New York Gov. George Pataki has appealed a decision that labeled as unconstitutional his $230 million "raid" of the New York State and Local Retirement Systems for the state budget.
New York state Supreme Court Judge Thomas Keegan said in his ruling the governor and the Legislature must now pay $130 million in cost-of-living adjustments to system retirees retroactive to Sept. 1.
The governor and the Legislature made the adjustment contingent on the use of the $230 million.
New York Comptroller H. Carl McCall, the sole trustee of the retirement system, sued Mr. Pataki in July, alleging the raid was unconstitutional.
The governor and the Legislature in June took $230 million from the retirement system's $360 million Supplemental Reserve Fund, which is used to pay retiree COLAs.
The adjustments are not guaranteed; the retirees rely on the governor and the Legislature to grant them.
To insulate against a suit, Mr. Pataki and the Legislature inserted a provision into the law that would delay payment of the COLA if a suit were filed challenging the use of the $230 million in assets.
Mr. McCall made no secret of his intent to sue the governor if he raided the fund.
"I think he's (Mr. Keegan) wrong," said the governor.
"This proposal was supported by both houses of the Legislature and we thought it was a very balanced approach and it's not in any way preventing the pension supplementation."
The governor seeks to use the money to pay state and municipal contributions to the retirement system.