Archive for June, 2009

Unemployed Swamp Fund

New York spends $100M a week as Uncle Sam shores up plan; top benefit is one of nation’s stingiest.

By James M. Odato

Nancy Golin, unemployed the past two years, lives in modest quarters in Albany on an unemployment insurance check of $128 a week. That includes a temporary $25 stipend from federal stimulus money. It doesn’t pay the bills and she hopes a Legal Project lawyer can help her hold off creditors.

“I have prayed diligently,” the 59-year-old receptionist said recently at a Department of Labor job center. “I want to work. I really want to work.”

She’s among more than 500,000 New Yorkers causing a mountain of debt at the Labor Department. Even though they receive some of the smallest weekly checks in the nation for unemployment benefits, the state’s costs for the unemployed are expected to reach $5 billion and put the state $2 billion in the red by year end.

The state is paying $100 million a week from its Unemployment Insurance Trust Fund for claims, compared with $44 million a week last year.

The biggest check an unemployed worker can draw is $405, the same level it’s been for a decade. With the $25 stimulus boost, it still is one of the smallest maximum payouts in the nation.

The average check is $314, said Nancy Dunphy, deputy labor commissioner for employment security, which is the lowest average in the nation.

She says it’s time the rate was raised. The maximum has not increased since 1999, when it received a modest adjustment.

“It’s just not enough to meet the needs today,” Dunphy said. “We’re below most of the country — New Jersey, Pennsylvania and Connecticut are far above us in the range of $600, and in Massachusetts they have a dependent allowance and can add a bit more so it can go over $900 a week.”

She said because the maximum is so low, benefits collected by workers who lose lower paying jobs is also lower. Even with the stingy payouts, the state fund is insolvent because unemployment taxes are relatively light. The state taxes employers only on the first $8,500 of an employee’s salary. As a result, the state fund can’t build up the amount needed to supply the unemployed with the small sums available in New York.

“We have a taxable wage base that is frozen in time,” said James Parrott, a New York City-based economist with the Fiscal Policy Institute, a union-backed think tank.. “The fact that it is so low . . . leads to more job loss, a downward spiral.”

He said the weekly rate must be raised, which means unemployment taxes will rise, but increased jobless benefits will help stimulate the economy because the money is spent after it is received.

The checks were always meant to be economic stabilizers so that job loss doesn’t mean spending on consumable goods comes to a total halt .

Nancy Golen, who is at the Job Center regularly, isn’t stimulating the economy much. She’s borrowing from friends and getting help from her church for basic necessities while working out payment schedules with power companies. “I’m behind on everything,” she said. A $30 gas card from the federal government helped fill her fuel tank recently and was much appreciated.

Two matching bills aimed to address the situation. Labor Committee heads in the two chambers, Assemblywoman Susan John and Sen. George Onorato, had been hopeful of passage. Momentum for change was lost when Republicans staged a coup in the Senate.

The measure proposed would have raised the taxable wages in steps, starting this year at $9,500, $11,500 next year and $13,000 the next year. Parrott said $13,000 is already common nationally.

The maximum payout would rise in July to $475 and the minimum would be $75. The maximum would rise next July to $525; a year later to $575: and $625 in 2012. In 2013 and thereafter, the rate would be half the average weekly wage in New York.

The formula for people not making the maximum would result in higher payments for them, too. Even a small increase would be welcome, recipients say.

“I’ve been looking every day,” said Robert Cristo, 39, a writer and public relations officer out of work since October. He collects $336 weekly, including the $25 stimulus boost. “It’s demoralizing. I have to understand that it’s not all my fault. We are in a difficult situation right now and it is very difficult to get back into the job market right now.”

He said he’s lucky to be living in the Capital Region, because $336 a week in New York City would be nearly impossible to manage.

Dunphy said not only is the low rate hurting the economy, but it also cuts the amount of stimulus money flowing into the state because the federal aid is based on the payment rates . The state is expecting $400 million.

She said about a million different people would have received benefits this year as they enter and leave the system.

In all, the state owes $1.3 billion to the federal government through mid-June, one of 15 states that have borrowed $9.4 billion to meet unemployment insurance obligations. That’s behind Michigan’s borrowing of $2.18 billion and California’s $1.52 billion.

