By DEBORAH A. MILES
Gov. David Paterson held a news conference July 29 to officially announce the state of New York was in a recession. With a constant eye on the state’s fiscal condition, PEF jumped right in to address the economic downturn.
The mobilization department sprung into high gear, making sure the union‘s communication network was above par, while PEF leaders scrutinized the budget
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Paterson placed the deficit for next year at $6.4 billion.
“In the beginning of May, our budget director projected our New York state deficit over the next three years at $21.5 billion – that was a record. But things have changed. That number has now erupted to $26.2 billion – a staggering 22 percent increase in less than 90 days,” Paterson said.
The governor ordered an immediate hiring freeze and told state agencies to reduce spending by $630 million in the current fiscal year, a roughly 7 percent reduction in state agency spending beyond the 3.35 percent reduction he called for in May.
“PEF understands there will be hardships for the citizens of New York as a result of the economic downturn, but the state work force or state services should not bear a disproportionate amount of the burden,” said PEF President Ken Brynien.
“State agency budgets already have been cut by a half-billion dollars, just as steps were being taken to restore the state’s ability to provide services to its citizens. There needs to be a balance between cost cutting and adding revenue,” Brynien said.
Offering
alternativesThe governor said he would welcome creative solutions during this harsh economic time. Brynien met with the governor in August and expressed PEF’s concerns.
With state agencies already being asked to see where they can trim services, Brynien said PEF strongly opposes cuts to the state work force that could result in layoffs, and will take whatever action is necessary to preserve the job security of PEF members and the services they provide.
“One alternative previously suggested by Joseph Stiglitz — the noted economist and 2001 Nobel Prize winner in economics – is to safeguard our work force by placing a temporary surcharge on the wealthiest New Yorkers,” Brynien said. “People in New York whose incomes exceed a half-million dollars pay only 6.5 percent of their income in state and local taxes. The rest of the taxpayers pay 12 percent. By temporarily raising taxes on millionaires, the state would generate up to $3.75 billion a year.”
Another way to raise revenue is to enact New York’s Returnable Container Act, more commonly known as the “bigger, better bottle bill,” which could raise $25 million this year, and $100 million in following years.
Cutting costs
A way to reduce costs without adversely affecting state services is to reduce the use of consultants, especially where the same work can be performed by state employees.
“The state could save between $500 and $750 million annually,” Brynien said.
“The state also spent more than $518 million last year on overtime. If the state hired more state employees, instead of paying overtime, it could save $150 million a year.”
And Brynien said the state could save $200 million annually by using combined purchasing for all state-funded health care programs.
“This would allow the state to use its purchasing power to negotiate lower prices from the drug companies and cut costs for, not only the state, but for local governments, too,” Brynien said.
“We hope to work creatively and wisely with the governor. But we may have to reach a new level of union power by coming together to confront what may happen during this economic downturn,” Brynien said. “Members should stay informed and be ready to protect their jobs.”
