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City business administrator Brian O’Reilly is likely breathing a little easier this evening, as both the state Senate and Assembly passed legislation allowing local governments to not pay half of their commitments to the state pension funds this year. The city budget that is slated to be voted into law on March 25 factored in the $14.8 million in payments the city is able to defer, and if it hadn’t passed, O’Reilly would have been tasked with figuring out how to make up for the shortfall.

The plan, which didn’t gain traction when first introduced in December, was tweaked a bit to create the bill that passed today. Municipalities can now only defer payments for one year (it had originally been a three-year phased program) and the repayment period — which will start in 2012 — has been shortened to 15 years from 30.

The bill passed the Senate by a vote of 21-17 and the Assembly by a vote of 42-36, both largely along party lines. In press releases, Republicans criticized the bill while Democrats praised it.

Since the bill does not require municipalities to participate, the City Council must still approve legislation authorizing the city to take part. It’s safe to expect that to be on the next council agenda.