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Comptroller’s Report - June 25, 2010

Health Care and Pension Costs Increases Are Out of Control

State and Federal governments must take action to stop insurmountable health care and pension costs that are crippling local municipalities. Health Care Premiums for County employees and retirees are expected to increase on average 17.5 percent in 2011. Pension Contribution demanded by the State Comptroller could increase by 45 percent. These jumbo increases are putting extraordinary financial pressures on County’s finances and ultimately on local taxpayers. These increases could cost the County over $84 million in 2011 on top of the $331 million paid for these benefits in 2010 and could destroy many jobs in both the public and private sector.

Nassau County employees, as well as most government employees throughout the state of New York, are enrolled in the New York State Pension system and the New York State Health Insurance Program (NYSHIP). The federal Health Care Reform Law was supposed to prevent double digit premium increases. This is not happening. Pension contributions are skyrocketing because of underperformance of the State Pension Fund. In both cases the consequences are borne entirely by our local taxpayers.

The Health Care and Pension Costs in 2011 could cost Nassau County over $140 million for the pension fund and up to $275 million for health insurance premiums. These two benefits could be an outrageous 47 percent of the gross payroll of $884 million in 2011. The comparable private sector number is less than 20 percent.

These proposed increases will have a devastating affect on the County’s finances next year and for years to come if nothing is done now. That is the reason why my office has been sounding the alarm from the moment we received these double digit proposed increases.

Two months ago Nassau County Executive Ed Mangano and I met with U.S. Senator Charles Schumer to try and find a way to reduce the increase for the health insurance premiums and just last week I wrote to New York State Comptroller Thomas DiNapoli asking him to recalculate how much we have to contribute to the pension fund.

The bottom line is Nassau County, or any other local government, cannot afford these double digit increases. In order to protect the taxpayers of our County we can not remain silent.