A third round of delayed pay increases for roughly 80,000 government workers has raised questions about how the state will close its estimated $14 billion budget gap absent further federal relief and without raising taxes.
Pay raises scheduled for April, July, and September will be delayed another 90 days, after which the state will reassess whether they can be implemented, Freeman Klopott of the Division of the Budget told the Times Union in a statement.
COVID-19-related lockdowns have added to steep losses in tax collections and state revenues.
“The governor’s action is the bare minimum,” Ken Girardin, a fellow and director of strategic initiatives at the Empire Center, told The Center Square by email. “The unions have generally bet that the federal government will bail out New York with massive amounts of unrestricted cash.”
The state has not renewed service contracts and instituted a hiring freeze. But it has not been enough to curb the deficit.
“The raises are increasing the deficits faced by the state and its local governments and school districts,” Girardin said. “That increases the likelihood of service cuts and tax increases.”
A legislative proposal to reduce the deficit with retirement buyouts for state and other public sector employees has not progressed, the Times Union reported.
Mass employee layoffs have so far been avoided but may be on the table with no federal bailout.
There are other options to address the deficit, Girardin said.
“The governor and the legislature should work together to enact a statutory pay freeze that will stand up in court and provide savings for both state agencies and municipalities. What’s happening right now is even less than a half-measure because state taxpayers could remain on the hook to pay the raises.”
The Civil Service Employees Association noted in a news release that it has filed a class-action grievance with the Governor’s Office of Employee Relations challenging the delays. According to the Times Union, the raise deferments have not applied to the governor and other high-ranking state officials.