State budget belt getting
By SHERRY HALBROOK
The summer of 2009 has been memorable for its backbeat of angst. From Washington
to Albany and PEF members’ worksites, worry and strife over how to get and hold
onto money, jobs, power and control took no vacation.
September signals the end of summer, but no relief is in sight from the heated
debates and warring viewpoints.
“Just one-quarter into the state’s 2009-10 fiscal year, and it is already
running another $2.1 billion in the hole,” said PEF President Ken Brynien. “The
governor has said he will introduce yet another budget revision in September to
address it, so we are waiting to see how that may affect our members.”
In announcing the first-quarter shortfall, Gov. David Paterson tried to sound a
hopeful note.
“Although the budget enacted in April took substantial action to close a
combined $20.1 billion budget gap, the fact remains that revenues have continued
to fall, and this will force us to make further difficult choices,” Paterson
said. “Last year reflected a fundamental transformation of our economic base,
but we believe the worst deterioration of our economy may be behind us.”
Paterson blamed the growing deficit on “continued weakness in the economy, which
has resulted in lower-than-projected year-to-date tax receipts.”
“Since the beginning of the state recession in August 2008, New York has lost
236,000 jobs.
Employment declines are expected to continue into 2010, and the state
unemployment rate is expected to peak at 9.1 percent in the first quarter of
2010,” Paterson reported in late July.
The enacted state budget and Paterson’s financial plan assumes he can get $460
million in savings over two years from work force reductions and related
initiatives. The plan assumes these savings from a combination of severance
payments, vacancy controls, voluntary reduction in work schedule, a new pension
Tier 5 and other measures.
That plan projected the number of state employees would total 128,803 at the end
of the current fiscal year on March 31, 2010. However, Paterson cautioned that
projection will be revised when he announces his newest budget recovery plan
this month.
As the governor put it, “To achieve the needed ... savings, more stringent work
force measures beyond those outlined above may be necessary.”
Brynien said, “We hope the $20,000 severance packages offered in late August to
some state employees in positions the state can do without for at least a year,
will have helped trim state expenses and avoid layoffs. That is what they were
meant to do.”
Brynien said he heard from many PEF members who were hoping to receive a
severance offer and he was pleased to see published reports of one or more state
agencies working to cast as wide a net as possible in extending the offers. Some
agencies, however, were still trying to find other ways to save, instead of
giving up any more positions.
“For our members who were already contemplating leaving state service, the
prospect of receiving an additional $20,000 in severance pay was very
attractive,” Brynien said. “However, it’s primary purpose is not to be a
retirement incentive, so much as a way to avoid the need for layoffs.”
Meanwhile, the second major strategy Paterson had counted on to avoid layoffs,
had been stalled by state legislators preoccupied with other business.
Paterson’s Tier 5 pension proposal was never even introduced as a bill in either
house, much less passed.
Both PEF and the Civil Service Employees Association agreed earlier this year
not to oppose a new Tier 5 that would require future state hires to permanently
contribute to their pensions, as part of an agreement with Paterson to preclude
layoffs of their members for two years. However, even without their opposition,
some people doubt Tier 5 would pass.
“We’ll have a better idea of how this will play out after the governor announces
his new plan and, presumably, call the Legislature into special session to act
on it,” Brynien said.
