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Sponsor resolution A 8603 to curb state mandates.

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Bill A 8603

The Center is a cadre over 200 of the most prominent business and community leaders on Long Island and is committed toward the goal of weeding out inefficiency in state and local government. Since the state Constitution limits the ability to impact existing pensions, the defined contribution under this bill would apply to incoming employees.

We, at the Center for Cost Effective Government, worked to enlist the support of statewide taxpayer organizations to have Governor Cuomo and the State Legislature refocus their legislative agenda on one of the most important issues facing New Yorkers today - the crushing state mandates and regulations which are bringing school and local budgets to the brink of disaster.

We criticized the fact that former State of the State addresses contained very little mention to the fact that local budgets, which are now for the most part depleted of their reserves, are on life support.  We believed that it was no time for the state government to simply pretend that this crisis that localities are facing is simply going to go away by not focusing on it.  This is why the Center for Cost Effective Government began promoting an agenda of reforms that we believe are essential for the State Legislature to pass.

We noted that the governor’s panel on mandate relief in 2011 published a white paper that did not recommend many specific overhauls that would have much of an immediate impact on our local governments and local taxpayers.

We knew were our legislators to put together a specific plan for real mandate relief, taxpayer organizations around the state could place pressure on our representatives in the Senate and Assembly to join on a single bill to finally provide the type of mandate relief that will truly make a difference.

We implored the state to take action to enact the following:

1. Real pension reform: This includes changing to a defined contribution system as opposed to the present defined benefit program. Under defined contribution, the employee pays a certain fixed amount into his pension account and the employer matches it. This is the system commonly used on the private sector.  The size of the fund grows, or falls, as does the market.  Our present public system plugs in a guaranteed return of 7.5% to the government employee pension system. This guarantee requires the taxpayer to make up the difference when the actual growth comes in at a lower rate. This is especially devastating when recessions lead to negative growth.

These changes are structural in nature, and should not be confused with last year's program introduced by the Governor that mitigates pension increases today by paying more down the road.  Yes, it gives short term relief, but it doesn't address the underlying unsustainability of the program's present course.

2. End mandatory arbitration: Mandatory arbitration has resulted in some of the highest public safety costs in the nation for many of our counties.  Some police officers are now earning $200,000 a year while receiving cash-outs of half a million dollars for unused sick and vacation time.  This does not even address the fact that many are retiring on pensions of $100,000 to $150,000 a year. This is on top of up to six weeks vacation, 26 sick days, over 25 X-days (days off in between shifts) and 13 holidays. In all, a veteran officer can receive over 100 paid days off per year due to outrageous provisions embedded into contracts due to care-free arbitrators. Mandatory arbitration removes accountability from the decision makers who are ultimately accountable to the taxpayers.  It is time for mandatory arbitration to be revoked.

The Governor began in aggressive fashion, proposing a 2% cap on awards given for police salaries through arbitration, as New Jersey's Chris Christie had accomplished.  The 2% cap on awards should be applicable to every county and huge loopholes (such as "longevity" pay exemptions) should be removed from any final bill.  The hard cap never passed.

A hard 2% cap, as provided in our bill, would help taxpayers significantly to control these ever-spiraling costs.
Unfortunately, a backpedalling was foreshadowed by the Governor’s announcement that he was creating a study panel, with word leaking out that no reform would advance without union support. This doomed any true reform.  The creation of the property tax cap would have been dead on arrival had the Governor employed the same cautionary strategy requiring union approval as a prerequisite.  He didn't do so with the tax cap, yet, oddly, he did so in the case of mandatory arbitration.

3) The Triborough Amendment: New York is the exception rather than the rule in having a concept such as the Triborough Amendment, which allows for public sector employees to receive automatic pay increases even after a contract has expired.  Schools and local governments have long complained that Triborough removes incentive and pressure on the unions to negotiate concessions. A8603 would allow for salary and benefits to continue after the contract's termination, but eliminate the step salary increases during this period.

If you agree with our efforts, please sign the petition herewith.

Click the following link to view Bill A 8603.

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