System was handed down from the Office of the New York State Comptroller.

Leaders of local municipalities feel that the state comptroller's increased pension cost mandate puts an unfair burden on municipalities who are conscious of increasing taxes in tough economic times.

Kate Murray, supervisor of the Town of Hempstead, the largest township in the nation, points out that the town's contribution to the New York State Retirement System was $500,000 in 2001, but will be $16 million in 2004. "Talk about a budget buster. This is an absolute killer," she said.

In the Mineola School District's proposed 2003-2004 budget, the increased costs for employee benefits amounted to $3,281,360 over the 2002-2003 budget. However, the school cut the budget in other areas to bring the budget increase down to $3,198,969. However, it was defeated by voters.

Assistant superintendent for business and operations John Jackson said one of the reasons the school budget went up is because the school district's contribution rate went from 0.36 percent to 2.52 percent. "They're telling us it's probably going to go up again, maybe over 3 percent," he said. "When the stock market was going great for a while, the rates were down low, the school districts were saving money and everybody was saving money who was contributing to it. As soon as the stock market went into a little bit of a flux period and they weren't making the money they were when the market was going crazy, they had to bump the rates up."

Mayor Martins as well as other village mayors plan on lobbying against such a dramatic increase in the mandated pension contributions. Bayville Mayor Victoria Siegel, who is the president of the Nassau County Village Officials Society, went to Albany on Monday, Nov. 17 to discuss the pension contribution. "That's the one subject that can right now literally destroy municipalities on the financial level," she said.

The Village of Bayville went from a contribution of $15,000 to $79,000 and now to $122,000. "The larger villages that have police departments are being asked to pay in the millions. This is absolutely ridiculous," Mayor Siegel said.

Mayor Siegel believes that with the downturn in the stock market the pension fund lost a lot of money. "We understand that you have to make up some of that money but I do think the comptroller's office is being too aggressive and the municipalities are being asked to pay for their bad gambling debts. They gambled with our money; they lost and now they're asking us to pay," she said.