Arbitration Reform Must Be In Budget

Forty-three years ago, Jamestown was a city of 41,818 people that spent roughly 8.3 percent of its budget on police and fire protection. Now, Jamestown is a city of 31,146 that spends nearly 55 percent of its budget on police and fire protection.

There are dozens of reason for such growth in police and fire department budgets, not the least of which is the existence of binding arbitration for public safety unions. Binding arbitration is the final say in a public safety union’s contract when a union and municipality reach a point where negotiations simply won’t result in a contract. If mediation doesn’t result in a contract, a three-member arbitration panel – one person for the union, one person for the municipality and an impartial third party – hears the case and decides the contract.

It sounds fair in theory. It’s unfair in practice.

Take, for example, the city of Glens Falls, which finds itself in much the same position as Jamestown and which recently received its binding arbitration results from a three-member Public Employee Relations Board panel. In exchange for an increase in the amount Glens Falls police officers will pay for their health insurance, police officers were awarded a 13 percent pay raise over three years, with the city to pay all retiree health insurance premiums for any new retirees starting in 2014.

If a union can get that type of reward for going to arbitration, what is the incentive to negotiate in good faith?

That is the question Gov. Andrew Cuomo tried to answer with his binding arbitration reform proposal that municipalities found to be in fiscal distress would not be allowed to increase the union’s total compensation package by more than 2 percent a year. The limit would have applied to all pay and benefits except for pensions and the first 2 percent increase in health insurance costs.

While the state budget isn’t quite finished, binding arbitration reform seems too rich for the state Legislature’s blood. Neither the state Assembly or Senate included Cuomo’s proposal in their one-house budgets, opting instead to continue binding arbitration unchanged for another four years.

As the population of New York’s municipalities continues to shrink, municipalities must have the ability to cut the cost of public safety, whether it’s by cutting staff or by holding the line on pay increases. Such decisions are better made by local elected officials than by appointed panel members who don’t have to live with the decisions they render.

Arbitration reform should be part of the state budget when it is passed this week. Cuomo’s binding arbitration reform doesn’t go nearly far enough to fix such a broken system, but a half-step is better than no step at all.