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March 8, 2011

The Battle of the Union

Public employees versus taxpayers

For more then thirty years, the politicians in Albany have represented the interests of the public employee unions against the interests of the taxpayers. In return, the unions provided foot soldiers and money to their legislative allies ensuring their re-election and the people of this state got struck with the bill. Now the bill has imploded with interest. While people understand politics, they don't accept arrogance. The time has come for action not words, substance not one house bills. If the state is to become the Empire state again, now is the time for substantive reform.

Around the country, states like Tennessee, Ohio and yes Wisconsin have taken on the problem in a bold way by reining in the unchecked power of public employee unions. New York on the other hand has taken a restrained approach that is unlikely to produce any significant savings. Creating a sixth pension tier will help in the future but does little in the short run to resolve exploding pension costs and escalating medical costs. One modest reform which passed the Senate was the elimination of the union negotiated rule, last in, first out which pertains to the lay off of public school teachers. Civil service is considered a merit based system, yet this rule conflicts with that principle as it maintains a job based seniority system regardless of performance. While this will help reform our education system by keeping good teachers, it fails to address excessive labor costs strangling state and local governments.   

In 2009, the average per capita income in New York was $46,957 yet a significant number of public employees significantly exceed that amount. Examples include public school teachers in New York City and Long Island who have incomes exceeding $100,000, Police Officers on Long Island who earn on average $125,000 and employees of the MTA, Metro North who earn on average $87,000 per year. While there is nothing wrong with negotiating a fair salary and benefits, reason has gone out the window when the average Nassau County cop cashes out with on average $250,000 excluding their pension. Yes, it cost a lot to live on Long Island but it also cost a lot to pay the taxes to pay public employees. As to pension costs, the New York Post reported in detail how Long Island Rail Road employees are routinely granted lucrative tax free pensions, disability pension abuse by the FDNY and how top brass of the uniformed services win three quarter disability pensions while claiming questionable line of duty injuries. How can this be sustainable?

One of the most destructive elements in New York is the level of taxation. During the last election, the issue was taxes, taxes, taxes. One of the drivers of taxation is the cost of public employees. New York has the second highest number of union members in America, around two million. More then half are state and local government employees. While private sector unions understand that their success in negotiating for salary and benefits is contingent on their employer being competitive and making a profit, public employees have become out of touch with fiscal reality. With more then 860 public authorities and their employees, the New York Times reported back in July that they were unable to get an accurate count of public employees on the state payroll. It's fair to say that the growth of government has spiraled out of control.

The question for the Governor and the legislature is, what are you prepared to do? In order for New York to survive, aggressive action is needed. The Triborough amendment to the Taylor law needs to be repealed. The change enacted in 1982 prohibits the state and local governments from altering any provision of an expired union contract until a new agreement is reached. This allows unions to drag out contract negotiations while their members continue to receive pay hikes. This removes any incentive on the part of the union to negotiate in good faith and puts taxpayers at a disadvantage. Eliminate compulsorily arbitration. Is it any wonder why Long Island Police earn the highest salaries in the nation? Just drag out the negotiation process and force arbitration. The arbitrator often looks to local police departments for pay parity when deciding what to award. Without a doubt, taxpayers lose again. Eliminate labor mandates that force local governments to pay for excessive leave policies. Repeal all pension sweeteners enacted over the last ten years for new employees, increase the age of retirement to 62 and extend the current twenty year retirement provision to twenty five years.  

The time has come for serious reform not stop gap measures. The proposal to cut ten billion dollars from the 2011 state budget returns the state to 2009 spending levels. Keeping the growth of Medicaid to 4% does nothing to reduce the level of spending which equals that of California and Texas combined. Pushing a LIFO light measure is window dressing when addressing public employee unions. The time has come to choose, the largesse of public employee unions or taxpayers. The battle rages on.