Teresi Urges Arbitration Reform

Mayor Sam Teresi called a recent push for reforms to binding arbitration a “golden opportunity.” That opportunity, however, may be lost with proposals from the state legislature that aim to extend the policy further without any hint of reforms.

In his State of the City address, Teresi spoke about the inherent unfairness of binding arbitration, a policy that only extends itself to police officers and firefighters. Currently, the legislative leaders from both parties in both houses have issued proposals to go beyond the traditional two-year arbitration extension period and instead renew the policy for four years, a move that Teresi calls “unconscionable.”

“If it’s such a valuable tool to promote harmonious labor relations throughout the state, then why is it restricted to two elements of the public workforce?” said Teresi. “There’s something rotten in Albany here, and it needs to be cleaned up and changed.”

Despite the fact that the Taylor Law, also known as the Public Employees Fair Employment Act, banned any member of the public workforce from striking in New York state starting in 1968, binding arbitration was created in 1974. The Taylor Law recognized the rights of public employees in New York to form unions to represent themselves, and that the government would recognize those unions as the collective bargaining agents for those individuals. In exchange, the public workforce gave up their right to strike. Provisions were also built into the Taylor Law that penalize public workers out on strike with the possibility of two days lost wages for every day on strike, decertification of their unions and jail time.

“The Taylor Law is one of the reasons that there wasn’t widespread labor unrest between 1968 and 1974,” said Teresi. “Binding arbitration didn’t make any sense in 1974 when it was introduced, and it makes even less sense today. It’s unnecessary, it’s damaging, and it’s one of the major things that is driving virtually all cities in New York state down a one-way road to insolvency.”

Peter Baynes, executive director of the New York Conference of Mayors, recently released a statement saying that a miniscule increase in AIM funding an a pension smoothing plan that may never be authorized are no substitute for fixing the out-of-control cost structure imposed on local governments through decades of arbitrary state mandates.

“A budget without mandate relief is a budget that raises local taxes,” said Baynes. “State legislators must protect local taxpayers and begin to secure a healthy financial future for New York by including reform of binding arbitration in the 2013-14 state budget.”

Teresi, echoing Baynes’ sentiments, said that instead of continually beating the drum and telling local governments what they already know – that New York state property taxes are too high – it’s high time that the legislative leaders start to do something constructive about addressing the problem.

“Giving us at the local level the authority and tools necessary to cut our cost structure by eliminating or substantially reforming the ridiculous binding arbitration system would be a step in the right direction.”

According to Teresi, both state Sen. Cathy Young and Assemblyman Andy Goodell, R-Chautauqua County, have expressed the belief in the past that the binding arbitration system needs to be allowed to expire. Teresi said that the two legislators also need to speak out in support of the governor’s proposal to begin the reform process and place a cap on the arbitration awards.

“If the leaders of our state Legislature lack the political courage and common sense to do what is right and allow binding arbitration to finally sunset on June 30, they should, at the very least, support Gov. Cuomo’s proposal to institute a 2 percent cap on arbitration awards levied against distressed local governments,” said Teresi. “This should be a no-brainer.”