New York Gov. Andrew Cuomo, pressed by critics including Comptroller Thomas DiNapoli, dropped a plan meant to give pension-cost certainty to local officials that might have left the system unable to pay benefits.
An alternative measure agreed to by Mr. Cuomo, Mr. DiNapoli and lawmakers supplements a way that member employers can choose to defer some payments, allowed by the comptroller since 2010. The new method was included in an accord reached Wednesday on a $136.5 billion budget. Lawmakers could begin voting on the spending plan as soon as Friday.
“It is my job to protect the 1 million members of the retirement system, and all New York taxpayers, from irresponsible actions and fiscal gimmicks,” Mr. DiNapoli said in a statement. He had said Mr. Cuomo's plan could have left the $150.6 billion New York State Common Retirement Fund, Albany, unable to pay benefits because it limited his ability to raise payment rates if market outcomes fell short of predictions.
The new measure in the New York budget accord, coupled with the previously permitted deferral mechanism, is meant to ease the effects of rising pension expenses and a 2% annual cap on property-tax increases, according to Mr. DiNapoli.
The added mechanism lets participating employers defer part of their payments, making them over a longer time and at a different interest rate than the current system allows. It would be available to local governments outside New York City, as well as school districts and cooperative educational services. It also would be open to public hospitals in Erie, Nassau and Westchester counties.
In fiscal 2013, 137 local governments deferred $368 million through the program, according to state budget documents and Eric Sumberg, a spokesman for Mr. DiNapoli.