Either Cuomo is looking to raid the pension funds, perhaps offering even earlier retirement in exchange, with the cost deferred. Or the pension funds are looking to raid whoever will be paying back the debt, by having the state pay a higher interest rate than it could get by just issuing bonds. Or perhaps Cuomo hopes that by locking public employee pension funds into a lower rate of return, and then jacking up local government contributions to the funds to make up for it, he can force local governments to fund the state budget. Regardless, when politicians and pension funds get together, there is no doubt who is being made worse off. Future generations of less well off people who don’t even get pensions themselves. Because both pension funds and municipal bonds are tax free, it makes no sense of pension funds to invest in municipal bonds. This is just another way for Generation Greed to defer the disaster it has created for the future, now the present, into the later future. Hey Governor, if you want to borrow, put a referendum to the voters, as the state constitution requires. If the pension funds want to invest in the bond issue at the market clearing interest rates, they would be free to do so.