To fix NY’s finances, start with gov’t workers – By George J. Marlin

The following appears in the October 22-28  issue of the Long Island Business News:

Economic and demographic reports released in recent weeks reveal that New York and its municipalities remain in deep financial trouble despite claims the recession is over and the economy is growing again.

Overall, New York’s picture remains bleak: the state poverty rate stands at 14.2 percent; households earning less than $10,000, 5.1 percent; households receiving food stamps, 12.4 percent; and civilians dependent on public health insurance, a staggering 31.8 percent.

The latest U.S. Census Bureau data places Buffalo as the nation’s third poorest city behind Detroit and Cleveland. The 16th Congressional District, which encompasses the South Bronx, maintains its rank as the poorest in the nation. Buffalo’s median household income is $30,000; the South Bronx’s is $26,700 versus the state’s median of $50,000. Buffalo and the South Bronx, like so many other municipalities in the state, are suffering from the steep decline in blue-collar manufacturing jobs and failed urban development and social policies.

The National League of Cities Report, released in early October, states that 90 percent of America’s city finance officers say their fiscal conditions continue to weaken and will be less able to meet their financial needs and obligations in 2011.

Cities throughout the Empire State are not exempt from these trends. Buffalo, Rochester, Syracuse, Binghamton, Elmira, Jamestown, Schenectady, Troy and Ithaca – one-time centers of commerce, industry and technology – are facing financial and economic doom. They are haunted by declining residential and commercial real estate values, restrained consumer spending, high unemployment, increasing public employee health care costs and pension contributions, and unfunded state mandates. Surprisingly, upstate property taxpayers pay effective rates nearly as high as those in the suburbs.

With no end to their fiscal woes in sight, these cities will have to make additional personnel and service cuts and perhaps even raise taxes. And if such measures are implemented, more economically distressed, overtaxed citizens will join the 1.2 million people who have left New York since 2000 to seek jobs in the low-tax South and Southwest regions.

Another depressing report released on Oct. 5 by New York Comptroller Thomas DiNapoli confirms there will be slow recovery from the recession. Here are some of his gruesome findings:

  • The rate of job growth is slowing and is expected to remain weak;
  • Consumer confidence in New York has fallen to its lowest level since the spring of 2009;
  • The rate of tax revenue growth alone will be insufficient to solve New York’s budget problems;
  • The securities industry continues to shed jobs. Wall Street lost 4,200 jobs this year, bringing the loss since January 2008 to 31,300 jobs.

Most disturbing: Personal income in 2009 for New York private sector workers dropped $42 billion, a 6.8 percent decline, while the personal income of public sector employees increased $240 million, an increase of 2.5 percent.

Also, the DiNapoli report states, “New York lost jobs in every sector except educational and health services, which added nearly 60,000 jobs.” In other words, while private sector employees have endured serious hardships, state and municipal employees have prospered.

Reviewing these numbers, E.J. McMahon, of the Manhattan Institute, asked: “What is wrong with this picture? If you’re in the private sector, we’re paying more in part so [government] workers can keep getting pay increases. That’s the part that really stings.”

Private sector workers can no longer afford to bear the brunt of the cost of New York’s state and municipal leviathans. If the next governor is serious about restoring fiscal integrity, right-sizing government and not raising taxes, he must use the vast powers of his office to make sure that public sector employees share the sacrifices necessary to achieve that end.

The Empire State can no longer afford the government we have and its costs must be reduced.

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One Comment on “To fix NY’s finances, start with gov’t workers – By George J. Marlin”

  1. Steven Mahlan Says:

    After working for a NY Class D Public Authority for nearly 9 years, I have to agree with your assessment to start with government workers. In my experience, many of them (I’m talking for the moment about those that are not union-represented) are politically-appointed and politically protected in their jobs. They are not adequately rewarded for improving their value to the agency (such as by achieving higher-level degrees or certifications), but are rewarded for not using sick time (although they have plentiful vacation time to use when they are sick) and received regular step increases or COLAs regardless of performance. This has a demoralizing affect on agency workers and leads to stagnation. I have also seen employees that stay in their positions for so long that they lose touch with current trends in their field of expertise and lose interest – some even fall asleep at meetings. Everyone is afraid to speak up for fear they will be accused of age discrimination. They only way to get folks like this out of the agency seems to be to offer them an expensive retirement package. I have also seen the resulting stagnation reveal itself in anger management issues.

    In this regard, I have been asking my elected representatives to consider the following:

    1) Make all NYS Public Agencies part of the civil service system, where their appointments and promotions can be considered on an impartial basis.
    2) Apply a salary cap for ALL NYS government workers, including those that work for public agencies. I agree with NYS Assemblyman Raia’s proposal to cap state employee pay (which has already been done in Minnesota).
    3) Eliminate the practice of banking sick time in order to boost pension pay. I know of one technology services retiree that collects $116K per year in pension (source: seethoughny.net). I’m not talking about someone that protects the public by facing gunfire or fighting fires or working in a hospital, but someone who sat behind a desk. Over the course of 20 years of retirement, that means the taxpayer is paying over $2million for a single person’s pension. Isn’t that ridiculous? Do we not need to make sure this does not happen again?
    4) Cap pension payments, as corporations like Northop-Grumman do.
    5) Impose term limits for all state jobs. This will force employees to keep their skills marketable and force greater cooperation among coworkers as those that leave government service mentor new, lower-salaried employees. The days of giving someone a job-for-life needs to end. The taxpayer can no longer afford to pay for someone else’s luxury.


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