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GOVERNOR CALLS FOR REFORM OF ARBITRATION PANELS--WILL HAVE POSITIVE IMPACT ON SALARY NEGOTIATIONS
Release Date: January 22, 2013

Over the years I have called for the elimination or reform of state arbitration panels - which have the power to set salaries of police and firefighters. The arbitration panels have made it very difficult for local governments to keep taxes down since we have no control over part of our budget.


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.

 

The Governor said that employee compensation should follow the same 2 percent guidelines that municipalities face with the 2 percent tax cap. In addition, arbitration panels will be required to take into account the rising cost of health care when ruling on contracts.

 

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.

PAUL FEINER

LOCAL GOVERNMENTS WOULD BE ABLE TO REDUCE COSTS OF RUNNING GOV IF ARBITRATION PANELS ARE ELIMINATED
Release Date: May 17, 2010

I have sent letters to County Executive Rob Astorino, all the members of the Westchester delegation to the NYS State Legislature, members of the business community and Town Supervisors/Mayors in Westchester urging them to support a proposal to eliminate arbitration panels.
The county, local governments and fire districts have NO CONTROL over salaries of police and fire fighters. We can negotiate salary agreements. However, if the unions are not pleased with what we are offering our employees –they have the ability to go before an arbitration panel which dictates the salary hikes. As a result of this state law salary increases for emergency service personnel usually exceed inflation. Paul Feiner
In recent months many Westchester residents have complained about high property taxes. The New York State Legislature could and should respond to the call for reform by amending the state law that prevents local governments, fire districts and the county of Westchester from unilaterally deciding on the salaries of police and fire fighters. There is a need for an amendment to the Taylor law so that the salaries of police & firefighters are not determined by arbitration panels. In my opinion, the salaries should be decided by local elected officials who are responsible for the approval of a budget. How can you expect local elected officials to control budgets when we don't have any control over the setting of salaries of a large number of our employees?
The Police & firefighters benefit from larger salary increases than many localities can afford because of a labor law (Taylor Law). This law was approved to prevent police and emergency services from striking. In lieu of not being able to strike, the police & fire fighters are able to go to an arbitration panel if they can't reach a collective bargaining settlement. The arbitration is run by a panel that has given very favorable contracts to the PBA & firefighters union over the years because the PBA & firefighter unions has a voice along with local governments in the selection of the panels.
The reason why salaries of police and firefighters are so high is because the way the arbitration panel comes to a decision is based on comparing like areas. Even in these economic difficult times when so many people are out of work, arbitration panels are awarding salary increases of over 4% a year.

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?
Another negative to the arbitration concept-- if members of the PBA or firefighters union receive a large increase, members of the Teamsters and CSEA (which are not subjected to arbitration procedures) have a stronger case that they, too, should be entitled to larger salary adjustments? How can local governments justify giving some employees a 4% increase and others a zero or one percent increase? The CSEA and Teamsters use the arbitration awards to push for salary increases for themselves.
If our state lawmakers want to help local governments cut back on spending and if they would like to see property taxes come under control - the elimination of arbitration would be an important step.
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.
Sincerely,
PAUL FEINER
Greenburgh Town Supervisor

 

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