Cuomo makes a promising(?) deal

by E.J. McMahon |  | NY Torch

Gov. Andrew Cuomo has just announced a tentative contract agreement with one of the state’s smaller unions, including some potentially significant labor concessions that could set a pattern for achieving the $450 million in workforce savings assumed in the new state budget.

Based on the governor’s press release, key aspects of the deal with Law Enforcement Council 82 include the following:

  • a three-year pay freeze on pay, including longevity step increments;
  • an increase in employee share of health insurance premiums, from 10 percent to 20 percent for individual coverage, and from 25 percent to 35 percent for family coverage;
  • new co-pays for hospital services and medical visits, and encouragement of mail-order prescription drug refills;
  • a reduction in the amount of sick time that can be credited to health insurance for retired employees; and
  • exclusion of sick days from accrual of time worked for purposes of qualifying for overtime compensation.

Council 82 had been one of the few remaining holdouts from the 2007-11 state contract cycle, when major unions including CSEA and PEF agreed to base pay hikes of 14 percent, plus some extras.  As reward for their concessions going forward, Council 82 members will retroactively get the same settlement for that period.

Council 82 is a relatively small union, covering 1,160 State University police, Park Police, Department of Environmental Conservation Officers and Forest Rangers. If other state unions make the same concessions, what the governor projects as “system-wide” savings would add up to $430 million — including $178 million for the increase in health insurance premiums, $196 million from the change sin co-pays and prescription drug refill, $45 million from the change in sick-leave credit and $11 million from the overtime reform. At least it would appear that way, assuming the term “system-wide” is translated to mean “if the same changes applied to the entire state workforce.” Indeed, on a statewide basis, a freeze on step increments would save another $140 million a year for as long as it lasts.

A key unanswered question: State labor contracts usually have a duration of four years, but the governor’s news release describes a pay freeze that lasts for three years.  So what’s the term of the Council 82 deal? Any back-loaded goodies in there?  ** UPDATE: A journalistic source quotes the governor’s office as saying it’s a three-year contract. That’s another big plus for Cuomo — because if steps aren’t included in the agreement when it expires, there will be no Triborough effect. **

The health insurance savings seem genuinely significant, with those “system-wide” numbers amounting to a 19 percent savings for taxpayers in this category (i.e., premiums for active employees). The sick leave credit is less impressive, amounting to just over 3 percent of the $1.3 billion the state will spend on retiree health care in 2011-12. However, the governor has more running room on this, since unions in the past have agreed to study the possibility of changing the eligibility guidelines for retiree health care.

The missing details will determine whether, on balance, this a major breakthrough. Based on what’s been released so far, it may be a promising pattern.

P.S. — Anonymous commentator “Park Cop” (#5 below) points out an error in my original post: Council 82 was not a holdout in the 2007-11 contract round, but had been without a contract since 2005.  There’s obviously a longer back-story here.  No doubt an interesting one.

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- E.J. McMahon is the Research Director at the Empire Center for Public Policy.