krvin mccaffrey told a nassau otb employee that he would do nothing to see thst nassau otb is open on roman catholic easter sunday and greek orthodox easter sunday when tracks are running that bettors want to bet.
Suffolk county democrats should carefully review kevin mcaffrey's acts and omissions as fund trustee
his opininions on financial dubjects are not often credible or other than self serving
talk to members and retirees of local 707
http://www.newsday.com/long-island/li-sales-tax-revenues-grow-leading-to-likely-nassau-surplus-1.12036332Reprints
LI sales tax revenues grow, leading to likely Nassau surplus
Sales taxes revenues grew by 1.7 percent across Long Island in the first half of this year compared to the same period last year, leading to a likely surplus in Nassau while widening a projected budget gap in Suffolk.
In Nassau, the growth in collections is running ahead of the county’s budgeted annual forecast of a 1.26 percent increase. The county will end the year with a $4.7 million surplus in sales taxes if the current pace continues, County Comptroller George Maragos said in a news release.
“We are pleased that sales tax receipts are higher than budgeted and we expect to meet and exceed our projections based on the positive economic [real estate] activity occurring in the county,” said Eric Naughton, Nassau’s deputy county executive for finance.
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In Suffolk, however, collections are less than half the 3.55 percent increase included in the county’s 2016 budget.
“Unemployment is down, job creation is up and we don’t know what is creating this anomaly,” said Connie Corso, Suffolk budget director. “In a typical year, if people were saving money, they would be spending 80 percent of the disposable income, but we’re only seeing 20 percent.”
Suffolk fiscal officials in May lowered projections of sales tax growth for this year to just 2.7 percent, in estimating a $186 million three-year shortfall, heading into the 2017 operating budget.
Corso said the latest sales tax numbers now indicate that county sales tax will only grow by 1.5 percent this year, creating an additional $26.3 million budget hole in Suffolk’s $2.9 billion budget.
Corso said the county budget office has already set aside $10 million in savings from this year’s budget and is asking departments to report back by week’s end on additional steps that can be taken to achieve savings, but so far, they have not imposed any specific savings targets. She said that one of the steps under consideration is cutting back on purchases of office supplies and requiring approval for any spending over $250. The previous limit had been $1,000.
Legis. Kevin McCaffrey, leader of the GOP caucus, said, “None of us are surprised that sales tax revenues are down. We thought the revenues were rosy optimistic when included in the budget based on the history over the last several years. Hopefully, this will be a wake-up call for some of my colleagues who keep spending as if there was a sales tax increase and not an decrease.”
In Nassau, county officials had hoped for a more robust increase in sales taxes this year after collections for the first quarter of this year grew 5 percent. Maurice Chalmers, director of the county legislature’s budget review office, said economic forecasts predict the U.S. growth rate will average 1.8 percent this year, which would put the county on track to reach its sales tax budget.
WHEN A PENSION GETS CUT Struggling 'multi-employer', union pension funds on LI face bleak prospects. Photo Credit: Newsday / Ned Levine
Three union pension funds based on Long Island, and dozens nationwide, have warned the U.S. Department of Labor that they are in danger of running out of money to pay retiree benefits because they have too few workers supporting too many retirees, according to filings and pension experts.
The plans cover close to 9,000 retirees and current workers in the metro area, many of them Long Islanders, and more than 920,000 nationwide, according the Pension Rights Center, a Washington, D.C.-based advocacy group, and the Center for Retirement Research at Boston College, a source of research on individuals’ retirement income.
The U.S. Pension Benefit Guaranty Corp., an agency of the Labor Department that insures private-sector pensions, would give aid to the retirees if the funds ran out of money, but monthly payments would be far below the levels the retirees were promised.
The funds are of a type known as multi-employer pension plans, which generally represent workers from a single union who work for many different employers in related industries such as trucking and warehousing. These industries have been hit hard by deregulation or other economic and technological changes, leading to trouble in the pension funds.
Road Carriers Local 707 Welfare and Pension Funds in Hempstead covers 740 active workers and 3,820 retirees, according to the fund administrator. The union members were at several different companies, many of which have merged or gone out of business, including Yellow Freight, Roadway Express and Consolidated Freightways.
The fund cut benefit payments by about 40 percent for retirees in February after alerting federal regulators it was going to run out of money in the plan year that begins Feb. 1, 2017, according to the fund administrator and pension participants.
“Whatever money was left in the plan, the benefits had to be reduced on a monthly basis so it would last for one plan year,” said fund administrator Kevin McCaffrey, who is also a Suffolk County legislator.
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The fund is considering its options after the PBGC in June rejected its request for another cut. The agency concluded the fund’s proposal would not lead to solvency, according the PBGC letter, a copy of which the local fund sent to Newsday. The fund submitted the proposal under 2014 legislation to help ailing multi-employer funds.
“The application ... was really a last-ditch effort for the fund,” said Joellen Leavelle, communications and outreach director for the Pension Rights Center in Washington, D.C. “They have no resources. There is very little they can do.”
The Local 707 multi-employer fund, Bakery Drivers Local 550 and Industry Pension Fund in Floral Park, Local 138 Pension Trust Plan in Baldwin, and 71 others nationally have notified the U.S. Department of Labor that they are in “critical and declining status,” according to the Pension Rights Center and documents filed with the Labor Department. That status indicates that a fund expects to run out of money in the next one to 19 years, and that the ratio of retirees to working employees is greater than 2 to 1, according to the Pension Rights Center.
The Local 550 fund has just 150 working members, compared with 1,300 retirees, said Richard Volpe, chairman of the fund.
“Right now if [our] fund paid everybody owed a pension for life expectancy, this fund will need at least $180 million to service those benefits,” Volpe said. “We have about $65 million.”
