Saying “the state has run out of money,” Governor David Paterson is withholding scheduled 4 percent raises for 137,500 state employees until the Legislature enacts a state budget that closes a $9 billion budget gap.

Judging from budget developments, state workers may have to wait a long time to see fattened pay checks. In the meantime, Paterson publicly is pressuring public employee unions to make concessions (here).

“I am just shocked and amazed that every time you ask the special interests or the unions for some kind of sacrifice that the answer is either ‘no’ or ‘I’m going to sue you,’ ” Mr. Paterson said Thursday after a private meeting with the Assembly speaker, Sheldon Silver. “The state has run out of money twice, for the first time in its history, in the last four months. We’re doing everything to keep the ship afloat. And some people are just very reticent or unable to recognize the gravity of the crisis.”

Also citing a cash crunch, Paterson has delayed $2.1 billion in payments to school districts as well as money for highway construction projects.

Union leaders lashed out at Paterson’s pay delay, calling it illegal and threatening legal action. They have rejected the governor’s calls for a pay freeze and other givebacks.

For other stories on the pay delay, see hereherehereherehere,and here.

Editorial writers weighed in on Paterson’s action. The New York Post urges him to “Hang tough, governor” (here).

New York were like most places, Gov. Paterson’s plan to delay raises for public employees would be considered prudent–and not some sort of crime against nature.
The state, after all, is broke.

The Journal News, in a more nuanced editorial, raised questions about the legality, but called for sacrifice by state workers (here).

Gov. David Paterson likely lacks the authority to deny state employees the 4 percent pay raises due in their paychecks April 22, at least not forever. The increases were the end result, however foolhardy, ill-considered and misguided, of the collective-bargaining process; for Paterson to withhold the $400 million in payments permanently would make a mockery of approved contracts and diminish faith in the executive branch.

(snip)

In the meantime, state employees would do well to note the sacrifice that many public-sector workers–chiefly in schools and local governments–have made to help New York get beyond the Great Recession. Some have trimmed agreed-upon wage increases and made other concessions, in exchange for job protections and other benefits. Paterson’s unilateral acts likely cannot hold up forever. The same goes for taxpayers’ wallets and patience.

For more about the pay freeze issue, see the Empire Center’s new feature (here) that explains various proposals and quotes editorial support for freezes.

Originally Published: NY Public Payroll Watch

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