Empire Center and Lawyers: Pay Freeze Would be Legal

by RICK KARLIN Capital Confidential
First published in print: Monday, May 3, 2010, 12:00 PM

E.J. McMahon and his Empire Center for New York State Policy put out a steady stream of releases but they don’t normally hold a lot of press conferences. They did today, though, to promote the idea of an across-the-board public sector pay freeze.

They went out and hired a lawyer, Terry O’Neil of Bond Schoeneck & King’s Garden City, Long Island office, who researched the issue and concluded that if the Legislature were essentially to declare a financial emergency, they could pass enact a temporary prospective pay freeze for all public employees.

The obvious question is why would the Legislature, famously beholden to public employee unions, do that?

O’Neil believes public sentiment would be behind such a move, given the economic wreckage that has swept through the private sector.

Basically, he contends that freezing public sector wages would be popular enough with the electorate that it could outweigh the inevitable backlash from public employees.

He says he’s seen that dynamic at work with several Long Island school districts where teachers and other employees have given up raises this year. O’Neil, who works for districts and municipalities, says he presents the givebacks as an alternative to the heavy layoffs that could result if voters, angered at steep tax hikes and raises, vote down local school budgets.

Here’s the legal opinion that O’Neil drew up for Empire Center, go to the next page for the Center’s release:

The state Legislature has the power to impose a temporary freeze on the collectively bargained wages and “step” increments of public employees in New York to help deal with a severe fiscal crisis, according to a legal opinion released today by the Empire Center for New York State Policy.

“Temporary wage freezes are lawful under New York and Federal law provided they are supported with appropriate legislative findings and tailored in a reasonable manner to protect the public,” concludes the opinion written by Terry O’Neil and Howard Miller, partners at the law firm of Bond, Schoeneck & King, PLLC.

O’Neil and Miller cite federal and state court decisions upholding wage freezes in New York City, Yonkers and Buffalo, all imposed with legislative authorizations by state- created financial control boards. In another case, a federal court upheld a furlough in Baltimore, Md.

“In short, a court reviewing a statutory wage freeze will likely defer to legislative findings of a fiscal emergency,” they write. “If it can be shown that other less intrusive interventions were tried without success to protect the public, the Legislation will be upheld.”

The opinion notes that the state has already sought unsuccessfully to deal with its financial problems by increasing taxes, cutting aid to school districts and municipalities, delaying income tax refunds, postponing payments to school districts and temporarily halting highway construction funds as the construction season began.

A freeze on all public-sector wages at the state, local and school district level would save at least $1.6 billion in 2010-11 fiscal years, growing to over $2 billion by 2013, according to the Empire Center’s recent report, Blueprint for a Better Budget. A wage freeze would more than offset the property tax increases that most school districts have proposed for 2010-11, according to E.J. McMahon, director of the Empire Center.

“A freeze can’t completely prevent layoffs, but it’s a way of preserving jobs and public services that would otherwise be jeopardized as a result of aid cuts that are now absolutely essential to balance the state budget,” McMahon said.

O’Neil, a nationally recognized expert in labor law, is co-author of the 2007 Empire Center report, Taylor Made: The Cost and Consequences of New York’s Public-Sector Labor. Miller specializes in employment and education law. The Albany-based Empire Center is a project of the Manhattan Institute for Policy Research, one of the nation’s leading non-profit think tanks.

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About Kari

I live in the Capital Region of NY, work for NYS, and am just beginning to blog. I was recently diagnosed with Fibromyalgia, so that's going to take up some content. I've been writing for as long as I can remember, and I am an opinionated person. Thus there will be some items that burn me up, that I simply want to play devil's advocate, or daily/personal items. I also Tweet (@Marilyth) when the mood strikes me in 140 characters or less. I'm doing this for fun, and I hope other appreciate the information and contribute!
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