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Zack Hutchins
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For Release — Tuesday, April 29, 2003

PAY FREEZE FOR PUBLIC EMPLOYEES COULD SAVE TAXPAYERS
$2 BILLION OR MORE, BUSINESS COUNCIL TELLS STATE LEADERS

ALBANY— New York State could solve much of its own budget problem, and those of localities and school districts, by enacting a temporary freeze on public-employee wages, The Business Council of New York State has told Governor Pataki and legislative leaders.

Freezing the salaries of the more than 1.2 million individuals who work for the state, municipalities and school districts could save $2 billion to $3 billion in the coming year, Business Council President Daniel B. Walsh wrote in a letter delivered to state leaders Monday. That figure would include savings of $1.5 billion to $2.3 billion for New York City, other localities, and school districts.

"In the last two years, as the national recession has hit home and we continue to feel the impact of September 11, more than 300,000 taxpaying New Yorkers have lost their jobs," Walsh wrote. "Big job losses in the part of the economy that pays the taxes should, in fairness, lead to cost reductions in the sector that spends taxes.

"All New Yorkers appreciate the vital services performed by public employees," Walsh said. "Workers in the private sector, too, do essential work. When times are hard, it's only fair that neither sector bear all the cost. A temporary freeze on public-employee pay will save jobs, save taxpayers, and preserve services."

Walsh predicted that public-employee unions would oppose a pay freeze, even though it could save thousands of jobs for employees of the state, localities and school districts.

"If scheduled pay increases go forward, school districts and other public employers will have no choice but to cut costs by laying workers off. In many cases, important services could suffer as a result," he said.

Census Bureau data show that state and local government workers in New York are paid an average $46,687, more than 21 percent above the national average for state and local workers. Under New York's Constitution and statutes such as the Taylor Law, the Governor and Legislature have extensive power over employee relations in local government as well as at the state level.

Leaders in states such as Minnesota, Oregon, Washington, Indiana, Wisconsin and Maine are already implementing or considering wage freezes to save taxpayer dollars while maintaining services. Teachers in Oregon are working two weeks without pay, while public employees in Maine have been subject to involuntary furloughs.

Public-sector unions in New York are spending millions of dollars on ad campaigns urging Governor Pataki and the Legislature to raise taxes, even though New Yorkers already bear the heaviest tax burden in the country.

Walsh said that approach would "drive private-sector jobs away—and thus reduce our ability to pay for vital public services—just as we saw in the early 1990s."

The text of Mr. Walsh's letter to Governor Pataki (similar letters were sent to Senate Majority Leader Joseph L. Bruno and Assembly Speaker Sheldon Silver) is available at www.bcnys.org/whatsnew/2003/dbwtaxfreeze.htm.

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