1 THE CALL FOR MANDATE RELIEF

2 NEED FOR REFORM NYS Property Taxes Among the Highest in the Nation- 79% above the national average Property Tax levies grew at more than double inflation rate Salaries and Benefits of state employees add up to $18.5 billion, 1/5 of New York’s operating budget NYS rated #50 in terms of business friendly climate of all states in U.S. Key cost drivers are mandated by Albany

3 KEY COST DRIVERS NYS Teacher Pension fund: $900 million in 2010 will rise to $4.5 billion by Projected increase = 18% of current school tax levy State and Local Employee Pension fund contributions: Expected to double over next 5 years- additional $4 billion to taxpayers

4 KEY COST DRIVERS Healthcare costs for NYS employees and retirees have more than doubled in past decade Healthcare costs for NYS employees in $3 billion Healthcare costs for NYS employees expected to grow $300-$400 million per year

5 KEY COST DRIVERS “ In all, the salaries and benefits of state employees add up to $18.5 billion, or a fifth of New York’s operating budget. Unless those costs are reined in, New York will find itself unable to provide even essential services. “ NY Times- March 5, 2011

6 NYS Public Sector Salaries vs. Private Sector Region Private Sector Avg. Salary Public Sector Avg. Salary Difference All Upstate $42,978 $47,036 10% Capital District $39,370 $44,939 14% Mid-Hudson $50,311 $53,445 6% Long Island $39,574 $57, % Sources: Quarterly Census of Employment and Wages; American Community Survey

7 KEY COST DRIVERS- WESTCHESTER COUNTY Average Cost of County Employee 2010: $110, 000 for salary and benefits Average Cost of County Employee 2011: $117, 000 for salary and benefits Benefits rise to 55% of salary in 2011

8 KEY COST DRIVERS- WESTCHESTER COUNTY Health Insurance Costs for County Employees: $82.0 million $111.0 million $117 million including 12% reduction in staff 0% contribution by contract employees

9 KEY COST DRIVERS- WESTCHESTER COUNTY Pension costs for County employees: $46.5 million $56.7 million $106.5 million

10 Westchester County-Comparative Study Westchester County, NY Fairfax County, VA Levels of gov’t County, 6 cities, 17 towns, 22 villages County or City School districts 40 public school districts1 school district-includes nation’s highest publicly rated high school School superintendents One per district-one district of 1500 students and $43.5 million budget pays $268, 000/yr 1 – oversees 164,000 students and budgets of $2.2 Billion- paid $268,000/yr. Emergency Services 58 fire depts., 42 ambulance services, county plus 42 local police dept. One fire/rescue dept. with 37 stations and a chief Property taxes on $1 million house $30,007$6,979

11 PREVIOUS MANDATE RELIEF EFFORTS 1/5/11-Governor Cuomo issues Executive Order No. 6 forming Mandate Relief Team (MRT) 1/7/11-Team conference call with Governor 1/19/11 and 2/14/11- Team meetings in Albany 3/01/11- Preliminary Report Issued

12 WESTCHESTER MRT REFORM RECOMMENDATIONS No New Unfunded Mandates Reinstate Legislatively 3% Pension Contribution for Tier 3 and Tier 4 employees Independent Review of impacts of mandates Regional Collective Bargaining Empower local governments and school districts Incentivize best practices

13 WESTCHESTER MRT REFORM RECOMMENDATIONS- cont’d. Support the recommendations of NYCOM and Empire Center for NYS Policy: Temporary Freeze on Public Sector Wages- Savings $200-$400 million Require public sector employees and retirees to contribute to healthcare Reform Triborough to no longer require step increases in absence of contract- Savings $140 million Require that “ability to pay” be primary consideration for arbitrated agreements

14 WESTCHESTER MRT REFORM RECOMMENDATIONS - cont’d. Support the recommendations of NYCOM and Empire Center for NYS Policy : Tighten the “performance of duty” disability standards for firemen and police Restructure pension plans for new hires as defined contribution plans Enhance management flexibility under civil service law

15 MANDATE RELIEF: WHERE ARE WE NOW?

16 WHERE ARE WE NOW? 2% Tax Levy Cap Signed into Law June 2010 Applies to all municipal and school districts in NY State except NYC Some exclusions for pension costs Override if 60% of school district voters approve

17 WHERE ARE WE NOW? Tax Cap Realities Give New Impetus to Mandate Relief Efforts Need to fund core services yet keep tax levy at 2% and satisfy mandate requirements proving difficult for municipalities and school districts

18 A Common Agenda for the Common Good

19 Coalition of Unlikely Partners LET NY WORK: A Common Agenda for the Common Good is a historic effort led by a coalition of prominent business, local government and educational organizations. Accomplishing the 6 mandate relief goals will help stabilize NY’s economy and provide a sense of security for all taxpayers.

20 Let NY Work Partners AGC- Assoc. of General Contractors The Business Council of NYS CANYS- Chamber Alliance of NY State The Council of School Superintendents Farm Bureau of New York State Lawsuit Reform Alliance of NY NFIB- National Federation of Independent Business

21 Let NY Work Partners NYCOM-NY Conference of Mayors NYSAR-NYS Assoc. of Realtors NYS School Boards Association Unshackle Upstate Westchester County Association

22 KEY LET NY WORK GOALS 1.Make the pension system predictable and affordable – The state should offer two retirement options to new employees – a reduced defined benefit plan or a new defined contribution plan that is controlled by the employees and does not unduly burden taxpayers. Similar to proposal by Governor Cuomo

23 KEY LET NY WORK GOALS 2. Redefine compulsory arbitration - A number of amendments are needed to the state's compulsory arbitration statute that will benefit local municipalities and taxpayers such as: defining the ability to pay; prohibiting consideration of non- compensation issues; limiting access to binding arbitration; and, adding transparency to the arbitration process.

