A temporary freeze on scheduled pay hikes for state government employees (apparently) will continue through September while Governor Cuomo continues to count on aid from Washington to cope with the pandemic-induced economic and fiscal crisis. But the governor’s administrative deferral of pay hikes still falls well short of what the governor can and should propose to save money and minimize layoffs.

Under current union contracts, about 65,000 state workers represented by the Civil Service Employees Association (CSEA), as well as more than 20,000 corrections officers and other smaller employee categories, were due to see their pay rise effective April 1.

Without ever formally announcing the move, Cuomo’s office in early April took unilateral action to freeze the pay hikes for 90 days, invoking a CSEA pay bill provision that allows “any increase in compensation [to] be withheld in whole or in part from any employee … when, in the opinion of the director of the budget and the director of employee relations, such increase is not warranted or is not appropriate for any reason.” Similarly broad “withhold” provisions are in pay bills for corrections officers and other unions, as we cited here.

With the 90-day period about to expire, the Albany Times Union today reports the freeze will now be extended for another 90 days, until Oct. 1:

In a message to its members, CSEA said they were notified last week by the Governor’s Office of Employee Relations that the previously negotiated pay raises for state workers would be extended another three months.

“The governor has said he is taking this measure in order to avoid the immediate need for layoffs or furloughs,” CSEA wrote. “CSEA continues to support full retroactive payment of the wage increase for all state workers, but we also recognize the dire financial position the state is in and have no desire to see members laid off or furloughed. … We will do all in our power to make sure you get your increases.​”

According to the Division of the Budget, the freeze also has applied to any non-union “management-confidential” employees otherwise expecting raises, and the latest 90-day freeze also will suspend 2-percent pay hikes scheduled to take effect July 1 for other state workers, including about 30,000 State University faculty and professional staff. About 20,000 City University of New York (CUNY) faculty members are due to receive raises in November.

Most of the remaining one-third of state workers, including agency police officers, corrections supervisors, and about 52,000 white-collar workers represented by the Public Employees Federation, are working under expired contracts. Those unions traditionally would be in line for the same raises granted to other workers.

Stealthy freeze

The freeze initially became public knowledge on April 9 when CSEA and union members began to openly complain about it. Asked about the policy at his daily COVID-19 briefing that day, Cuomo described it as strictly temporary, intended “to buy some time” to avoid layoffs while waiting for another round of federal aid, which he then assumed would come by June. Since then, however, the timetable for congressional action on (likely) additional aid to states and local governments has been pushed back from June until late July or early August.

After the April 9 briefing, the wage freeze issue didn’t come up again at Cuomo’s daily briefings until May 28, when one of Cuomo’s top aides cited it among steps the state was taking to save money. “We asked our labor brothers and sisters to forgo the increases in their salaries that were guaranteed by their contracts, which they all agreed to do,” said Melissa DeRosa, secretary to the governor.

That “brothers and sisters” reference was jarring coming from someone who is, after all, a top representative of management. Moreover, if unions have “all agreed” to a freeze, they have never said so publicly. In fact, according to today’s Times Union story, unnamed CSEA officials “said [the union] would continue to press forward with a grievance filed on behalf of members in the executive branch agencies challenging the deferrals.”

An icicle amid a cataclysm

While the unions gripe about it, Cuomo’s temporary administrative freeze on base pay—which does not cover automatic, longevity-based step increments—will not go nearly far enough to address the pandemic crash in public finances.

The state is facing its worst fiscal crisis of modern times, including a current budget shortfall of $9 billion and, starting in fiscal 2021, a structural budget gap of at least $17 billion, according to the last financial plan update. Since mid-March, more than 2 million New Yorkers have filed for unemployment, as of May the state had lost 1.7 million private sector payroll jobs, and many workers still employed in the private sector are absorbing pay cuts. So far, however, New York’s public sector workforce has been largely unaffected.

Under the circumstances, a strong case can be made for a statutory freeze on all public-sector raises, which would save at least $1.9 billion in the coming year and help minimize layoffs down the road. The Legislature’s power to freeze wages in an emergency has been repeatedly upheld in state and federal courts—most recently by the 2nd Circuit U.S. Court of Appeals, in a May decision on a case involving the Nassau County Interim Finance Authority (NIFA).

 

About the Author

E.J. McMahon

Edmund J. McMahon is a senior fellow at the Empire Center.

Read more by E.J. McMahon

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