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November 2, 2009

The zero option

E.J. McMahon

My op-ed in today’s New York Post explains why—and how—the Paterson administration should declare a fiscal emergency and seek to impose a three-year freeze on all state and local employee salaries in New York.  This would save taxpayers statewide at least $2 billion next year alone, I estimate.

Could wage hikes already collectively bargained—such as the 4 percent raise state workers are due to receive next April 11—nonetheless be deferred by an act of the Legislature?  My answer:

The original precedent for a state-mandated halt on collectively bargained pay hikes is the Emergency Financial Control Act, enacted in 1975 to deal with the New York City fiscal crisis. Similar provisions were put in place under control laws later enacted to rescue other troubled cities, including Yonkers and Buffalo.

Federal courts have twice upheld state-mandated wage freezes for public employees in New York — most recently in 2006, when the US Second Circuit Court of Appeals ruled a freeze of Buffalo teacher salaries was “reasonable and necessary” despite the “substantial impairment” of the teachers’ contract.

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