Governor Paterson would need the support of the Legislature to freeze wages of state workers. The next governor could partially freeze salaries by letting union contracts expire next year.

One would-be governor, Attorney General Andrew Cuomo, has proposed freezing wages in 2011 “while the State takes other measures to get spending in line and recover from the current financial emergency” (here). Cuomo’s “The New NY Agenda: A Plan for Action,” a 224-page campaign platform, offers scant details of a proposed wage freeze.

If the next governor were to run the clock by letting existing contracts expire beginning March 31, 2011, state workers would continue to receive “step” or longevity raises as well as existing health insurance benefits under the Triborough Amendment to the Taylor Law (here).

The Empire Center has proposed a three-year wage freeze (including step raises) for public employees statewide beginning this year (here).

In his campaign agenda, Cuomo says Tier 5, the new pension plan for public employees hired after January 1, 2010, “did not go far enough.”

We must re-evaluate what benefits the State provides and to whom, including increasing employee contributions.Moreover, we still have dramatic abuses being uncovered, and in many areas it is routine for employees near retirement to dramatically increase retirement benefits by manipulating overtime schedules. A new Tier VI would control “spiking,” “padding,” and overtime issues that drive up pension costs.

Of course, New York need not wait for a new governor to freeze public employee wages and create a Tier 6 pension plan. With a $9.2 billion budget gap, Governor Paterson and the Legislature has good reason to act in 2010, rather than wait until 2011.

Originally Published: NY Public Payroll Watch, May 24, 2010

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

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