The good thing is the state won’t have to pay the federal government interest on the debt it is building to pay obligations. Under the stimulus legislation, states go without interest in 2009 and 2010.

The bad news is the state’s obligations will likely cause insolvency beyond 2010, Dunphy said, resulting in a need for “a special assessment on employers” to bail out the fund.

The Business Council of New York State objects to raising the taxes and the maximums as proposed, although the employers’ group said it would be willing to negotiate. Gov. David Paterson lists the issue as a priority.

The leading proposals in the Legislature, the council says, would hurt stable employers as much as those who commonly shed jobs.

The proposals would socialize the benefit and raise taxes for unemployment insurance 14.7 percent in year one alone, the group says.

Ignoring the Unemployed

Editorial

New York State has not increased its maximum unemployment benefit — a meager $405 a week — in a decade, and a drive to raise payment levels has been derailed by the legislative chaos in Albany. While the politicians squabble, victims of the economic downturn are struggling to make ends meet. The governor and legislative leaders should increase unemployment benefits without further delay.

New York State was once a leader in providing unemployment insurance. Now it is a laggard — nationally and in the region. Connecticut pays up to $576 a week, and New Jersey up to $584. Even with an additional $25 a week temporarily added by the federal stimulus program, New York’s payments do not begin to equal the cost of living in one of the most expensive states.

Bills have been introduced in the Legislature to raise the maximum benefit to $625 over the next few years, and then to index it to 50 percent of the average weekly wage. Indexing is necessary to ensure that benefit levels, never a legislative priority, do not fall behind again. Business interests have been fighting the raises, which would be financed by reasonable tax increases.

New York’s unemployment rate was 8.2 percent last month, a 16-year high, and the number of jobless people in the state is the highest it has been in 33 years. An adequate system of unemployment insurance, which is an important part of the social safety net, is particularly necessary now. It can also be a powerful form of economic stimulus since it puts money into the hands of people who can be counted on to spend most of it right away.

The State Senate’s recent escapades are interfering with important work for the people of New York. If the state’s elected officials want to show that they care about their constituents, and not merely their own power machinations, increasing unemployment insurance benefits would be a good place to start.

Amid Senate Chaos, Hope Fades for a Bill to Raise Jobless Benefits

By Patrick McGeehan

A campaign to increase New York’s unemployment benefits for the first time in a decade has been sidetracked by the political stalemate in Albany — possibly for the rest of the recession.

Despite having the support of the governor, labor leaders and advocates for the unemployed, a bill to raise weekly jobless benefits on July 1 and close the gap in the state’s unemployment trust fund was not addressed by state lawmakers before their regular session ended this week.

The maximum benefit, which had been $405 a week for about 10 years until the federal economic stimulus program temporarily added $25 a week, is significantly smaller than those available to residents of New Jersey and Connecticut. New Jersey’s maximum is $584 a week; Connecticut’s is $576.

Negotiations to make the bill more palatable to employers continued through the weekend, giving its supporters hope that Gov. David A. Paterson would present a compromise that could be enacted. But with party leaders distracted by the battle for control of the State Senate, no progress was made.

The issue was not among those taken up by the Assembly in the final hours of the session that ended early Tuesday, nor was it on the governor’s list of measures to be considered by the Senate in special sessions on Tuesday and Wednesday. The Assembly is not currently scheduled to convene until January.

The lack of action left advocates worried about the fate of the growing ranks of unemployed New Yorkers.

“Meanwhile, the unemployment rate keeps going up, and more and more people are losing their jobs,” said James Parrott, chief economist for the Fiscal Policy Institute, a research group that focuses on tax, budget and economic issues. “New York doesn’t look good compared to its neighboring states.”

Last week, the state’s Labor Department said that more New Yorkers were out of work than at any time in more than 30 years. For May, the state’s unemployment rate rose to 8.2 percent and the city’s hit 9 percent.

For certain groups, the situation is much bleaker, Mr. Parrott said. He said that the official unemployment data showed that more than 23 percent of all black men in New York City were either unemployed, working less than full time or had become too discouraged about their prospects to look for work.

With many economists forecasting that the national recession will end by late summer, the recovery could begin before additional relief arrived for New York’s unemployed.