24 KEY LET NY WORK GOALS 3. Reduce the costs of construction on public/private projects – The state should take steps to spur building and development such as: supporting alternative project delivery methods like design build; increasing the Wicks Law threshold across the state; enacting the Public Construction Savings Act; and making common sense changes to the antiquated Scaffold Law – no other State has a Wicks Law requirement

25 KEY LET NY WORK GOALS 4. Freeze step increases when contracts expire – Due to the state’s Triborough Amendment, public employees’ pay continues to increase under an expired contract, placing additional burdens on school districts and municipalities.

26 KEY LET NY WORK GOALS 5. Establish minimum health insurance contribution level for employees and retirees – Employers should cover no more than 85 percent of a single healthcare premium or 75 percent of a healthcare premium for families or retirees.

27 KEY LET NY WORK GOALS 6. Prohibit new unfunded mandates – The state should not impose any future mandates on municipalities, school districts and taxpayers. Enacting the Unfunded Mandate Reform Act and requiring a super-majority vote of the Legislature in order to impose new unfunded mandates will help avoid the state imposing new unfunded mandates on local governments and school districts.

28 LET NY WORK AGENDA Albany lawmakers have told local governments and school districts that they have to live within a real property tax cap We call on lawmakers to live up to their end of the bargain by relieving local governments and school districts of unnecessary and costly state mandates.

29 PROPOSED LEGISLATION As of 10/25/11

30 Make the Pension System Predictable and Affordable Make the Pension System Predictable and Affordable Retirement and Social Security Law Gov. Cuomo’s Tier VI plan was never introduced as a bill in 2011 A.2875 (Calhoun) –Established a commission to consider the following aspects related to the public pension system: a hybrid plan, defined contribution, tax payer relief, short and long term fiscal stability of pension funds A.5141 (Fitzpatrick) –New plan applies to non-civil service employees (elected officials and appointed employees) –Freezes the current tier for such employees and creates a defined contribution plan –Employers would contribute 3% and employees would elect to contribution between 3-100%

31 Make the Pension System Predictable and Affordable Make the Pension System Predictable and Affordable Retirement and Social Security Law A.7490 (Jordan) –New employees would have a defined contribution plan –Employees can elect investing organization from a list of approved investment companies or use state’s Trustee –Employees would contribution up to 100% of compensation –Employers would match contributions up to 3% –Transferability of contributions upon severing employment A.8447 (Kolb) –Creates a defined contribution plan to apply to new employees –Employers would contribute 8% for ERS/TRS and 10% for Police and Fire –Employee can contribute up to 10%

32 Redefine Compulsory Arbitration Redefine Compulsory Arbitration Civil Service Law §209 A.2282 (Schimminger) / S.2337 (Ranzenhofer) –Requires the panel to consider above all other factors the ability of a public employer to pay S.2493 (Ranzenhofer) –Requires the panel to consider the ability of a public employer to pay, impact to the taxpayers and other factors

33 Control the Costs of Construction on Public/Private Projects: Wick’s Law A.3106 (Calhoun) –Allows for PLA’s for school districts A.3263 (Schimminger) / S.4487 (Ranzenhofer) Creates a threshold statewide of $3 million for Wick’s –If the estimate cost of a projects if less than 10% of the threshold the minor contract can be folded into another contract for the purpose of increasing efficiency –Allows for single contracts – design build A.3682 (Galef) / S.699 (Saland) –Exempts schools from Wicks –Allows for design build A.8209 (Thiele) –Repeals Wick’s –Allows for separate contracts or single contracts

34 Control the Costs of Construction on Public/Private Projects: Wick’s Law- cont’d. A.8403 (Schimminger) – 6/15/11 Referred to education –Exempts Wicks –Allows schools options and flexibility for constructing new building A.8447 (Kolb) –Repeals Wicks (Part N) –Allows for PLAs (Part O) S.1586 (Oppenheiner) – –Allows for single contract –Exempts entire state to the NYC level for school’s requirement to comply with Wick’s S.3190-A (Ranzenhofer) – 5/4/11 Amended and recommitted to education –Exempts Wicks

35 Freeze Step Increase: The Triborough Amendment Freeze Step Increase: The Triborough Amendment Civil Service Law §209-a A.1329 (Castelli) –Repeals Triborough A.2664 (Pretlow) –Amends Taylor Law to avoid delay in the negotiations and impasse processes A.3569 (Pretlow) –Extends the terms of an expired agreement “as is” for the purpose of good faith negotiating during such period, no increase or decrease to salary or benefits for six months

36 Freeze Step Increase: The Triborough Amendment Freeze Step Increase: The Triborough Amendment Civil Service Law §209-a A.8115 (Castelli) –Suspends Triborough for two years –Calls upon the Mandate Relief Redesign Team to prepare a list of unfunded mandates imposed upon local governments and the associated costs, due to the Gov. and Leg. In 2 years A.8447 (Kolb) - Part E: Creates a local opt-out option for Triborough

37 Establish Minimum Health Insurance Contributions Level for Employees and Retirees Establish Minimum Health Insurance Contributions Level for Employees and Retirees General Municipal Law A.8447 (Kolb) – 6/15/11 Referred to local government –Requires that employer’s contribute no more than 90% for individual coverage –Requires that employer’s contribution no more than 75% for dependant coverage

38 NO NEW MANDATES Various Laws A.1592 (Galef) / S.3211 (Martins) A.8150 (Morelle) / S.5379 (Martins) A.8447 (Kolb) S.5858-A (Skelos) S.2736 (Saland) S.5568 (Martins)

39 MANDATE RELIEF: WE NEED “ROLAIDS” NOW! JOIN THE LET NEW YORK WORK FIGHT!