A PAY FREEZE TO SAVE TAXPAYERS
Text of a letter sent
to Governor George E. Pataki from Daniel B. Walsh dated April
28, 2003. (Similar letters sent to Senator Bruno and Speaker
Silver.)
DANIEL
B. WALSH
President/CEO
April 28,
2003
Dear Governor
Pataki:
RE: A pay
freeze to save taxpayers
Unions representing
taxpayer-funded employees are creating enormous pressure on the Legislature
to raise taxes on New York's workers and businesses. As you have said
time and again, new taxes will drive private-sector jobs away – and
thus reduce our ability to pay for vital public services – just as
we saw in the early 1990s.
Fortunately,
there are ways to cut the cost of government, and thus maintain services,
while avoiding new taxes. One answer: Freezing the pay of public employees.
We estimate
that a one-year freeze on state and local government wages could save
the state, school districts and municipalities some $2 billion to $3 billion.
(The figure is based on estimated cost-of-living and seniority increases
to a current base of some $57 billion in annual state and local payrolls.)
Governors
and legislators in other states are increasingly turning to employee pay
freezes to save taxpayer dollars while maintaining services. In Indiana,
Governor O'Bannon has implemented a freeze on state-worker pay administratively.
Georgia, Maine, Minnesota, Oregon, Wisconsin and Washington are among
those actively considering a freeze on both state and local government
payrolls. In Oregon, teachers are working two weeks without pay; in Maine,
public employees have been subject to involuntary furloughs.
Given the
extensive authority New York's Constitution gives the Governor and the
Legislature, state legislation could freeze salaries and wages for employees
of the state, municipalities and school districts. Such a broad approach
would be the most fair and reasonable way to ease budget problems facing
the state as well as schools and local governments. At the local level,
in particular, it could represent the equivalent of $1.5 billion to $2.3
billion in new state aid.
No doubt
the public-sector unions that want you to raise taxes will oppose a freeze
on salaries. Any such move by Albany would represent improper involvement
in school districts' and municipalities' collective bargaining, their
lobbyists will argue. These, of course, are the same groups that constantly
pressure the Legislature to impose new pension, wage and other benefits,
thereby stripping mayors and school boards of negotiating authority.
A pay freeze
is unfair to workers, the unions will claim. But the truth is that a temporary
interruption in salary increases could save jobs – potentially thousands
of them across the state. 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.
There is
a phrase heard frequently around Albany these days – "share
the pain." It comes from the unions whose membership grows as taxes
go up. They want to impose more pain on taxpayers so that state spending
can continue to grow, even in the face of a huge budget gap.
But the public-sector
unions offer no sacrifice of their own. (They are willing to accept early
retirements, of course. To private-sector workers and taxpayers, retiring
at 55 doesn't seem like much of a sacrifice.)
Eliminating
salary increases for a year is particularly reasonable given that New
York is extraordinarily generous in the pay and benefits it provides public
employees. Census Bureau data show, for instance, that state and local
government workers in the Empire State are paid an average $46,687, more
than 21 percent above the national average for state and local workers.
We recognize
that your 2003-04 Executive Budget includes no funding for state-employee
pay increases. Enacting a statutory pay freeze would go further by eliminating
"step" increases and could simplify this year's complex negotiations
with state-worker unions.
Your goal
of avoiding state-employee layoffs is compassionate and understandable.
Private business owners, too, prefer retirement incentives and other voluntary
steps to reduce payroll when such is required. But 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. 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. 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.
We urge you to enact this sensible proposal into law.
Sincerely,
(Signed)
Daniel B. Walsh