The rapid rise in unemployment has also strained the state’s trust fund that provides the weekly benefits. The fund has been borrowing from the federal government to cover a shortfall this year.

To fill the gap, which is projected to grow through next year, the bill before the State Legislature would have increased the amount of a worker’s annual pay that is taxed. Only the first $8,500 is currently taxed to finance the unemployment insurance system, a much lower limit than those in New Jersey and some other states.

The bill called for annual increases in benefits, starting next Wednesday, July 1, that would raise the maximum weekly benefit to $625 and adjust it for inflation each year after that. Along the way, it would have also gradually raised the payroll tax that goes into the unemployment trust fund.

But representatives of employers, led by the Business Council of New York State, have opposed the bill, arguing that the automatic annual increases would make the payroll tax too onerous for some businesses. Last week, the Business Council called the legislation a “job-killing proposal” that would raise the tax by almost 15 percent in a year.

The governor’s office had signaled that it would create a revised bill that both sides could support, but hopes for a compromise before July 1 faded as the chaos in the Senate dragged on.

“It’s a big problem that we’ve fallen so short in terms of not doing this,” said Andrew Stettner, deputy director of the National Employment Law Project, which advocates for the unemployed. “What was nice about this legislation was it got the benefits out during the recession and it had a plan for paying back the fund over several years. It was a smart approach.”

Achievement through community schools at the heart of ‘Say Yes to Education’

by Sylvia Saunders – New York Teacher

NYSUT’s Dick Iannuzzi stops in at an after-school program where kindergartners work on math skills.
Left, student Genia Reed works with teacher Amy Vargason. Photo by Lauren Long.

It’s 4:20 p.m. on a Thursday at Dr. Martin Luther King Elementary School in Syracuse and the place is still bustling.

Every seat in an after-school computer lab is filled as a teacher and teaching assistant help eager youngsters.

Down the hall, students in various classrooms, working with a college-age tutor, practice math flashcards and count in Spanish. A chorus is singing an uplifting spiritual in the music room.

Students here, for the first time, are being exposed to new enrichment offerings: leadership classes, kung fu, yoga, step dance, African art and drumming.

In the health office, pediatric nurse practitioner Theresa Zimmer tends to an 8-year-old boy’s bleeding mouth, providing a salt water rinse and a warm hug of encouragement.

Dental hygienist Judy Morgillo urges him to stop wiggling that loose tooth with such gusto.

A social worker works the hallway, chatting with students and touching base with a colleague about a child’s progress.

In a little more than an hour, more kids and their families will arrive for Math Night. Their ticket to admission (and free dinner) is to look at some science project displays around the school and fill out an answer sheet about what they learned.

After hours of games that make math fun, students and their families head home at about 7:30 p.m.

It’s just another round-the-clock day at one of Syracuse’s Say Yes to Education buildings, where the term “community school” is the real deal. Tomorrow’s before-school programming starts at 7:15 a.m.

The extended day, extended year — extended everything — is a big part of the Say Yes to Education private foundation that has taken Syracuse schools under its wing.

At the heart of this pioneering program are two core components:

• A system that provides pre-K-12 kids and their families with intensive support — from extra tutoring to health services to pro bono legal advice — to help them succeed academically and graduate from high school, and …
• The ultimate commitment: the promise of free college tuition, fees and books for any student who earns acceptance to one of the participating public and private colleges.

Say Yes has succeeded with small groups of kids in select cities, but Syracuse is the first in the nation to launch it districtwide.

Dollars and a dream

Wall Street financier George Weiss founded Say Yes to Education in 1987 when he promised 112 economically disadvantaged sixth-graders in Philadelphia that he would pay for their college education if they graduated from high school.

Of the pilot group, 63 percent graduated from high school; about 39 percent received a post-secondary credential. (Just a year before, only 26 percent of the Philadelphia class finished high school.)

Since then, the philanthropic program has spread to several cities with selected groups of students in Cambridge, Mass., Hartford, Conn., and Harlem.

Say Yes has begun working with younger groups, offering an increasing array of support services — after-school programs, summer camps, mentoring, tutoring and other social, mental and health care programs students need to succeed.

