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Editorial: Arbitration cap would help struggling municipalities

If arbitrators won't seriously consider a municipality's ability

If arbitrators won't seriously consider a municipality's ability to pay when awarding new contracts to law enforcement personnel and firefighters, something has to change. Credit: iStock

If arbitrators won't seriously consider a municipality's ability to pay when awarding new contracts to law enforcement personnel and firefighters, something has to change. Now is the time for that change, because the law that allows them mandatory arbitration expires in June.

Gov. Andrew M. Cuomo has proposed a new law that would cap pay raises in arbitration awards to such bargaining units at 2 percent a year when the municipality paying them qualifies as "distressed." To qualify, the municipality would need to have property tax rates in the top 25 percent for the state, or possess reserve funds of less than 5 percent of its annual budget over a five-year period.

Such restrictions would be a huge improvement.

Consider, for instance, last month's arbitration award of 40 percent raises to Nassau County district attorney's investigators, retroactive for several years, that will cost the county millions. Nassau's finances are deeply distressed. The county is in a control period, overseen by the Nassau Interim Finance Authority, which allows the county to freeze pay even in violation of labor agreements. But these investigators, most of whom have waivers that allow them to earn high salaries while receiving pension payments from previous public jobs, will get the back pay and increases they won in arbitration, regardless of the freeze.

Nassau is more than $3 billion in debt, and it's likely to rack up another $500 million to $1 billion over the next few years. It clearly can't afford to pay the raises to these DA's investigators, but according to arbitrators, it can always put its hand in the taxpayers' pockets. That was true of any municipality until the cap on property tax increases was imposed last year, and still is if there is a 60 percent vote by governing boards to pierce that cap.

The key factor in the DA investigators' case was that comparable investigators in Suffolk County and police detectives in Nassau made far more than these investigators did. That's how salaries and benefits for police in both counties leapfrog upward in a seemingly endless cycle.

The counties, cities and towns of Long Island that are in financial distress can't afford to give big raises to uniformed employees, but because elected officials fear the power of unions, they duck negotiations and go to arbitration. And to be fair, when officials do try to play negotiating hardball, the unions can simply refuse to deal, knowing they'll often do better in binding arbitration than the deal they're being offered.

The system has to change. Right now, it provides an out for politicians dependent on union support. They can be rough and tough in negotiations because they know the unions don't have to take the deals, so there's no need for hard feelings. And they can always blame the arbitrator.

Cuomo's proposal also would put increases in health care costs in the cap. That would get these employees closer to living the way most taxpayers do.

The best effect of the new law, if it passes through the serious opposition it will provoke, will be an end to arbitration and a return to negotiated contracts. If officials give away the store, they can be held accountable on Election Day. Under the current system, the politicians let unelected arbitrators give away the store for them, avoid taking the blame from the public and still manage to satisfy their union friends.