Syracuse Mayor Stephanie Miner has drawn attention for New York Times op-ed criticizing Governor Cuomo’s failure to deliver meaningful mandate relief to troubled localities. The mayor, who is also co-chair of the state Democratic Committee, challenged Cuomo to “use his substantial, hard-earned political capital to convene the Legislature, the state comptroller, and union and business leaders for an honest conversation about the multiple fiscal pressures confronting our cities.”

Miner’s lead point: “our labor costs are too high — less because of salaries, more because of the rising costs of pensions and health care.”  Meanwhile, revenues have plunged and the cities are losing middle-class residents to suburbs.  Etc.

Howard Glaser, Cuomo’s director of state operations, had this reaction to Miner in a Talk 1300 radio interview (as quoted in the Albany Times Union blog):

“What I believe she [Miner] said was, look, Syracuse has been plagued by financial mismanagement for a long time: labor costs that are out of control, pension costs that are out of control. And my city has been unable to manage that fiscal problem — which, by he way, is not unique to state government or other city government. Her answer, as far as I can see in the piece as well as from other discussions, is the state should give me money to solve a financial problem that we created in Syracuse because we didn’t exert fiscal discipline. No specific proposals other than that.”

Fair enough. Miner’s op-ed lacked specific proposals. While the mayor’s public criticism of the governor’s pension smoothing plan has been refreshingly straightforward — in the Times article, as in her earlier state budget testimony, she correctly compared it to borrowing — she hasn’t made a point of identifying alternative state policies that would help localities save money.

But her real agenda is hardly a secret; indeed, it was laid out in this December 2010 report by a Conference of Mayors (NYCOM) task force, of which Miner was a member. What mayors across the state have called for, among other things, is repeal of the Triborough Amendment and reform of the Taylor Law provision allowing police and firefighters to demand binding arbitration of contract impasses.  County executives want the same thing. School districts, in particular, need relief from Triborough and its requirement for automatic “step” pay increases even after contracts expire.

Cuomo refuses to go near Triborough. His latest budget bills offer, at best, a quarter loaf of arbitration reform, proposing to cap arbitration awards at 2 percent for “distressed” counties and municipalities only. But the problem arbitration poses to Miner and other mayors (such as Mike Spano of Yonkers) is not just the size of arbitrated pay hikes — it’s the way the arbitration process prevents substantial restructuring of contracts, including work rules as well as benefit co-pays. And that won’t change under Cuomo’s proposal.

A huge additional needed reform, also unmentioned by Miner and ignored by Cuomo, would be enactment of a law setting a floor under all local public employee health insurance premium contributions, as recommended in 2008 by the Lundine Commission.  That could save New York taxpayers $1 billion a year, ultimately rising to $1.7 billion, according to this 2010 Rockefeller Institute report.

Miner certainly could more effectively put Cuomo on the spot by reiterating the specific recommendations in that NYCOM report.  Meanwhile, contrary to Glaser’s implication, she’s not merely seeking a bailout (not publicly, at least). It’s hard to find evidence of a public “give me money” request from any New York mayor, in fact. After all, it’s no secret the state is short of cash. Indeed, in another part of her op-ed, Miner criticized the Legislature’s past proclivity for offering bailouts in the form of “fiscal gimmicks like borrowing money or using one-time revenue to pay for operating expenses.”

Glaser’s implication that local officials should simply do as Cuomo did, extracting important concessions from state unions, is disingenuous. Cuomo, like any governor, has considerably more leverage over state unions than county, municipal or school officials have over local unions. The state budget process gives the governor considerably more leeway to impose tough terms on recalcitrant unions — by, for example, repealing Triborough in appropriations bill language. State unions also know a governor is more likely to follow up on big layoff threats, if only because most state workers do not provide direct public services and thus are less likely to be missed than, say, local cops or teachers. Cuomo deserves credit for his own contract deals, but he had a much stronger hand to play than a typical county executive, mayor or school board.

Defending Cuomo’s pension proposal against Miner’s criticism, Glaser compared it to converting an adjustable-rate mortgage (ARM) to a fixed rate mortgage.  The comparison is inaccurate.

Unlike the money borrowed to buy a house, a pension contribution reflects an employer’s continuing obligation to fund public retirement systems, which in turn must finance constitutionally guaranteed retired benefits whose discounted net present value is variable. Under Cuomo’s proposal, if pension funds fail to hit their investment return targets, the “fixed” term of the “smoothed” employer pension contribution rate could stretch beyond the advertised 25 years, and the rate itself could rise by a full one-third. This is not the equivalent of  exchanging an ARM for a fixed-rate mortgage; it’s more like exchanging one ARM for another ARM.

It appears we’ll have to keep waiting for that “honest conversation.”

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

Counties’ Medicaid role dwindles

New enrollment numbers from the state-run health insurance exchange confirm a trend relevant to budget talks in Albany: The role of local governments in signing people up for Medicaid is smaller than ever. Read More

A lesson on apprenticeships

The raw politics behind giveaways to building trade unions were on display last week in Troy, a city outside Albany. Read More

Cuomo extends costly arbitration law

Three years ago, Governor Andrew Cuomo blew a rare opportunity to fundamentally reform one of the most costly provisions of the New York State law regulating public-sector collective bargaining. Now he's about to blow it again. Read More

Local govs score with better websites

In 2014, the Empire Center created guidelines for what information local governments and school districts should make available on their websites—and found that most of the state's 500 largest municipalities and districts were not meeting that standard. Read More

“Warning”: taxes might not rise

Don't look now, but given current inflation trends, next year's school property tax cap may be ... zero! That's the message of a statement released last week by the Educational Conference Board (ECB), a coalition of groups representing public school administrators, school boards and—last but hardly least—the New York State United Teachers (NYSUT) labor union. The ECB's "warning" was meant as an inside-the-Albany-bubble scare tactic, but for most New Yorkers, it's good news: further confirmation that the tax cap is working exactly as intended. Read More

Local websites improve bit by byte

Good news to cap off Sunshine Week: at least some local government and school officials are working to make their websites more useful and informative. Read More

Local tax cap may dip in ’15

The property tax cap for New York counties, towns and villages with fiscal years starting January 1, 2015 will start at 1.56 percent, slightly lower than last year's starting rate of 1.66 percent. The cap in each locality will vary based on the amount of applicable allowable exclusions for growth in local property values. Localities also will be able to exclude the amount by which the change in pension contributions exceeds two percentage points Read More

Bill repeals local control of cop discipline

A bill rushed to passage by both houses of the Legislature last week would gut local control of police discipline by deeming it a subject of collective bargaining throughout the state. The bill can be seen as a fresh test of Gov. Andrew Cuomo's commitment to "transform" a state dominated by public employee unions. Read More