June 25, 2009
Whither the state workforce reduction?
Will the state of New York have enough money to pay its current employees?
That question arises with the Assembly's quick exit and the Senate's paralyzing chaos. Both have failed to address a huge gap in the state's payroll budget.
Of course, Governor David Paterson could call both houses back to Albany to address the situation. His proposed modest Tier 5 pension plan offers only a partial solution, but the Legislature can't pass it until he releases his amended bill which he failed to do before the Assembly departed early Tuesday morning. Paterson also proposed $20,000 in departure incentives for 4,500 workers.
Let's go back to March when the Legislature was preparing to pass the $132 billion budget.
To close a budget gap, Paterson threatened to layoff 8,700 state workers unless two unions agreed to contract givebacks: forgoing a 3 percent raise and delaying five days of pay. Together the two measures would save $301 million a year according to the Division of the Budget. With attrition, DOB said at the time workforce savings would total $481 million.
Civil Service Employees Association and the Public Employees Federation refused to make any contract concessions. But rather than face July layoffs, the unions negotiated a deal with the Paterson administration. They agreed to $20,000 buyouts for 4,500 employees and to support Paterson's Tier 5 pension plan. The Legislature presumably must approve both parts of the deal.
Critics dismissed the Tier 5 plan as inadequate (here and here). Behind the scenes, unions not part of the agreement tried to scuttle the bill.
A key legislator hinted Tier 5 legislation would not move in his house without widespread union support. "How can everything fall into place because [the Paterson administration] had three of the 48 bargaining units?" said Assemblyman Peter J. Abbate Jr., a Democrat from Brooklyn and chairman of the Assembly's Labor Committee. "For some reason they must have believed that."
Mr. Abbate, who has close ties with the labor community, said he waited until the wee hours in the Assembly chamber but never got a new version of the bill. So where does this leave the state? State workers continue to collect their raises--and the state has a hole in its budget.
Meanwhile, New York City Mayor Michael Bloomberg, who supports pension reform, has made concessions with the United Federation of Teachers. Rather than raising the retirement age to 62, it would remain at 55 for teachers. New teachers would have to contribute more to their pensions. For press release, here. For stories, here, here, here, here,here and here.
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