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Taylor-Made Taxpayer Abuse
John A. Barnes
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A Rockefeller-era law is busting municipal budgets in suburban New York. Gotham is next.

When Suffolk County Executive Robert J. Gaffney announced his latest budget in September, he should have been bringing good news. A nearly decade-long economic boom had put the county in solid financial shape, with the general-fund budget boasting a healthy surplus. But Gaffney had to ask for a fat 11 percent tax hike to fill a huge $35 million hole in the county's law-enforcement budget.

State arbitrators dug that hole earlier in the year when they awarded Suffolk's nearly 2,000 police officers a spectacular new contract that hiked their already generous $70,000-plus base salary 20 percent over the next four years. By 2003, the average Suffolk County patrolman—already among the highest-paid in the nation—will make a mind-bending $103,000 annually. Salaries in neighboring Nassau County, where police compensation is, if anything, even more extravagant than in Suffolk, are poised for a similar upward spike. This at a time when the county teeters on the brink of bankruptcy, in part thanks to such generous police pay.

How did this happen? Weak-kneed politicians get some of the blame, but the real problem is the state's 1966 Taylor Law. Named for a University of Pennsylvania professor who helped write the law at Governor Nelson A. Rockefeller's behest, the legislation banned public-sector strikes and set up the Public Employment Relations Board (PERB) to resolve future public-sector labor disputes. If negotiations between a public union and a municipality reach an impasse, a PERB arbitrator steps in and makes a binding decision that neither party can dispute.

The PERB works as a relentless machine to drive up labor costs. The arbitrator looks at four criteria in making a decision: how wages, hours, and conditions of employment compare in similar communities; the interests and welfare of the public and the ability of the jurisdiction to pay; the hazards and other unique circumstances of the job; and, finally, previous contracts.

The first criterion is the real killer for municipal finances. In the late 1980s and early 1990s, Nassau County Executive Thomas Gulotta agreed to a series of porcine police contracts in a largely successful effort to portray himself as a supporter of law and order. These settlements, however, became the benchmark for arbitrators in Suffolk County. "In every Police Benevolent Association economic proposal at issue," reads part of the 2000 Suffolk arbitration, "Suffolk County lags behind Nassau County."

But the other criteria have pushed salaries up too. PERB arbitrators have interpreted the "interests and welfare" clause to mean: a well-paid police force serves the public best. You might think that requiring the arbitrator to consider the "ability of the jurisdiction to pay" would offer taxpayers some protection. But the arbitrator in the Suffolk case gave no hint that the county and its residents had schools, roads, parks, or anything else on which they might choose to spend money. The only consideration seemed to be the county's constitutional taxing limit. Suffolk, despite its high taxes, is nowhere close to that. Ergo, the county could "afford" the wage hike. The PERB has also interpreted the "previous contracts" criterion as a public-employee Brezhnev Doctrine: earlier gains are irreversible. Thus, contracts can go in only one direction: up and up.

This labor-friendly environment makes the negotiating process between governments and public-employee unions into a cruel joke on taxpayers: unions just hold out for arbitration, since they know it will go their way. So certain were Suffolk officials of the inevitability of Taylor Law arbitration in the police contract that they didn't even bother putting a wage offer on the table.

And the joke isn't just on taxpayers living in the Nassau and Suffolk police districts. The threat of binding arbitration means that town and village officers on Long Island almost always receive contracts that track those of the larger departments, imposing a heavy burden on local budgets. Indeed, some small jurisdictions actually feel compelled to offer pay and benefit packages in excess of those of ultra-plush county departments, in order to lure officers to work on their smaller forces.

Though Long Islanders get good police service, the exorbitant personnel costs take their toll. The high cost of putting one officer on the street, for example, means curtailed hiring. One-man patrol cars are the norm on Long Island. Foot patrols are rare. Combined with the high pay and benefits that encourage veteran officers to stay on the job as long as they legally can (until age 62), you get an aging force in what is a young person's job. Essential services, such as vehicle maintenance, slip. Ambulances, which in Nassau the police department operates, frequently break down.

For years, such settlements only hit areas outside Gotham, since the city had state permission to handle labor arbitration with cops through its own Office of Collective Bargaining. Recently, however, Gotham police won their long lobbying effort to have the PERB review their contracts instead. While no one knows how this will play out, the big, cushy contracts on Long Island may well factor in NYPD contract talks for the first time. And after all, despite having much more dangerous jobs, New York City police make far less than their counterparts on Long Island. They also work, on average, about 200 hours per year more than Nassau officers. And if the cops get higher pay, pattern bargaining will probably lead to big raises for the other municipal unions too.

The Taylor Law's PERB requirement is one of a host of centralized mandates that Nelson Rockefeller bequeathed to New York. Like all of these mandates, it has made a mockery of local control, disempowering the people on the spot, who should be figuring out how to spend limited resources on competing goods. Clearly something has to give, unless one believes that public-sector employees are entitled, now and forever, to higher wages than the people who pay their salaries.

 

 


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