Wednesday, November 3, 2010
CUOMO ON A COLLISION COURSE WITH UNIONS
By MICHAEL BARBARO
It was perhaps the most memorable line from Eliot Spitzer’s 2006 campaign for governor of New York, a pithy promise as well as a threat: “Day 1,” he declared, “everything changes.”
For Andrew M. Cuomo, it is not Day 1 that may define his tenure as chief executive, but Day 90. That is when two labor contracts will expire for thousands of government workers and Mr. Cuomo’s most important, distinctive and unexpected campaign pledge will face a test: Can he confront and outmaneuver the public-sector unions that have dominated politics and budgeting in Albany for decades?
Onstage Tuesday night at the Sheraton Hotel in Midtown Manhattan, as Mr. Cuomo basked in his decisive victory over the Republican Carl P. Paladino, he effusively thanked longtime allies from the labor movement, whose money and muscle have been instrumental in his political resurrection.
But at the same time, Mr. Cuomo has telegraphed a message to those union officials that is both grim and urgent: The state is broke, and the era of gold-plated labor contracts is over.
“There is a crisis,” he told union leaders throughout the campaign, according to people involved in the discussions. “You need to rise to the crisis.”
The intractable troubles afflicting Albany — the tragicomedy of the place, with its routinely indicted lawmakers, the $20,000 sushi bills and the debt-masking budget gimmicks — are all real and serious. But as the state faces an $8 billion deficit next year, the soaring cost of providing pensions, health care and wages for state workers is the long-term problem that most profoundly needs fixing, watchdogs and economists say.
A spin through some of the sobering figures: Out of an operating budget of $78.2 billion, the state spends about $11 billion on wages for its work force of 220,000. The cost of providing medical insurance for those employees will surge to $2.5 billion from $1.8 billion over the next three years.
By 2015, state pension costs — which are, by law, set in Albany and underwritten by Democratic and Republican administrations — will exceed $8 billion a year, compared with $2.6 billion last year, according to a state projection. At the same time, New York has promised more than $200 billion worth of health benefits to its retirees but has set aside almost nothing to pay for them.
In short, Mr. Cuomo argues, the public work force is on a collision course with the state’s taxpayers. “The salaries you are paying and the benefits you are paying are unsustainable,” he said recently. He has even encouraged business leaders to act as a greater counterweight to unions, encouraging them to, of all things, hire more lobbyists.
Perhaps nowhere else in the country, then, has a Democratic candidate for governor taken such a hard rhetorical line against such a potent constituency within his own party. (Across the Hudson River, Gov. Chris Christie of New Jersey has become a Republican folk hero and an attractive possible candidate for president by excoriating and defying public unions.)
Yet, so far Mr. Cuomo has been strategically vague about what he will actually do, and his options may be limited. By ruling out tax increases, as he has done repeatedly during the governor’s race, he has but three likely courses: sizable layoffs; a reduction in pension benefits for new employees; and a major restructuring of the work force, like the introduction of a 40-hour workweek (today, it is 37.5).
All three options are anathema to union leaders, who in interviews said that they trusted Mr. Cuomo and understood the state’s dire financial situation, but that they had no intention of giving anything away.
“His policy positions are not aligned with ours,” said Richard C. Iannuzzi, president of New York State United Teachers, which declined to endorse Mr. Cuomo.
Lillian Roberts, the executive director of District Council 37, a New York City union with thousands of state workers, was even less diplomatic. Mr. Cuomo, Ms. Roberts said recently, was trying to “put labor in its place,” and she warned that she was ready for a fight.
Public-sector labor leaders are especially inflamed by Mr. Cuomo’s willingness to consider replacing the state’s pension system with a defined contribution plan similar to a 401(k), potentially stripping public workers of a guaranteed stream of retirement income.
They grumble that Mr. Cuomo is biting the hand that fed him. Organized labor was crucial to his victory as attorney general in 2006, and it helped him again this year by nudging the incumbent, David A. Paterson, to drop out of the governor’s race.
But in private conversations, Mr. Cuomo had made a distinction: This time around, his support was drawn heavily — and deliberately, it seems — from private-sector unions, not those representing government workers. The strategy gives him not just the independence to take on government unions, but also the ability, he argues, to prevent the state’s unions from coalescing against him.
As Mr. Cuomo tackles the issue, he is likely to dismantle, in ways big or small, the legacy of his father, former Gov. Mario M. Cuomo, who significantly expanded the size of the state’s work force in the 1980s.
Over the past few weeks, the younger Mr. Cuomo has mailed union leaders a copy of “The Man Who Saved New York: Hugh Carey and the Great Fiscal Crisis of 1975,” which depicts how union leaders banded together in the 1970s to prevent New York City from filing for bankruptcy.
Not all the union leaders are rushing to read the book. “I will try to read it when I get some free time,” said Ken Brynien, president of the Public Employees Federation, which represents nearly 60,000 employees in New York, and backed Mr. Cuomo.
Edmund J. McMahon, the director of the Empire Center for New York State Policy, which studies the state’s finances, said that if Mr. Cuomo could push through the introduction of a 401(k)-style pension system, “it would be a real Nixon-goes-to-China moment for him.” The first Democratic governor in the country to do so, Mr. McMahon said, “would have a real future in national politics.”
Times story on Cuomo administration cites Carey bioDecember 16, 2010