After all, how can children concentrate on schoolwork if their family is getting evicted from their apartment, or if one of their siblings misses class because an asthma attack sent her to the emergency room?

The results have only improved, as Say Yes has modified the program to start earlier in a child’s life.

“We’ve learned that the earlier you start, the better the results,” said Say Yes President Mary Anne Schmitt-Carey. “In fact, we are convinced that our kindergarten cohorts have a good shot at leveling the playing field completely.”

The district is implementing the program gradually, adding several buildings per year, until 2011-12, when it’s operating in all 36 schools and serving Syracuse’s more than 20,000 students.

The higher education guarantee is open to all seniors who have spent the last three years in the district — and hundreds of students will go to a college in September.

“This is an extremely exciting and promising venture, demonstrating what’s possible when there’s true collaboration. NYSUT is proud to support STA in this endeavor,” said NYSUT president Dick Iannuzzi. He joined officials from the union’s two national affiliates on a recent Say Yes Labor-Management Day tour.

“This child-centered community school approach underscores the fact we must do much more than provide academic support,” he said. “We must tackle our students’ emotional, social and health care needs, too.”

The Syracuse effort is groundbreaking, he said, because it is a collaborative effort among teachers, support personnel, district administrators, city and state officials, the higher education community, local businesses, community groups and the private foundation.

“I believe you will get results because the plan will change the system for every child in Syracuse,” said National Education Association President Dennis Van Roekel. “I want this to work because I want there to be a model for every child.”

The American Federation of Teachers, led by Randi Weingarten, has made community schools a top initiative for reform.

“This program offers a wonderful vision of what it can look like,” said Joan Devlin, who heads AFT’s education issues department.

Union buy-in

“Since Day One, the Syracuse Teachers Association has been supportive and included at the table every step of the way,” Schmitt-Carey said. “The union really helped pave the way to make it happen.”

Collaboration, though a nice word, is hard work, said Syracuse TA President Anne Marie Voutsinas. “We all just want to do what’s best for the kids.”

Despite “bumps along the road” in the first year of implementation, negotiations have yielded some landmark arrangements, including an urban teacher calendar that compensates educators for extended hours during the school day and school year, and more time for professional development.

This summer, six Say Yes elementary schools will offer five-week academic enrichment programs. Instruction will be provided by teachers in the morning; college students will serve as “camp counselors” in the afternoon.

The union negotiated a provision to provide flex time for social workers and make them 11-month employees.

This made it possible for Say Yes to add a social worker in every building so individual caseloads would be fewer than 200 students. Organizers worked with the union to build in time for home visits by social workers.

Funding comes through a mix of local, state, private and foundation sources. More federal funding is possible since community schools are supported by the Obama administration.

Schmitt-Carey wants to make the program self-sufficient within six years. While the program’s extra support comes to about $3,500 per child per year, urban school districts typically spend $10,000 to $14,000 per pupil annually using state and federal funding for after-school, summer and mental health programs.

“The trick is to spend the money as effectively as possible,” she said. “We identify gaps and raise money.”

Thus far it’s a bit more private money than originally envisioned, Schmitt-Carey said, “But we have faith there will be future funding.”

So far, 24 private colleges and universities will provide scholarships to eligible graduates. SUNY and CUNY campuses are taking part with help from $1.5 million in community foundation funds.

Participating colleges require students to first tap all financial aid avenues, and some colleges require a $75,000 income cap.

Aside from providing scholarships, Syracuse University President Nancy Cantor is providing extensive technical assistance through SU’s Education Department faculty and students.

Say Yes has already prompted more families to move back to the city, according to Syracuse Superintendent Dan Lowengard.

“For sale” signs in the city now include the “Say Yes” logo as a visible reminder that things are changing in this city, where fewer than half the students graduate from high school and more than 78 percent qualify for subsidized school lunches.

“We knew we had to do something dramatic to change the entire system, not just tinkering,” Voutsinas said. “We knew we had to give our kids something big. It’s called hope.”

Port Authority Chief Fires Back at Mayor; For First Time, Names the Names of Projects Sacrificed to WTC Financing

By Eliot Brown

The Port Authority’s executive director swung back Thursday morning against attacks from Mayor Bloomberg, painting a picture of his agency as a cash-poor entity that already must scale back and scrap major projects including a major renovation at LaGuardia airport and a new midtown bus garage.

