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Binding arbitration tying municipalities in knots

Monday, May 13, 2013
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When binding arbitration for police and firefighters was introduced in New York state in 1974, after a big lobbying campaign by the unions, it was regarded as an experiment. But it has been routinely extended by the Legislature. At the end of June it’s set to expire again, and this time should be allowed to lapse — or, if extended, at least limited.

The reason is that the system, which makes binding arbitration compulsory as the final stage of a labor impasse, is so one-sided that it discourages and distorts collective bargaining. The unions know they’re going to get, if not all they ask for, at least a good deal from the arbitration panel (which consists of one person chosen by the employer, one by the union, and a mutually acceptable third party, who serves as chairman). So they have little reason to seriously negotiate, especially since they also have the Triborough Amendment, which keeps in force most of the provisions of the previous contract, including “step” and longevity increments, after it has expired.

The arbitrators are required to look at compensation patterns among “comparable” jurisdictions — i.e. what other police and firefighters in the area get — so one excessively lucrative contract leads to another. They’re also supposed to consider a municipality’s ability to pay, but never seem to.

The result, according to a new report by the Empire Center for New York State Policy, has been average salary increases of 3.3 percent for police and firefighters in the years since the 2008 recession, down only slightly from the 3.6 percent increases in the five years before. And, over time, salaries that have grown far faster than other unionized public employees’, making police and firefighters easily the best paid in the state. Add generous health benefits, and early retirement with pensions based on those salaries (often inflated by overtime in the final years), and police and fire costs are pushing many municipalities to the financial brink.

The Legislature could allow the binding arbitration law to expire at the end of June, and let police and firefighters negotiate just like other unionized public employees, such as teachers. Or it could keep arbitration but limit awards to 2 percent for base salary, steps and longevity increments, as New Jersey did in 2010 (and, ideally, benefits as well). At the very least, it should cap awards for fiscally distressed municipalities, as Gov. Cuomo proposed in his executive budget, a provision that, unfortunately, was dropped in the adopted budget.

 
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comments

May 13, 2013
7:41 a.m.
wmarincic says...

Why must it be for the people that risk their lives to protect us. What about teachers and state workers, they have the same Unions and cost us much more than our Police and Fire.

May 13, 2013
8:20 a.m.
reader1 says...

Binding arbitration was implemented to protect workers' rights who do not have the ability to strike. So, you needed a system to protect their rights because the government officials who would make those decisions are not infallible.

Nonetheless, the system needs major revisions.

First, you need real independent arbitrators not beholden to the unions or the politicians. And, you need people who really have expertise in the necessary areas -economists, health insurance, tax deferred retirement plans (also independent from both involved parties). You do not have experts, true experts, making an informed decisions about these matters.

Reform the system and you can pay the officers and firefighters fairly for the challenging job they have, and do what is best for the municipalities. It might be possible that both sides will make out a lot better.

May 13, 2013
5:19 p.m.
birmy says...

To wmarincic:

If you are talking about absolute costs then yes. The teacher budget is larger than police and fire. But for only 1 reason. The number of students being educated in NYS requires a large number of teachers. You could raise class size to an average of 35-40 kids per class and it would not make a difference. Teacher costs dwarf police and fire. Someone needs to be in the classroom. I read an article about the proliferation of robots coming in the next 15-20 years. Maybe that is the answer.

But you lost me when you seem not to realize that police and fireman make more as individuals and cost the taxpayer 50% more per employee in pension costs than teachers. Read again: 50%. For all we hear about teacher pensions going up (nearly identical percentage to state workers by the way) the aforementioned statistic (50%) is cited on the back page in newspapers. Police and fire earn every penny as you mentioned, they risk their lives. But when you can retire after 20 years and also count all the overtime towards your pension (teachers get zero overtime and can count only 10% of their extra work/duties towards their pension) you start seeing pension numbers for police and fire that rival Superintendents in school districts. Supers like it or not are the CEO's of districts managing 10-180 million budgets. I am not saying it is wrong for police and fire to retire with $80,000-$90,000 pensions in Capital Region. 10,000 NYC retired cops earn 6 figure pensions. Nor am I saying they do not earn it. But it seems disingenuous to suggest teachers are raking it in when anyone who knows anything about pay scales would realize they make far less than police and fire and not just in retirement. In one small city district in Albany County a 2nd year policeman makes $58,000. In that same district it would take a teacher 14 years to make that much money! I believe Niskayuna police are not paid nearly as well as Schenectady so there are differences in pay even within the community of course.

Let's get to the answer. If it is not affordable then change it. Period. They interviewed a NYC cop about his $160,000 pension and he stated something to the effect that if overtime is being abused then change it. If taxpayers desire 50 kids in a room so the overall budget is 15 billion in stead of the current 21 billion then do it. I have stated before in these posts I do not know where the money goes. A teacher, that is required to have 6 years of college, starts at $38,00-$46,000 and ends at $80,000-$90,000 30 years later and earns a $50,000-$60,000 pension in Capital Region. You can bookmark those numbers as there is very little fluctuation in them. If that is unaffordable then I suppose it needs to be changed. That is why we are on Tier 6. (up from Tier 4 just a few years ago.)

A pharmacist, requires 6 years of college, starts at $115,000 according to Albany College of Pharmacy. Maybe health care costs have got something to do with public sector costs?

May 14, 2013
7:21 a.m.
wmarincic says...

Teachers get no overtime, wow.... They have three months a year off plus every weekend and holiday. As far as state workers, I remember when they were furloughed one day per week, the state still ran, that tells me that we have at least 20% too many people working. NYS workers make more than double the mediun income in New York with pay and benefits. http://en.wikipedia.org/wiki/New_York_lo...

May 15, 2013
8:43 p.m.
birmy says...

Your original post insinuated that police and fire are somehow getting bashed more so than teachers and state workers. I would love for their to be a study on how many "negative" articles if you want to call it that have been published over the last year and I have to believe the vast majority have been on teachers. Sure - once a year we see the highest paid employees in the cities and of course it is always police and fireman because they are eligible for overtime and earn 50% more than their base salaries in many cases. Is that a negative article? I guess no more negative than showing city school students underperforming their suburban counterparts. But the vast majority of negative articles IMO has been about teachers. Never suburban teachers. They seem to be doing well. Lots of articles bashing city school teachers. Somehow they must not be as good as suburban teachers.

Everyone can be mad at what teachers make. But your original post insinuated that teachers cost the state a lot more money than police and fire. In absolute terms a wholly true statement. But when we peel back the onion it does not pass the smell test. Everyone knows as valuable a service as police and fire provides they cost the state far more per employee than the per employee teacher cost. In fact in terms of pension costs 50% more per employee this upcoming year. Since at least 1983 teachers have not been able to use more than 10% of their extra pay (chess club, coaching) towards their final average salary for pension purposes. That has not been so with police and fire. That is why they are always the highest paid employees year in and year out in the city as overtime counts for their pension. It is not for me to decide if that is right or not. It is the way it is. But we shouldn't make it seem like teachers are raking it in more so than police and fire. They are not even in the same ballpark. And because police and fire risk their lives maybe they should be. I think teachers earn their pennies too. 60% of teachers quit teaching within the first 5 years so the benefits may not outweigh the stresses IMO. Why would 60% quit if it was a cake job with lots of time off? Why?

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