TRUTH BE TOLD Taxes should pay for good, but not fat, jobs By MARTY O’CONNOR Gov. Cuomo is fast tracking his privatization schemes for the state Office for People with Developmental Disabilities (OPWDD) and the state Office of Mental Health (OMH). He claims the private sector provides services cheaper. But this only looks at the top layer. If you look at the initial costs, it costs the state less to have family members or hourly employees provide services, instead of full-time, fully trained, salaried state employees. However, closer inspection reveals other costs. The governor has decided it is better to take the money out of the hands of the people actually doing the work and place it into the hands of a few owners/managers. The average hourly cost of pay and benefits for a state-employed mental health therapy aide is $28.44. The private sector pays their employees $10 per hour. Big difference, right? Big savings to the state, right? Well, maybe not so much. You see, even though the private-sector hourly employee is being paid $10 by the private contractor, the state (according to reports published in The New York Times) is paying the private contractor about $40 per hour for these services. So, the state is paying more for the services. Where does the extra money go? It goes into the hands of the owners or top managers of the private-sector contractors. Now, the full significance of these privatization moves becomes clearer: You stop using taxpayer money to support good middle-class jobs with benefits and, instead, give it to a few private-sector executives. The New York Times reported on one of these executives whose annual pay is nearly $400,000, which is not an unusual salary for these executives. Now, the governor wants to limit the annual executive compensation of these contractors to $199,000. That’s still more pay than the governor or the state commissioner for people with developmental disabilities receives. And it’s still wrong. Tax dollars should not be going to support exorbitant executive salaries. The money should be going to support good middle-class jobs for the workers who actually provide the services. Instead of a cap on salaries, executive compensation should be tied to front-line workers’ salaries. No executive should be allowed to make more than some factor of the front-line workers salaries. So, if a front-line worker is making $15 per hour, which works out to $31,200 per year, then you could allow the executive to make four times as much, which would be $124,800. That’s still a nice salary, but lower than the governor’s and the commissioners.’ Then, if the executive wanted to earn more, she or he would be obliged to raise the pay of their employees who actually do the work. Of course, the simple solution would be to just keep the services state-operated and avoid all of these machinations.

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