Governor David Paterson wants state employees to defer four percent raises and five days of salary until they retire or quit their jobs. Haven’t we seen this movie before?

What makes Paterson think the outcome will be any different than when public employee unions rejected similar proposals last year?

Here’s what Paterson is proposing this year:

• Salary Deferral. Personal service savings could be achieved through deferring salary payments in 2010-11 until an employee leaves State service. At such time, employees would be entitled to a lump sum payment based upon the rate of basic annual salary in effect at that time. In no event would the lump sum payment be less than the amount of salary originally deferred. A five-day salary deferral was previously implemented during the 1990-91 fiscal crisis.
• Delay or Reduction of the April 1, 2010 Four Percent General Salary Increase. A number of bargaining units representing State employees are currently scheduled to receive a four percent salary increase in the 2010-11 fiscal year. The Governor is rescinding, for the second consecutive year, the general salary increase for the State’s non-unionized Management/Confidential employees ($28 million in 2010-11).

This year’s plan is targeted to save $250 million in the first year and $125 million in the second. Of course, those are temporary savings, because the state eventually would have to repay workers when they leave their jobs.

And here’s (DOB link deactivated) last year’s failed plan:

• Implement Salary Deferral. Defer 5 days of salary payments in 2009-10 until an employee leaves state service or the fiscal crisis is declared to be ended (whichever comes first). At such time, employees will be entitled to a lump sum payment based upon the rate of basic annual salary then in effect. In no event will the lump sum payment be less than the amount of salary originally withheld. A 5-day salary deferral was previously implemented during the 1990-91 fiscal crisis. (2009-10 Savings: $121 million; 2010-11 savings: $0)
• Eliminate Scheduled 2009-10 Salary Increases. Eliminate salary increases scheduled for 2009-10. These increases were negotiated during better fiscal times. Even after this action, over the four-year life of their contract most workers would still receive a salary increase of 10 percent (3 percent in 2007-08, 3 percent in 2008-09, 4 percent in 2010-11). (2009-10 Savings: $180 million; 2010-11 Savings: $180 million)

The unions called last year’s plan dead on arrival when Paterson proposed it in late 2008. Then last March 24–a week before the budget passage deadline–Paterson issued a belated threat: if the unions didn’t agree to his plan, he’d lay off 8,900 state workers.

The threats went unheeded.

Instead, Paterson agreed in June to let up to 4,500 employees collect $20,000 in severance buy outs if they agreed not to oppose creating a Tier 5, which turned out to be a tepid “reform” of the pension system (here and here).

It later came out that Paterson tied his hands by agreeing not to lay off state workers before December 31, 2010 (here and here). Lawyers may disagree on how solid the no-layoff clause is.

Having appeared to surrender his biggest bargaining chip–threatened layoffs–Paterson may have doomed his odds of persuading the unions to defer pay raises and five days of pay.

Originally Published: NY Public Payroll Watch