Earlier this week, the mayor went on the offensive against the Port Authority, attempting to have it back the financing for two private office towers at the World Trade Center. The move is demanded by private developer Larry Silverstein, who says the Port Authority has a responsibility to allow him to build now because of its own delays.

At a breakfast forum in the new Newsweek building (where the New York and Vicinity Carpenters Labor Management Corporation has its offices), Chris Ward, the agency’s executive director, told the union-backed Business and Labor Coalition of New York that the recession has caused the agency’s infrastructure spending to shrink by billions over the next decade. The implication was clear: Any more money devoted to the World Trade Center already committed—he put the price tag at $12 billion—will mean more cuts elsewhere.

“We had $29 billion and now we’re down to effectively a $25.5 billion plan,” he said. “I can tick off to you the things we’re not doing. And you can take that $12 billion I’m describing for downtown, and we get to an understanding of the implications for this region.

“We’re not rebuilding LaGuardia; we’re not doing the new Delta terminal at Kennedy Airport; we’re not expanding Stewart Airport; we are not redoing the Goethals Bridge. We are not doing those. We have no money in our budget right now for the Bayonne Bridge; we are not building an auxiliary bus garage in midtown Manhattan.”

The long list of cuts hadn’t been made public or even approved yet—the Port Authority’s 10-year capital budget isn’t up for a revision until December—so one probably can’t treat Mr. Ward’s word with finality (the governors of New York and New Jersey make the final calls on these matters). But, based on what he said, it seems the Port Authority has cut out of its spending plan almost any expansion or anything new other than the money toward the World Trade Center and the $3 billion for the new New Jersey Transit tunnel under the Hudson River, a priority for Governor Corzine. The LaGuardia project, for instance, envisioned a redo of the Central Terminal Building at the airport, and, at least until the recession, the agency had $1 billion in its capital budget for it.

With that said, it’s important to note that this comes in the context of a heated negotiation—or battle, as it seems—between the Port Authority and the city over whether or not the agency should back the financing of Mr. Silverstein’s towers, which have no private tenants.

Update 3:25 p.m.

Here’s the Port Authority’s latest capital budget, updated a year-and-a-half ago. The plan, at the time, was sized at $29.5 billion, with $8.4 billion for the World Trade Center. Last fall, the agency acknowledged it would need about another $2 billion to cover cost overruns on its delayed projects, bringing the total over $10 billion. Like some of the other numbers and projects mentioned here, the $12 billion figure Mr. Ward used doesn’t appear to have been approved by the agency’s board, in which case it’s no done deal and presumably includes some of the money the Port Authority would put up Mr. Silverstein’s Tower 4 as part of his financing counterproposal.

A MESSAGE FROM NYSUT TO THE NYS LEGISLATURE

From Alan B. Lubin, Executive Vice President

This correspondence is to reiterate and clarify NYSUT’s position regarding the agreement between the Governor and various other statewide unions, as well as the potential impact of this agreement as it may apply to the public pension benefits available to all future public employees.

NYSUT has and will continue to support the lawful right of all unions to collectively bargain the terms and conditions of employment on behalf of their members. Moreover, in terms of bargaining, NYSUT recognizes that all unions and workers differ fundamentally in terms of who their public employer is, the nature of the services that they provide, for whom those services are rendered and the statutory and/or other qualifications necessary for rendering those services.
NYSUT does not support the imposition of negotiated changes on unions that are not parties to the agreement.

Read Alan Lubin’s complete letter: NYSUT

Roads, Bridges, Tunnels, and Fiber: BALCONY Hosts June 18th Forum Featuring Port Authority Executive Director Chris Ward

BALCONY will host a June 18th Breakfast Forum featuring a keynote speech by Port Authority Executive Director Chris Ward. Ward will describe and discuss the capital plan that the Port Authority of New York and New Jersey is currently implementing. This will be followed by a panel discussion on the Port Authority plan and other infrastructure initiatives, including a report from the New York State Commission on State Asset Maximization, the impact of the federal stimulus on New York and a status update on other state-of-the-art technological infrastructure initiatives previously championed by BALCONY.

