January 28, 2009
Using federal $ to protect NY government raises
The economic stimulus package winding its way through Congress will subsidize salaries of unionized state and local employees in New York, "but won't do a thing for the economy," the Empire Center's E.J. McMahon writes today in NY Fiscal Watch.
He says the increased federal funding to New York, where Governor David Paterson has proposed 521 layoffs out of a workforce of nearly 240,000 employees, "will serve mainly to support increases in already generous pay and benefits for unionized public-sector employees."
For example, roughly $4 billion in stimulus aid will flow over the next two years to New York's K-12 public schools, where teachers are receiving average salary hikes of 4.2% in their most recent contracts, on top of gold-plated benefit packages whose costs are more rapidly escalating. The new federal money will simply relieve any pressure teachers' unions might otherwise have felt to renegotiate or reopen their contracts. And when the stimulus money runs out in two years, the hole for taxpayers will be that much deeper.
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