Budget & Taxes (Pensions)

This bill changes how certain public employees in New York contribute to their retirement systems by replacing a flat 3% rate with a tiered system based on their annual salary. Starting in the 2026 plan year, employees earning up to $75,000 will still pay 3%, while those earning between $75,000 and $100,000 will pay 4%, and those earning over $100,000 will pay 5%. The law also clarifies that these contribution rates are calculated using the employee's wages from the previous two-year period and excludes overtime pay from the calculation. New hires will have their contributions based on projected wages for their first three years of service.

This bill sets limits on property tax increases for New York counties, cities, towns, and villages (excluding New York City and certain counties). It specifically caps how much local governments can raise taxes to cover teacher retirement costs when the required contribution rate jumps more than 2 percentage points from the previous year. The law clarifies that these limits apply to most property tax levies but exclude certain special assessments authorized under specific state provisions. The goal is to prevent sudden, large tax hikes on residents by tying increases to predictable factors like retirement system costs.