On Aug. 7, Mayor Michael Bloomberg, cautioned his would-be successors, not to capitulate when negotiating pension and health care benefits for city workers. He warned that if city leaders fail to control “unsustainable employee compensation costs, it could find itself trapped in the same ‘downward cycle’ as bankrupt Detroit” where pension payments to the Police and Fire Retirement System alone have grown to approximately 114 percent of payroll.
Bloomberg also mentioned that existing state law “has forced the city to continue giving pay increases to employees whose most recent contracts expired three or four years ago, something union leaders invariably gloss over when they demand retroactive pay hikes the city can’t afford.”
Case in point, as reported in the Rockville Centre Herald last March, an “arbitration panel awarded our police officers two retroactive salary increases of 3.25 percent for 2010 and 2011, among other increases.” In the judgment of Village Administrator Keith Spadaro, the arbitrator’s decision did not “address our requests for relief from the ever-rising cost of salaries, health care and pension contributions.” To expect otherwise would have been foolish. Why?
E. J. McMahon, a senior fellow at the Manhattan Institute’s Center for State and Local Leadership, addresses this question specifically in a column published back in May. The “compulsory binding arbitration process unduly favors unions and puts to sleep bargaining restraints that logically should apply with absolutely no redress possible.”
On June 18, 2013, Governor Cuomo announced changes in the binding arbitration process that gives far greater weight to a municipality’s ability to pay and constraints imposed by the property-tax cap limitations. That should be good news, but it’s not. Why? The following week, two dozen unsettled union contracts, including one submitted by the Rockville Centre PBA, were allowed “carve-out” i.e. revert to a more favorable bargaining platform.
Should we be concerned? You bet! According to the state Public Employment Relations Board, the settlement fostered on the village resulted in unaffordable salary increases while perpetuating costly work rules and benefits. In particular, their report noted the panels 2-1 rejection of the village’s proposals to increase the work year, to curtail severance pay, to reduce vacation and sick allotments and raise health insurance contributions for new hires. Their assessment closed that with “overtime and other extras, the village police force received an average annual salary of $141,384 before the arbitration award took place,” among the best paid in the state.
Village administrators are caught in a vortex of badly engineered law and political chicanery that goes well beyond the tolerable level. A clarion call to bring some form of reality into play continues to be ignored. The City of Detroit has been brought to its knees in its bankruptcy filing, Mayor Bloomberg exhibits unease and the taxpayers of the Village of Rockville Centre will have to live with increases in costs that might have been avoidable. In my next column, I’ll explain what Governor Cuomo intends to accomplish for cities he identifies as “virtually broke.” Stay tuned.