I was thrilled to learn that Governor Andrew Cuomo called for the reform of the arbitration panel laws today. The Governor is suggesting that arbitration panels be barred from increasing compensation by more than 2 percent a year if a municipality meets criteria for a “fiscally distressed” municipality. New Jersey adopted a similar law a few years ago.
I believe that this proposed law, if approved, will make it easier for every locality in the state to resolve contract disputes with public safety unions. Right now there is little incentive for unions to stay at the bargaining table if they disapprove of the local governments offer because they know that arbitration panels will probably mandate larger increases. Local governments settle contracts at higher amounts than they could afford because they know that the arbitration awards will be even more costly if they don't settle. During the height of the recession some arbitration awards were in the 4% salary hike range-state wide.
Personally, I'd like to eliminate arbitration panels. I think local governments should be able to set salaries for all employees. But, I recognize that lawmakers are unlikely to take that step. The Governor's proposal is a great step in the right direction.
A copy of a statement I made in 2010 about this matter follows.
LOCAL GOVERNMENTS WOULD BE ABLE TO REDUCE COSTS OF RUNNING GOV IF ARBITRATION PANELS ARE ELIMINATED
Release Date: May 17, 2010
Elected officials have to make difficult choices--do we settle contracts and award increases greater than what we would give other employees but less than what arbitration panels have awarded other localities to avoid arbitration panel determinations OR do we reject contracts --only to see an arbitration award made that is even higher than that we think we could afford? If we don't settle we are taking a big risk. If we do settle we may be granting increases that we normally would not grant, if there was no arbitration panel in place?
Taxpayers who are concerned about the high cost of government should reach out to all candidates for state-wide office and our State Legislators and ask them to support this needed reform.