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Jun 25

Written by: Todd Tranum
6/25/2010 3:22 PM  RssIcon

Written by Todd J. Tranum President/CEO Chautauqua County Chamber of Commerce
and Executive Director of the Manufacturers Association of the Southern Tier

     This past week the New York State Senate and Legislature approved the Governors proposal for a one day per week furlough of public employees. It is certainly not a pleasant situation that the State faces and it is having an economic impact on working people within government. Yet without a sound budget in place and as Comptroller Thomas DiNapoli warns that the state could run out of cash in June, these difficult measures have to be taken. Several states have resorted to furloughs to close budget gaps. In the face of the most challenging economy since the great depression, private businesses of all sizes have reduced their workforce or enacted layoffs and furloughs. There will be a lot of push back from public employees including legal challenges to the decision to implement the furloughs. What needs to be understood is that public sector employees are not insulated from these fiscal challenges as the recession went deep this time, affecting those in all walks of life. Public sector employees are not immune to the challenges of this economy. A better approach on the part of the Unions would be wage and benefit concessions to help keep the state afloat and maintain full-time employment.
     On the heels of the furlough challenge a legal opinion released this month by the Empire Center for New York State Policy addresses the legislature’s ability to freeze public employee pay. In a release issued by the Empire Center ‘the state Legislature has the power to impose a temporary freeze on the collectively bargained wages and “step” increments of public employees in New York to help deal with a severe fiscal crisis.’ “Temporary wage freezes are lawful under New York and Federal law provided they are supported with appropriate legislative findings and tailored in a reasonable manner to protect the public,” concludes the opinion written by Terry O’Neill and Howard Miller, partners at the law firm of Bond, Schoeneck & King, PLLC. In the report O’Neil and Miller cite federal and state court decisions upholding wage freezes in New York City, Yonkers and Buffalo, all imposed with legislative authorizations by state- created financial control boards. In another case, a federal court upheld a furlough in Baltimore, Maryland.
     According to the Empire Center’s recent report, Blueprint for a Better budget a freeze on all public-sector wages at the state, local and school district level would save at least $1.6 billion in 2010-11 fiscal years, growing to over $2 billion by 2013.  According to E.J. McMahon, director of the Empire Center a wage freeze would more than offset the property tax increases that most school districts have proposed for 2010-11.
     It would be a bold step by the Assembly and Senate to move forward with a wage freeze proposal. Given the economic reality a wage freeze would be entirely appropriate. In addition, it would help taxpayers at the local level who are being faced with school property tax increases.  The State needs to close a $9.2 billion budget gap and consider that the following year’s budget will pose challenges as well. Difficult decisions made today will help create brighter days in the future.
     Furloughs and pay freezes are measures that will help slow down the bleeding. To stop the bleeding and begin the healing there has to be sweeping reform from the local to state levels and some help from the economy.