To be sure, struggling multi-employer plans represent a fraction of the 1,400 multi-employer defined-benefit pension plans covering about 10 million people nationwide that the PBGC insures through premiums purchased by the plans. The PBGC also insures 22,000 single-employer plans covering 30 million participants.
But the ailing multi-employer pension funds pose a risk to the PBGC, which in June forecast that its insurance fund for those plans would run dry by 2025 without premium increases.
The PBGC directed a request for comment to a letter that Labor Secretary Thomas Perez sent to House Speaker Paul Ryan in June, saying, “We must address the funding and other challenges of the multi-employer insurance program before it is too late.”
In December 2014, President Barack Obama signed a federal budget bill that contained a multi-employer pension provision that allows ailing funds to apply for permission to reduce benefits to retirees, provided they met certain criteria, including whether a fund’s recovery proposal would lead to solvency. The aim was to cut risks to the PBGC, which is itself highly indebted from bailing out pension funds, experts said.
In multi-employer pension plans, the employers make contributions to a fund, whose trustees come from both the companies and the union representing the workers. The companies are typically small, and by grouping their workers’ pensions with those of other similar employers, the businesses pool risks and save on administrative costs.
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For employees, the plans make it easier to switch jobs among participating employers and still accrue benefits in one pension fund.
The employers’ monthly payments are set by collective bargaining agreements and made on behalf of working participants. Those payments and investment income are the funds’ primary source of funding to pay benefits.
The greater the number of employers paying into the plan and the greater the number of working employees, the healthier the fund is.
If funds run out of money, the PBGC provides financial assistance at a much lower rate. For example, retirees with 20 years of service, who were promised pensions of $2,000-plus a month in the case of Local 707, would receive no more than $715 monthly for the rest of their lives, according to calculations on the PBGC website.
The Local 707 fund is an example of how these funds ran into trouble.
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In the early 2000s, the Local 707 pension fund was more than fully funded at in excess of $400 million, McCaffrey said. The fund was so flush that it issued retirees a “13th,” or extra check each year, a practice that McCaffrey said predated his tenure.
Neil DeStefano, 73, of Franklin Square, a retired warehouse worker, said that when he was working, the fund encouraged people to retire.
“They patted everybody on the back and said if you retire now we will give you this,” said DeStefano, who retired 14 years ago from the former Waldbaum’s Distribution Center in Central Islip. DeStefano had his monthly pension payment of $2,200 reduced to $1,184 after the February cut.
Federal deregulation of the trucking industry, which began in earnest in the 1980s, affected unionized truckers and their companies, as they faced increased competition from lower-cost, nonunion carriers that didn’t offer pensions, said Michael Belzer, associate professor of economics at Wayne State University in Detroit and a former truck driver whose research focuses on the industry.
The Teamsters union, which once represented as much as 60 percent to 70 percent of all workers in trucking, today represents less than 10 percent, Belzer said.
Between 2003 and 2007 a number of large trucking and warehousing companies, where most of the Local 707 pension fund participants work or retired from, merged or went out of business, McCaffrey said. In 2007, a Waldbaum’s warehouse, which employed 200 Local 707 pension fund participants in Central Islip, was sold and closed, he said.
Pension fund member Everett Phillips, 72, a Manorville resident who retired more than a decade ago, estimates that he worked for a dozen trucking companies that have all gone out of business.
More than 65 percent of the fund’s working members are employed by trucking firm YRC Freight, McCaffrey said. From 2009 to 2011 the company stopped making payments to the fund as it struggled financially, McCaffrey said. It resumed payments in 2011 but at 25 percent of the rate it once paid.
YRC Freight declined to comment.
In addition, the Local 707 pension fund lost 25 percent of its asset value during the financial crisis of 2008, McCaffrey said. It couldn’t afford to hold onto all its stocks and other investments until they rebounded because some were sold to raise the money needed to cover retirement benefits, he said.
The problems came to a head in February, when the fund estimated it had $30 million in assets, receives about $7 million a year in contributions from employers, and pays out about $48 million in retiree benefits annually, McCaffrey said.
That month, the fund cut retirees’ benefits by about 40 percent under a federal statute that allows multi-employer pension plans facing insolvency within a year to reduce benefits.
The monthly pension payment for West Babylon resident Milton Acosta, 73, who drove a forklift for the Arkansas Best Freight trucking company in Maspeth, Queens, tumbled from $2,223 a month to $1,400. He said his pension paid the mortgage.
“You work all your life and think you have a pension coming to you, and then you turn around and you have nothing,” Acosta said. “Right now I am struggling.”
Some of the other troubled multi-employer locals on the Island are hoping they can work with employers to come up with options for staying afloat.
Volpe, chairman of the Bakery Drivers local fund since 1975, who estimates the pension plan is about eight or nine years from insolvency, said the fund and Bimbo Bakeries, its only employer contributor, and whose brands include Entenmann’s and Stroehmann, have worked on a proposal to the PBGC aimed at returning the fund to solvency. But he said he couldn’t yet provide details. A lawyer for Bimbo confirmed the talks, but declined further comment.
Volpe estimated that the fund spends about $13 million a year in benefits but takes in just $5 million in contributions.
Local 138 Pension Trust Fund in Baldwin reported in a government filing that it had 319 workers at the end of 2014, and 1,338 retirees. An official there declined to comment.
“When I retired and I signed that contract, they told me that I was going to get this for the rest of my life,” said DeStefano, the retired warehouse worker whose pension dropped nearly in half. “I feel betrayed.”
CORRECTION: A previous version of this story misstated the range of retirees whose benefits were reduced by the Local 707 pension fund.
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