Confirmed panelists for the discussion include BALCONY Executive Board member Dr. James Melius, Administrator of NYS-LECET (the New York State Laborers-Employers Cooperation and Education Trust), and Samara Barend, the Executive Director of the New York State Commission on State Asset Maximization. Other panelists will include Robert Ledwith, the Business Manager and Financial Secretary/Treasurer of Local 46 Metallic Lathers and Reinforcing Ironworkers; Brian Osterhout, the Director of Business Development for MJ Engineering and Land Surveying; Chris Levandos, Executive Director of Operations for Verizon; and Stephen McInnis, Political Director of the NYC District Council of Carpenters. The event will be chaired by BALCONY Director Lou Gordon.

“Infrastructure Investment is the most direct way to begin easing the economic plight of our state by generating good paying jobs and, at the same time, investing in our long term economic growth by developing infrastructure to support that growth,” stated Dr. James Melius, President of the New York Roadway Improvement Coalition .

This forum will be held at 395 Hudson Street (at Houston) in the offices of the New York and Vicinity Carpenters Labor Management Corporation. The registration and breakfast will begin at 8:00 A.M., and the keynote speech will commence at 8:30 AM, followed by the panel discussion. The event should end by 10:00 A.M.

The BALCONY Roads, Bridges, Tunnels, and Fiber Forum is sponsored by the New York State United Teachers, Verizon, the Greater New York Chamber of Commerce, the New York and Vicinity Labor Management Corporation, Professional Women in Construction, the Women Builders Council, the New York State Laborers-Employers Cooperation and Education Trust, and Local 46 Labor Management Cooperative Trust.

BALCONY has worked to find common ground between small business, labor, and advocacy groups since its inception in 2006, and has contributed policy suggestions for affordable health care coverage for all New Yorkers, for infrastructure and mass transit initiatives, and for “greening” the small business economy of New York State.

BALCONY & American Cancer Society Urge Albany: Back Health Insurance for Thousands of Young Adults Community Rating should be preserved! Extend COBRA to 36 Months.

Now is the time for Albany to step up on Health Reform.
Help young people get access to health insurance.

Assembly A 8401 Senate 5469: Summary and Information

On October 27, 2008, BALCONY, AMERICAN CANCER SOCIETY, DEMOS, FREELANCERS UNION and NYU WAGNER ALUMNI ASSOCIATION held a special forum on the plight of uninsured New Yorkers in their 20′s — a group that includes more than 800,000 people, many of them working and/or living in New York without health insurance.

Read the bulletin: Health Care

New York City mayor: Don’t cap state property tax

by Joan Gralla

New York City Mayor Michael Bloomberg on Friday said he opposed the governor’s plan to cap property taxes because it was “undemocratic” and could require the city to pay for the extra costs that result.

Outside New York City, property taxes are the main way that counties, cities and towns raise money. If they can raise property taxes only 4 percent or less each year, the state likely will have to pay more of their budgets, and probably will siphon more of New York City’s tax dollars.

Bloomberg, an independent seeking a third term, on his weekly WOR radio show faulted some other cities for overpaying their workers, saying: “It’s going to become an obligation of the state, which means it’s going to become an obligation of the city.”

Every year New York City, whose economy powers the state, sends the state billions of dollars more in tax revenue than it gets back in aid.

Democratic Governor David Paterson says the property tax cap is needed to cut some of the nation’s highest rates which choke economic growth.

Also, banks’ wariness of real estate loans could lengthen the recession by imperiling job-creating construction projects.

A spokesman for the governor was not available for comment.

Bloomberg cited a range of problems with a plan to improve Manhattan’s Pennsylvania Station by moving its entrance a block west to the James A. Farley Post Office.

Not only were multiple levels of federal and state approvals needed but the design was too complicated.

“You’d have to go through so many twists and turns underground; nobody would want to use it because it would take so long to get down to the track,” Bloomberg said.

Any improvements for the overcrowded transit hub might be limited to just opening up space at Cablevision’s (CVC.N) Madison Square Garden, which sits on top of the station, he said.

