Paterson should be negotiating with AIG

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By Michael Quint


March 24 (Bloomberg) -- New York Governor David Paterson is preparing to fire 8,900 workers unless their union negotiates an agreement to forego a pay increase and some benefits as the state confronts a record budget deficit.

The terminations would be the first by the state since the early 1990s, and would follow the refusal of unions to give up wages or benefits previously negotiated or to submit counterproposals to the governor’s plan.

“Labor organizations representing state employees have rejected all of the savings options put forward by the Paterson administration,” Dennis Whalen, director of state operations said in a letter sent today to heads of state agencies.

The governor’s goal was to help the state close a $16.2 billion deficit in the year beginning April 1, “while avoiding large-scale layoffs,” the letter said.

“No segment of the state is immune to the harsh reality of the fiscal crisis,” said Senate Majority Leader Malcolm Smith, a Democrat from New York City. He urged union leaders “to step up and renegotiate a fair agreement that is consistent with the principle of shared sacrifice.”

Paterson, a Democrat who faces election next year, and Budget Director Laura Anglin couldn’t be reached for comment. Officials at the Civil Service Employees Association, which represents 265,000 current and retired government workers, weren’t available for comment.

Details of the firing would be distributed by the Division of Budget to agency heads within a week, Whalen said.

Union officials have suggested state leaders balance their budget by increasing personal income taxes on higher-wage earners, according testimony last year.

December Plan

In a December budget plan, Paterson proposed cuts in worker compensation that would have saved the state $368 million in the year beginning April 1, and $292 million the following year. Next year’s biggest savings would have been $180 million by eliminating a scheduled 3 percent pay increase. Officials hoped to save $121 million by deferring five days pay until workers end their employment or the state’s financial condition allows repayment.

The plan also called for workers to receive the 4 percent pay increase for the year ended March 31, 2011, for a total gain of 10 percent over the life of the current four-year contract.

Other proposed changes would reinstitute requirements that new hires pay 3 percent of their salary to the pension plan after 10 years of service and lift their minimum retirement age to 62 from 55. Workers currently pay nothing for their pensions after 10 years. The state also sought increased health-care contributions by newly retired employees.

The December spending plan projected 196,292 workers at March 31, 2010, down from 199,400 at the end of this month.

The biggest decline was in the Department of Corrections where 1,342 jobs were expected to be lost.

To contact the reporter on this story: Michael Quint in Albany, New York, at

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1. correct spelling please: PATERSON

yes INDEED :hi:

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2. Sorry. Corrected.

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3. good article!

:D