First state layoffs, then state outsourcing

State workers are about to get a taste of downsizing, corporate style.

For years, corporate America has cut jobs and then outsourced some of the work to contractors. Companies often save thousands of dollars on fringe benefits like health insurance or pensions and even lower salaries.

Now, that approach appears to be coming to work that would normally fall to state government employees.

The change is occurring as Gov. Andrew M. Cuomo's administration announced last week that 3,496 members of the Public Employees Federation are receiving layoff notices after shooting down a five-year labor contract offer.

There's been no formal announcement of an outsourcing plan.

But one of the state's major agencies, the Office for People with Developmental Disabilities, is laying off 386 people, including scores of Medicaid service coordinators. The service coordinators, who fall into several civil service job categories, act as social workers for their disabled clients -- setting up doctor appointments, making sure they get to day centers where they spend their time and generally looking out for their medical welfare.

As the state jobs are being cut, New York's vast network of "voluntary" or private, nonprofit centers for the disabled have been asked by OPWDD to begin providing the coordinating services.

"They are calling the voluntary providers in these communities and saying, 'Can you take some of these folks?' " said Jeff Wise, chief executive of the state Rehabilitation Association, which represents nonprofit organizations.

Wise said his members are ready to take over the duties. And they may be looking to hire some laid-off PEF members who performed the same tasks for the state.

"The voluntary system that I represent is more than happy to step up to the plate here and pick this up," he said.

The service coordinators will likely earn lower salaries and receive fewer benefits such as subsidized health care coverage and pensions, than they would from the state.

OPWDD saw layoffs coming and it began calling local providers last week, Wise said.