What's New

Zack Hutchins
Director of Communications

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:

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 cost—for 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.