STATE OF NEW YORK
May 25, 2010
Introduced by Sen. FLANAGAN — read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions AN ACT to amend the civil service law, in relation to a one year wage freeze; and providing for the repeal of such provisions upon expiration thereof The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Legislative findings. The legislature hereby finds and declares that a fiscal emergency exists in the state of New York. The state’s fiscal condition has been significantly weakened by the impact of the national economic recession and a phase-down of American Recovery and Reinvestment Act funds which will have a negative impact on the state’s funds. These factors have led to a structural imbalance between revenues and expenditures which has contributed to New York becoming one of the highest taxed states in the nation. It is hereby found and declared that the state is in a state of fiscal crisis, and that the welfare of taxpayers in the state is seriously threatened. The state, its school districts and municipalities are experiencing extreme pressures to continue to provide adequate infrastructure and core services to its residents while also ensuring that taxes remain affordable. It is therefore, further found and declared that a combination of enhanced budgetary discipline and short-term budgetary relief is necessary to assist the state, municipalities and school districts as well as taxpayers to facilitate a return to fiscal and economic stability, while ensuring adequate funding for the provision of essential services.
§ 2. The civil service law is amended by adding a new section 137 to read as follows:
§ 137. Wage freeze. 1. Notwithstanding any law, rule or regulation to the contrary all increases in salary or wages of employees of the state, municipalities and school districts which will take effect after the effective date of this section pursuant to collective bargaining agreements, other analogous contracts or interest arbitration awards, now in existence or hereafter entered into, requiring such salary or wage increases as of any date thereafter are suspended for a period of one year. Further all increased payments for holiday and vacation differentials, shift differentials, salary adjustments according to plan and step-ups or increments for employees of the state, municipalities and school districts which will take effect after the date of the order pursuant to collective bargaining agreements, other analogous contracts or interest arbitration awards requiring such increased payments as of any date thereafter are, in the same manner, suspended for a period of one year. For the purposes of computing the pension base of retirement allowances, any suspended salary or wage increases and any other suspended payments shall not be considered as part of compensation or final compensation or of annual salary earned or earnable.
2. Notwithstanding the provision of subdivision one of this section, no retroactive pay adjustments of any kind shall accrue or be deemed to accrue during the period of wage freeze, and no such additional amounts shall be paid at the time a wage freeze is lifted, or at any time thereafter.
§ 3. If any section, part or provision of this act shall be adjudged unconstitutional or invalid or ineffective by any court of this state, any party in interest shall have a direct appeal as of right to the court of appeals of the state of New York, and such appeal shall have preference over all other causes. Service upon the adverse party of a notice of appeal shall stay the effect of the judgment or order appealed from pending the hearing and determination of the appeal.
§ 4. This act shall take effect immediately and shall expire and be deemed repealed one year after such effective date.
NEW YORK STATE SENATE
INTRODUCER’S MEMORANDUM IN SUPPORT
submitted in accordance with Senate Rule VI. Sec 1
BILL NUMBER: S7940
TITLE OF BILL:
An act to amend the civil service law, in relation to a one year wage freeze; and providing for the repeal of such provisions upon expiration thereof
This bill declares that New York State is currently in a state of fiscal emergency. To alleviate this emergency, the following bill would enact a statewide salary freeze for all public-sector employees.
SUMMARY OF PROVISIONS:
Section one declares the legislative findings justifying this bill.
Section two subsection (1)(a) amends the Civil Service Law by adding a new section 137 which would suspend all increases in salary or wages of employees of the state, municipalities, and school districts for a period of one year.
Section two subsection (1)(b) provides that no retroactive pay adjustment of any kind shall accrue or be deemed to accrue during the period of wage freeze and no such accruals shall be paid at the time the wage freeze is terminated.
Section three gives any party in interest a direct appeal to the New York State Court of Appeals and any such case shall be given preference over other causes.
Section four provides that this act shall take effect immediately and shall expire and be deemed repealed one-year after the effective date.
Precedent for this bill occurred in 2003 whereby the Buffalo Fiscal Stability Authority Act (BFSA) was adopted and empowered the City of Buffalo to impose, among other measures, a wage freeze. Prior to that, in 1975, the New York State Financial Emergency Act was enacted and authorized New York City’s wage freeze. Both wage freezes were challenged on constitutional grounds and were upheld by federal and state courts.
The State of New York is undeniably in a state of fiscal emergency. The projected deficit is close to $10 billion. Next year’s deficit is expected to be at least $15 billion with long term deficits nearing $60 billion. Pension costs continue to increase exponentially and the federal stop-gap stimulus funding ceases at the end of this year.
The New York State government must take quick decisive action if there is to be any hope of helping its residents to financially survive and prosper. Enacting a temporary wage freeze on all public employees is a realistic and necessary place to start, and one which will generate significant results.
In fact, school districts would be able to address at least half, if not more, of their budgetary concerns and could alleviate the need to raise property taxes. Freezing salaries in school districts would also result in saving thousands of jobs. For example, a number of school districts in Nassau and Suffolk Counties have already voluntarily agreed to make varying concessions to their contractual salary increases, thus avoiding the need for layoffs.
Enacting a wage freeze at this juncture would realize substantial savings: NYS, $400 million; Suffolk County, $65 million; Nassau County, $30 million; The Metropolitan Transportation Authority, $100 million; New York City $1 billion.
However, this action alone will not completely resolve New York’s fiscal problems, and other important steps will be needed to eliminate the current deficit and get our state back on the road to recovery. Admittedly, a long term solution to our fiscal predicament will necessitate implementing measures that demonstrate real fiscal discipline, including enacting a state spending cap, reforming the state’s regulatory framework, ending unfunded mandates on schools and local governments, and providing significant tax incentives to small businesses that will generate job growth and stimulate the economy.
The continued proliferation of the State’s fiscal difficulties threatens the economic vitality of the entire State. While more drastic alternatives such as elimination of municipal jobs, school closures, and elimination of essential services are available, it is in the best interest of all taxpayers that the State impose a temporary public employee wage freeze instead. This is a reasonable and necessary first step towards ameliorating the current fiscal crisis and a key element in promoting the overall economic and fiscal stability of the State.
Substantial savings to state and local governments of approximately two billion dollars.
This bill takes effect immediately and shall expire and be deemed repealed one year after the effective date.