OPINION: Wage freeze for public-sector employees will help taxpayers

 April 4, 2010 12:00 AM … By NYS Senator JOHN J. FLANAGAN

New York State government is at a major crossroads. Our entire manner of doing business must radically change if our residents are to survive and prosper. To bring the luster back to the Empire State, it is time for the Empire to strike back by taking bold action. Intermittent and short-term fixes are unacceptable unless serious, long-term structural reforms are immediately adopted.

The government has developed a credibility gap with the public, because too many people who work there have failed to realize that the average taxpayer is suffering. Overwhelmingly, the people I interact with want real change - and now.

Our fiscal realities dictate no less. Since Gov. David A. Paterson presented his budget in January, the projected deficit has grown from $7.2 billion to almost $10 billion - just in these few weeks. Next year's deficit is expected to be at least $15 billion, with long-term deficits nearing $60 billion.

Already-high pension costs are expected to continue to grow exponentially. The $25 billion in stopgap stimulus funding received from the federal government to assist the budgets of state governments also disappears at the end of this year.

Call it a new paradigm; call it a fiscal punch to the gut, but this is a set of facts that legislators ignore at our own peril - and even worse, at the taxpayers' peril, too.

New Yorkers are tough and resilient. While no one rejoices at receiving bad news, the public wants an honest assessment of the challenges we face, along with real remedial actions that demonstrate that government officials actually do get it. Certain suggestions have been around for a while and have elicited polite conversation, but no real action. A state spending cap, for instance, should be a straightforward measure: It instills fiscal discipline and forces government to truly establish priorities. But just look at the enormous political challenges of its implementation. An insatiable appetite for government spending has been at the core of both our fiscal and political problems.

Reforming the state's regulatory framework would ease the crushing cost of doing business here. Ending unfunded mandates to school districts will provide relief at the local level for those already overburdened by property taxes. And developing millions of dollars in real tax credits for the small business owners who create jobs will also kick-start the state's economy. We should enact those changes, certainly, as they must be components of an overall strategy to make life better for New Yorkers.

But perhaps the single most important step that state government can take this year is to immediately enact a salary freeze statewide for all public-sector employees.

The governor verbally called for a state employee pay freeze on Thursday, when a 4 percent increase went into effect for unionized state workers. Immediately, the leader of the Senate Democrats began to battle him on it. Yes, a wage freeze is a dramatic measure, but it is not entirely unprecedented. Most important, it is necessary.

To be truly effective, the concept must be applied statewide at all levels of government, because whether it's through state or local taxes, the same money - from taxpayers' wallets - is paying the bills. Whether you work in a library, a legislature, a school district or any entity of local government - every public-sector worker would have to pitch in.

Conservative estimates for school districts alone are that a salary freeze would save at least 15,000 jobs statewide. Teachers from Roslyn and Port Washington have already made the difficult but necessary decision to forego contractually agreed-upon salary increases, in order to save jobs in their districts.

Private employers continue to be ravaged by the recession. They have laid off workers as well as cut salaries and benefits. Most private-sector employees have told me they would be ecstatic if the worst they were looking at was a pay freeze. Instead, employers are renegotiating contracts, asking for - and getting - substantial concessions.

I firmly believe that working men and women deserve good pay and good benefits in both the public and private sector, but while the private sector, including many union workers, is suffering from malnutrition, the public sector hasn't begun to diet. This is the right thing to do at a very challenging time, and it will demonstrate that government is truly beginning to listen.

The idea of a salary freeze has been gaining incremental momentum, but the time to act is now. The savings would be substantial and immediate. New York State: $400 million. Suffolk County: $65 million. Nassau County: $30 million. The Metropolitan Transportation Authority: $100 million. School districts, on average, could address 50 percent of their budget problems solely through a salary freeze - and that has a direct correlation to lowering property taxes.

While the numbers speak for themselves, there will be many who question the wisdom and legality of taking such a dramatic action. The precedent certainly exists - during the New York City fiscal crisis of the 1970s and today, in Buffalo, under the auspices of the Buffalo Fiscal Stability Authority. Prior wage freezes have been litigated and determined to be constitutional by both state and federal courts.

At this juncture, the basic question is not whether this should be done, but rather how it can properly be implemented. As a first step, legislation must be enacted now to declare a fiscal emergency for New York State - this language surely can no longer be considered controversial. And along with it, the State Senate and Assembly must pass legislation to enact a wage freeze at all levels.

Actions speak louder than words, and our taxpayers deserve no less.