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NYT Notices State Workers ‘Fiscal Crisis’

From the seemingly bi-polar editorial writers at the New York Times:

State Workers and N.Y.’s Fiscal Crisis

March 5, 2011

At a time when public school students are being forced into ever more crowded classrooms, and poor families will lose state medical benefits, New York State is paying 10 times more for state employees’ pensions than it did just a decade ago.

Who woke up the ‘gray lady’? By the way, that is quite a staggering statistic, if true. You would think the New York Times might have done a news article about it.

That huge increase is largely because of Albany’s outsized generosity to the state’s powerful employees’ unions in the early years of the last decade, made worse when the recession pushed down pension fund earnings, forcing the state to make up the difference.

Although taxpayers are on the hook for the recession’s costs, most state employees pay only 3 percent of their salaries to their pensions, half the level of most state employees elsewhere. Their health insurance payments are about half those in the private sector.

Gee, New York’s situation sounds remarkably like Wisconsin’s. So what is the problem with what Mr. Walker is trying to do again?

In all, the salaries and benefits of state employees add up to $18.5 billion, or a fifth of New York’s operating budget. Unless those costs are reined in, New York will find itself unable to provide even essential services.

Huh? Why just a three days earlier these self-same Solons at the New York Times were parroting their hero Michael Moore and editorializing that we (the states and the federal government) have plenty of money to pay for these union salaries, benefits and pensions.

Indeed, they said that all we need to do is raise taxes. Did the laws of economics change between Wednesday to Saturday?

To point out these alarming facts is not to be anti- union, or anti-worker. In recent weeks, Republican politicians in the Midwest have distorted what should be a serious discussion about state employees’ benefits, cynically using it as a pretext to crush unions.

Imagine the lunatic propagandists on the editorial board of the New York Times having the chutzpah to chide anyone for distortion and cynicism.

New York does not need that sort of destructive game playing. What it needs is a sober examination of the high costs of wages and benefits, and some serious proposals to rein them in while remaining fair to hard-working government employees.

And to accomplish this all we will have to do is ask nicely — and the unions will quickly accede to our wishes for the rest of time.

Gov. Andrew Cuomo has pursued a reasonable course, making it clear that he expects public unions to make sacrifices, starting with a salary freeze. He wants to require greater employee contributions to pensions and health benefits, with a goal of saving $450 million.

What a laugh riot. Mr. Cuomo is asking for even more than what Gov. Walker is asking for. (Walker is not demanding a pay freeze.)

The main difference, however, is that Mr. Cuomo will never get such concessions – at least not for long – without some limits on the unions’ powers to ‘collectively bargain’ for them later.

Negotiations begin this month, but so far union leaders have publicly resisted Mr. Cuomo’s proposals. If they don’t budge, Mr. Cuomo says he will have to lay off up to 9,800 workers. That would damage the state’s struggling economy.

How absolutely beautiful. And, just like in Wisconsin, it’s clear that the union leadership values its power more than its members.

Some compromise must be found. Here are the three most expensive areas of spending that need to be addressed:

WAGES Last April, in the midst of one of the worst financial crises that New York and the nation have ever faced, the state’s unionized workers got a 4 percent pay raise that cost $400 million. It came on top of 3 percent raises in each of the previous three years. These raises were negotiated long before the recession began, by a Legislature that routinely gave in to unions that remain among the biggest political contributors in Albany.

And yet The Times like to pretend that there is no problem with public sector unions?

During the same period, many private-sector workers had their pay or hours cut. Private-sector wages in New York dropped nearly 9 percent in 2008

The average salary for New York’s full-time state employees in 2009 (even before the last round of raises) was $63,382, well above the state’s average personal income that year of $46,957

Note that New York State (236,000) doesn’t even have as many state employees as Wisconsin has (300,000). Meanwhile, New York State has more than three times Wisconsin’s population — 19.3 million versus 5.6 million.

PENSIONS In 2000, employee pensions cost New York State taxpayers $100 million. They now cost $1.5 billion, and will be more than $2 billion in 2014The Legislature, ever eager to curry favor with powerful unions, added sweeteners to pensions and allowed employees to stop making contributions after 10 years

Under the state Constitution, a worker’s pension benefits cannot be cut back once granted

An investigation by The Times last year found that 3,700 retired public workers were getting six-figure pensions, largely because of overtime abuse, and that number is expected to grow. The system even allows workers on full pensions to double-dip and return to state employment, a practice the Legislature should end. Recently, Gannett Newspapers found more than 2,000 people collecting both state salaries and pensions

HEALTH INSURANCE As national health care costs have soared, the state’s payments for employees’ and retirees’ care has more than doubled in the last decade. This fiscal year, the state will pay $3 billion; that is projected to keep growing by $300 million to $400 million a year.

Health care contributions by state retirees are considerably lower than for workers in the private sector or the federal government

Unlike Gov. Scott Walker of Wisconsin, Governor Cuomo is not trying to break the unions. He is pressing them to accept a salary freeze and a reduction in benefits for new workers. The unions need to negotiate seriously.

We are also urging the governor to rethink his pledge to cap property taxes and allow a tax surcharge on high incomes to expire at the end of this year. That would bring the state an additional $2 billion this fiscal year, and $4 billion the following year — not enough to solve the fiscal crisis, but a serious down payment.

The state’s middle-class workers will have to make real sacrifices. New York’s many wealthy residents, all of whom are benefiting substantially from a new federal tax break, should have to pay their fair share as well.

Naturally, at the end the New York Times sees raising taxes as a big part of the solution. But even liberal Democrat Gov. Andrew Cuomo knows better than that.

And, once again, it is pure fantasy for the editors of the New York Times to imagine that the unions will just give up any of these ‘(state) constitutionally protected’ benefits without a life and death struggle. Or that the unions will not insist on getting them all back and more in their next round of ‘collective bargaining.’

As is so often the case, The Times simply wants just to treat the symptom and ignore the actual causes. Which guarantees that this problem will never be fixed.

This article was posted by Steve on Sunday, March 6th, 2011. Comments are currently closed.

3 Responses to “NYT Notices State Workers ‘Fiscal Crisis’”

  1. Helena says:

    “Under the state Constitution, a worker’s pension benefits cannot be cut back once granted…”

    That way, everyone who ought to be fixing the budget can say “But it’s not my fault, it’s in the constitution!”

  2. BannedbytheTaliban says:

    “PENSIONS In 2000, employee pensions cost New York State taxpayers $100 million. They now cost $1.5 billion.”

    From $100 million to $1.5 billion is 15 times greater, not 10. Maybe the NY Times should invest in some writers who weren’t educated in the government school.

  3. BannedbytheTaliban says:

    “The unions need to negotiate seriously.”

    Why, there is nothing for them to lose. They will just spend their union dues on candidates who will raise taxes to continue to support the exponentially increasing cost of government. That is one hockey-stick graph we should be worried about.

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