Spokesmen for two developers that planned a massive complex around the new Pennsylvania Station, Vornado Realty Trust (VNO.N) and the Related Companies, were not available.

by James M. Odato and Rick Karlin, Capitol bureau

ALBANY — Gov. David Paterson and public employee unions are closing in on a deal to avoid the governor’s proposed 8,700 layoffs. Under the preliminary plan, the state would provide $20,000 “buyouts” to workers who voluntarily leave the payroll, people briefed on details said Wednesday.

The deal, the subject of serious discussions in recent days, calls for the unions to endorse a new pension package — the governor’s proposed Tier V — with more modest benefits terms than those available for decades to public employees.

The deal calls for the governor to drop his layoff plan. But the departures would have to take place this year.

Officials with the Civil Service Employees Association and the Public Employees Federation declined to discuss the deal, and the governor’s spokesmen would not take questions on it.

People briefed on details, however, said momentum for the deal has been building for days, and an announcement appeared imminent on a resolution to the layoff plan. But talks lost steam after news circulated Wednesday that the governor had vetoed a bill to extend expanded pension benefits for newly hired cops and firefighters.

The buyout offer would be for workers eligible for retirement, according to the people briefed, but details were still being sewn together. Initially, the deal would be an expense rather than a savings for the state. The costs could mount, into the tens of millions of dollars, to pay for the buyouts of almost 7,000 workers.

Savings from a Tier V package wouldn’t be realized for several years. Nevertheless, Paterson would be able to boast that he accomplished a major pension change that no other governor could produce.

Paterson accomplished something along those lines Tuesday when he vetoed a generous but costly police and fire pension bill that critics called a symbol of the state’s profligate spending.

The veto came without fanfare and took many in the Capitol by surprise. Noting that “state and localities are hemorrhaging revenue at an alarming rate,” Paterson vetoed a measure — identical to one approved by lawmakers and signed by the governor every year since 1981 — that allowed police and firefighters to continue collecting a more generous pension even as other public employees saw their benefits reduced.

The veto could put police and firefighters on the same footing as other public workers. Currently, so-called “uniformed” workers can retire with half-pay after 20 years of service. Although other state employees also can retire in 20 years under the system, they receive less of a payout, around 40 percent of pay.

Only future hires are covered in the veto, which has no impact on anyone now employed in the public sector.Labor advocates weren’t happy: “I’m kind of puzzled more than anything,” said state Sen. Diane Savino, D-New York City, who co-sponsored the bill extending the fire and police benefit. “This is something you would think the governor would have let us know. … If they’re using this as a bargaining (tool), this is not the way to do it.”

Budget watchdogs hailed Paterson’s veto for breaking what they described as a woeful tradition that favored powerful unions but shortchanged taxpayers.

The veto “is sending a really strong statement,” said Elizabeth Lynam, deputy research director at the Citizens Budget Commission, which studies state spending.

“Gov. Paterson made a gutsy decision,” agreed New York City Mayor Michael Bloomberg.

The higher police and fire benefits force municipalities to put about 15 percent of their payroll toward retirement costs, compared to 7.5 percent for other municipal jobs.

As of March 2008, the average person enrolled in the police and fire pension program earned $88,440, while the average pensioner collected $37,030, according to data from the state comptroller.

Paterson’s veto could be overridden if two-thirds of lawmakers in each chamber vote against him. But that could draw the Legislature into a potentially bruising and high-profile discussion of the state’s growing public employee cost, and the influence that police and fire unions wield over the Assembly and Senate.

Moreover, the veto is a concrete move in a legislative session that’s seen numerous calls for caps on spending as well as property taxes — pleas that have been met with indifference in the Legislature.

James M. Odato can be reached at 454-5083 or jodato@timesunion.com; Rick Karlin can be reached at 454-5758 or rkarlin@timesunion.com.

State pension tiers

New York’s pension system for public workers has changed over the years. Current workers can fall into one of four “tiers,” with benefits dropping from first to last. The tiers are based on the hire date of a worker:

Tier I: before July 1 1973

Tier II: July 1, 1973-July 26, 1976

Tier III: July 27, 1976-Aug. 31, 1983

Tier IV: Sept.1 1983

Police officers and firefighters fall into Tier I or II regardless of their hire date.

Source: Office of the Comptroller