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Editorial: Help local gov'ts by fixing labor arbitration system

New York Gov. Andrew Cuomo talks to reporters

New York Gov. Andrew Cuomo talks to reporters in Albany, N.Y. (May 8, 2013) Photo Credit: AP

Gov. Andrew M. Cuomo likes to talk about seizing opportunities and never letting a good crisis go to waste. With the terrible trajectory of so many of New York's cities and counties and the state's 39-year-old binding arbitration law expiring June 30, the governor has both. Cuomo mustn't let either go to waste.

With the end of Albany's legislative session days away, lawmakers are just now considering Cuomo's plan to help distressed municipalities. From the few details that are emerging from the behind-the-scenes negotiations, these provisions don't go far enough to fix problems. Only cities characterized as "distressed" -- meaning those that have the dangerous combination of high taxes and low reserves -- would be helped. But why do problems have to become extreme before some sense and balance can be brought to the state's flawed arbitration process?

The governor initially proposed creating a financial restructuring group to assist distressed governments willing to accept help. The panel would find ways to correct the financial course of troubled localities, including sharing services, eliminating duplicative functions or consolidating with neighboring communities.

Included in his proposal, too, would be an alternative to the costly arbitration process that often seems rigged in favor of the public labor unions. His plan would consider a municipality's ability to pay and cap awards, including raises and certain benefits, at 2 percent. But it would only help those facing serious financial problems.

What's unclear is how, or even if, Cuomo will deal with the broader binding arbitration system that is a driver of the incredibly high salaries -- often in six figures -- for police and firefighters, particularly on suburban Long Island and in the Hudson Valley.

With the June 30 expiration looming, a wholesale reform of the system is needed, but it can't be done effectively without addressing the state's Taylor Law, which governs collective bargaining and locks in benefits even after a contract expires. For sure, it's complicated, but seizing this opportunity would be a meaningful way to help some municipalities while preventing others from one day falling into the distressed category.

Temporary extensions and tweaks aren't enough.

As part of the reform, Cuomo and lawmakers should push for caps on automatic step increases, longevity pay, health care and lesser-known perks, including uniform allowances and check-in pay, since those hidden costs add up as well.

Arbitration resulted in police in Rockville Centre earlier this year winning a wage war in which they received a 6.6 percent raise over two years and 3.25 percent retroactive raises for two years. When clothing and equipment allowances and longevity pay were added, it meant thousands more for officers. It's no wonder the average salary for members of that village force was around $142,000 in 2012.

In Yonkers, where the starting salary for a firefighter is $70,996 and the pay quickly accelerates into six figures, the city's mayor and fire union haven't been able to reach a deal since 2009. The sides are headed to arbitration over differences in pay, minimum manning requirements, sick time and overtime. Controlling such costs has been a challenge for a city facing a budget deficit that is expected to balloon to $500 million by 2016.

It hard to ignore binding arbitration's effect on taxpayers. It was created as a temporary measure in 1974. Now, the experiment has lived on for nearly four decades and is one of the reasons so many governments are finding their balance sheets out of whack.

With changes to the expiring arbitration law, the governor can help all localities, not just those that are distressed. Barring meaningful reforms, Cuomo ought to let arbitration expire altogether. He has that leverage and he should use it.


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