February 23, 2012 The Honorable Thomas DiNapoli State Comptroller 110 State Street Albany, NY 12236 Dear

Comptroller DiNapoli: We write with great concern over your repeated opposition to enacting the vital pension reform that New York State taxpayers desperately need. In the past 30 years, public and private pension systems have become transformed. This is in part because of fiscal need, and in part because of the desire of the workforce. Now is the correct time for New York to amend its current pension offerings and provide the workforce with options while also charting a fiscally sound course. The newly proposed Tier VI is not a radical plan. It would give state and local employees the choice of joining a defined-contribution plan, or the traditional pension. The proposal would affect only the future workforce. Some have argued that since New York had pension reform in 2009, its too soon for further adjustments. Governor Paterson's Tier V, however, did not go far enough. In the last two years, a majority of other states have enacted significant revisions to at least one state retirement plan. Rhode Island enacted the most dramatic revision of a statewide plan in 2011. Legislation passed in November will close the defined-benefit plan that covers state employees (except for judges and some public safety members), teachers, and many municipal employees in the state. Rhode Island had to adopt a radical plan, because the state could no longer meet its obligations. New York must act to prevent that from happening here. We support giving the state workforce a choice, but what we care most about with pension reform is simple: a dollar saved in the pension system is a future dollar our government wont be forced to either cut in services or tax us to obtain. Tier VI is projected to save taxpayers $123 billion over the next 30 years. By not publicly supporting this reform, you are helping those that are worried about their personal or parochial interests and not the interest of the public atlarge. If a new Tier VI is not adopted, New York taxpayers could be exposed to $123 billion more in taxes. Given the limited options municipalities have to obtain

revenue, the majority of the funding would likely come in the form of property taxes. We estimate that the local Tier VI savings outside of New York City is $49 billion. Businesses pay about 35 percent of local property taxes. Without a Tier VI, New Yorks businesses could face a $17.15 billion increase in property taxes. In New York City, savings from Tier VI are projected to be $30 billion. Businesses pay about 42 percent of property taxes, which would result in a $12.6 billion property tax increase. These are dollars that could be used to boost our economy and create jobs. Over the past year, we have been encouraged by the actions our state government has taken to cut costs, but one of the greatest strains on our state's fiscal health continues to put our collective financial future in jeopardy: the state pension system. New York's pension system is outdated, overpriced, and unsustainable. As one of our state's leaders, we expect you to do what is right for all New Yorkers, not just special interest groups. Join us in the movement to bring pension reform and help us secure the financial future of the state we love. Sincerely,

Heather C. Briccetti, President and CEO The Business Council of New York State, Inc.

Michael P. Durant, New York State Director National Federation of Independent Business

Brian P. Sampson, Executive Director Unshackle Upstate CC: The Honorable Dean Skelos The Honorable Sheldon Silver

February 23, 2012

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