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May 31, 2006

Council opposes bill that would expand state workforce by 52,000

The Business Council is urging Governor Pataki to veto a bill that would add an estimated 52,000 workers to the state payroll and could threaten some $300 million in federal aid.

The bill, S.6758, passed the Senate unanimously in March and was approved by the Assembly in late April after a lobbying campaign led by the United Federation of Teachers. It now awaits Governor Pataki's signature or veto.

The bill declares that home day-care providers who earn at least some of their income from public subsidies will become state employees, subject to the state's Taylor Law. Unions are promising the bill will raise day-care workers' salaries and benefits--increases that could easily cost taxpayers $75 million or more a year.

"It is our understanding that, if Governor Pataki approves this legislation, it would be the first-ever statutory application of the Taylor Law to individuals who are not employees of a government agency," Business Council President Daniel B. Walsh wrote. "Such a precedent would ill serve the interests of the taxpayers of New York State.

"New York already has significantly more public employees, in relation to population, than most other states," Walsh said. "That’s one reason our political culture often serves the interests of those who get paid to provide public services, more than it does the people who are the ostensible beneficiaries of such services."

If the bill becomes law, Walsh said, further expansions of the Taylor Law "will be virtually certain."

"Why wouldn’t the unions seek similar favors from the Legislature with respect to workers who provide transportation services for Medicaid patients?" he asked. "What about home health workers, who are also employed by private agencies but funded by tax dollars? The list could go on and on."

The bill has numerous substantive and technical flaws, Walsh said. For example, it fails to identify a specific employer with whom a union would negotiate terms and conditions of employment.

"Our extraordinarily large public sector is a key reason taxes in New York are already the highest in the nation, even after Governor Pataki’s efforts to reduce taxes," Walsh said. "Our Public Policy Institute has estimated that, across Upstate New York, high numbers of public-sector jobs and above-average compensation for those jobs cost taxpayers an extra $4 billion each year, compared to the cost in a normal state. As Governor Pataki has warned repeatedly, high taxes make it harder for us to keep and attract the good jobs New Yorkers need."

The bill is also opposed by organizations such as the New York Public Welfare Association and the New York State Association of Counties. The Public Welfare Association warned that the bill could jeopardize more than $300 million in federal child-care funding. Federal rules require such provider rates to reflect the marketplace, rather than union contracts, to maximize the number of families who can be served.

The full text of Walsh's letter is available here.