Governor Andrew Cuomo claims that “delivering badly needed binding arbitration reforms” was among his accomplishments during the recently ended legislative session. However, as argued in previous posts on this blog, Cuomo actually squandered a golden opportunity to deliver much more meaningful reform of the 39-year-old, repeatedly renewed but still temporary statute that has done much to drive police and firefighter compensation through the roof in New York.

As if to prove the point, the head of the New York State Professional Firefighters Association (PFFA) says he was not displeased by the result. In this online update for his members, PFFA President Michael McManus revealingly reviews how the arbitration issue unfolded from the union’s perspective.

Cuomo originally sought to impose a 2 percent cap on the value of arbitration awards in a bill submitted in January with his Executive Budget, but backed away from that proposal when the Legislature resisted making any change to arbitration as part of the budget process. With the arbitration law scheduled to expire on June 30, what followed was an intensive behind-the-scenes lobbying effort by the union and its allies. Picking up from McManus’ account:

In mid-June, a hastily called meeting involving the stakeholders and the Governor was held in the Capitol. The intense discussions focused on modifications to the existing law that would accompany an extension that required arbitrators to consider a municipality’s fiscal health and ability to pay prior to determining the structure and magnitude of a contract award. We found this provision preferable, because in large part it mirrors the standards that arbitrators must follow today, and have followed for years. The Governor also advanced a separate notion providing financial incentives to local governments to seek operational efficiencies. [emphasis added]

Supposedly final, agreed-upon program bill language, including changes to arbitration as part of a local “financial restructuring board” law, was released by the governor’s office to the AlbanyTimes Union and posted on the paper’s Capitol Confidential website at 11:49 a.m. on June 18. But within the next few hours, before the governor issued his own news release on the matter in mid-afternoon, two crucial changes were made to the bill.

McManus again provides the back-story.

… In reviewing the details of the bill, NYSPFFA discovered that the Governor embedded language in the bill that would have capped awards and retroactively applied the statute to a series of existing arbitrations. This was totally unacceptable and despite the ultimate consequences, NYSPFFA refused to endorse these provisions and insisted that these elements be removed and the extension amended to a longer term. Our demands were met and the issues were ultimately remedied – the new law would have a three-year sunset clause and only be applied prospectively – to the consternation of our proponents.

In fact, Cuomo’s original program bill was not in any sense retroactive but excluded all disputes in which unions had already petitioned for arbitration. The added changes successfully sought by the union not only pushed back the new temporary law’s expiration date from 2015 to 2016, as the unions wanted, but also excluded disputes that had just reached impasse, which is the bargaining stage before arbitration. That change ensured, among other things, that a contract impasse between the city of Syracuse and its firefighters will not be covered by the new “ability to pay” language (weak as it is).

As McManus reiterates a little further down in his online message, the provisions of the final arbitration bill “largely mirror existing provisions and considerations that have been in practice for many years.” And he’s right: since “ability to pay” is not defined in the law, new language requiring this factor to be weighed more heavily in arbitration awards won’t necessarily change much. It certainly is much less significant than the governor’s original 2 percent cap on base salary and benefit cost increases would have been.

Interestingly, McManus also reports that “Harold Schaitberger and the International Association of Fire Fighters (IAFF) came to our aid, both politically and financially, as did thousands of our brothers and sisters at State Associations across the country.” Schaitberger is president of the 300,000-member IAFF, which represents some 3,200 firefighters’ unions in both the U.S and Canada, and which controls one of Washington’s 25 largest federal political action warchests.

To be sure, when legislative battles are over, all sides do their best to declare victory. In this case, however, one side is not exaggerating. Armed with the leverage to demand meaningful changes in a law that was about to expire, Governor Cuomo held all the cards here. In the end, the governor folded. The unions won — and New York taxpayers lost.