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Thursday, April 24, 2014
Bargaining down the future

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.

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