Relates to a one year wage freeze

Summary of provisions

Section one declares the legislative findings justifying this bill.

Section two subsection (1)(a) amends the Civil Service Law by adding a new section 137 which would suspend all increases in salary or wages of employees of the state, municipalities, and school districts for a period of one year.

Section two subsection (1)(b) provides that no retroactive pay adjustment of any kind shall accrue or be deemed to accrue during the period of wage freeze and no such accruals shall be paid at the time the wage freeze is terminated.

Section three gives any party in interest a direct appeal to the New York State Court of Appeals and any such case shall be given preference over other causes.

Section four provides that this act shall take effect immediately and shall expire and be deemed repealed one-year after the effective date.

Existing law

Precedent for this bill occurred in 2003 whereby the Buffalo Fiscal Stability Authority Act (BFSA) was adopted and empowered the City of Buffalo to impose, among other measures, a wage freeze. Prior to that, in 1975, the New York State Financial Emergency Act was enacted and authorized New York City's wage freeze. Both wage freezes were challenged on constitutional grounds and were upheld by federal and state courts.

Justification

The State of New York is undeniably in a state of fiscal emergency. The projected deficit is close to $10 billion. Next year's deficit is expected to be at least $15 billion with long term deficits nearing $60 billion. Pension costs continue to increase exponentially and the federal stop-gap stimulus funding ceases at the end of this year.

The New York State government must take quick decisive action if there is to be any hope of helping its residents to financially survive and prosper. Enacting a temporary wage freeze on all public employees is a realistic and necessary place to start, and one which will generate significant results.

In fact, school districts would be able to address at least half, if not more, of their budgetary concerns and could alleviate the need to

raise property taxes. Freezing salaries in school districts would also result in saving thousands of jobs. For example, a number of school districts in Nassau and Suffolk Counties have already voluntarily agreed to make varying concessions to their contractual salary increases, thus avoiding the need for layoffs.

Enacting a wage freeze at this juncture would realize substantial savings: NYS, $400 million; Suffolk County, $65 million; Nassau County, $30 million; The Metropolitan Transportation Authority, $100 million; New York City $1 billion.

However, this action alone will not completely resolve New York's fiscal problems, and other important steps will be needed to eliminate the current deficit and get our state back on the road to recovery. Admittedly, a long term solution to our fiscal predicament will necessitate implementing measures that demonstrate real fiscal discipline, including enacting a state spending cap, reforming the state's regulatory framework, ending unfunded mandates on schools and local governments, and providing significant tax incentives to small businesses that will generate job growth and stimulate the economy.

The continued proliferation of the State's fiscal difficulties threatens the economic vitality of the entire State. While more drastic alternatives such as elimination of municipal jobs, school closures, and elimination of essential services are available, it is in the best interest of all taxpayers that the State impose a temporary public employee wage freeze instead. This is a reasonable and necessary first step towards ameliorating the current fiscal crisis and a key element in promoting the overall economic and fiscal stability of the State.

Legislative history

2010: S.7940 Civil Service and Pensions

Fiscal implications

Substantial savings to state and local governments of approximately two billion dollars.

Effective date

This bill takes effect immediately and shall expire and be deemed repealed one year after the effective date.