November 22, 2002
Report: To meet fiscal challenge, New York must restrain government employment
If New York had only as many state and local government workers per capita as the national average and paid them only 3 percent above the national average, the state's taxpayers would save almost $14 billion a year, according to the latest state budget analysis by The Public Policy Institute of New York State.
That's why New York's lawmakers should rein in the growth of the public sector to close a budget gap of $5 billion or more, the new report said.
"New York's taxpayers have long supported one of the nation's largest and costliest public payrolls," The Institute said today in a report entitled "To Meet its Fiscal Challenge, New York Must Restrain Government Employment." The report is the latest in The Institute's Budget Watch '03 series. The new report is posted at http://www.ppinys.org/budget/budget_watch_03_issue5_payroll.pdf.
The report noted that:
York ranked eighth in the number of state and local government
jobs per capita, 14 percent above the national average,
the report said, citing Census Bureau Data.
York's state government workers are the third highest paid
in the nation, with an average salary more than 18 percent
above the national average. Median family income in New
York, by contrast, is only 3 percent above the national
the last five years, New York has added about 10,100 state
government jobs, according to state Labor Department data.
the five-year period ending in September, the state payroll
increased by about $3 billion, to $11.4 billion a year,
according to the state Comptroller's office.
234,923 full-time state-government employees, New York has
more state-government employees than every state except
California and Texas.
the state was losing 43,700 private-sector jobs in the year
after the Sept. 11 atrocities, state government had risen
by 2,900 jobs, according to the state Labor Department.
Moreover, state mandates on local governments and school districts also inflate local government employment, the report noted.
"Localities must recognize and bargain with unions under the terms of the state's Taylor Law. State civil service rules also apply. State law gives unions many tools with which to resist any effort by localities to contain costfor example, through privatizing, consolidating, or outsourcing services," the report said.
As a result, only California (with nearly twice the population) had a larger full-time local-government payroll. And in Texas, with 10 percent more people, spending on local-government payroll was 43 percent lower in March 2001, the report said.
"Albany could save local taxpayers an estimated $5 billion a year by reforming its mandates on local governments and school districts," the report concluded.
The Institute, the research affiliate of The Business Council, launched Budget Watch '03 earlier this month to focus attention on spending issues that are at the root of the state's looming fiscal challenge. If the state had held overall state-funds spending to the rate of inflation over the last five years, the state could have saved $7.9 billion.
Reports in the series will be issued once or twice a week as the state budget debate unfolds. They can all be accessed from www.ppinys.org/bwatch03.htm.