The trouble with binding arbitration
For a good example of what’s wrong with binding arbitration in New York state, look no further than last week’s ruling by the state Public Employment Relations Board in a police contract dispute in Scotia. These awards almost always go in favor of the union, and, predictably, this one did as well, despite some compelling arguments by the village.
The award covers five years, all the way back to 2009, when the last negotiated contract expired. Public employees like to say they’re “working without a contract” in such cases, as if they were taking some great risk and making some great sacrifice. But that is far from the truth.
Thanks to the Triborough Amendment, the old contract stays in force until a new one is signed, with the same salary and benefit provisions, including those automatic “step” and longevity raises. In most public-sector labor disputes, the employer (the municipal government or school board) eventually caves, since, after all, it isn’t their money and they can always get more from the taxpayers — at least they could until the 2 percent tax cap was passed last year.
But police and firefighters have an extra security blanket in binding arbitration. It was instituted by the Legislature in 1974 as an experiment, after heavy lobbying by the police and fire unions, and has been routinely extended, including this year, even though Gov. Cuomo had targeted it for reform.
The arbitrators are required to look at compensation patterns among “comparable” jurisdictions. One would think that would mean similar-sized municipalities with similar crime numbers, etc. But in most cases, they simply look at what other police and firefighters in the area get (so one lucrative contract leads to another). That’s what they did with Scotia, comparing its cops to those in the city of Schenectady and others in Schenectady County.
The result was 3.25 percent raises for each the first three years and 2 percent for the next two. This during a deep recession, when most private and even public employees were getting minimal raises or none at all.
The village of Scotia pointed this out to the board, to no avail, just as its argument that the Scotia force should be compared to similar ones elsewhere fell on deaf ears.
Besides comparability, the arbitrators are supposed to consider a municipality’s ability to pay. Here, they decided that Scotia’s budget isn’t that strained; but, based on past history in the city of Schenectady and other places, the ruling would have been the same even if it were.
Binding arbitration is the reason police and firefighters’ salaries have grown far faster than other unionized public employees’, making them 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.
Ideally, the Legislature would end binding arbitration for police and firefighters and let them negotiate just like other unionized public employees. At the very least, it should recognize the intent of the tax cap and limit arbitration awards to 2 percent for base salary, steps and longevity increments, as well as fringe benefits.