Gov. Paterson's Plan B: Let The Next Governor Lay Off State Workers

After a federal court rejected Gov. David Paterson's attempt to furlough state workers in order to close a massive state deficit, the New York Democrat looked about for a plan B.

He found it.

It's called passing the buck to the next governor. He figures that the solution for the current financial mess is to start firing state workers beginning in January 2011, when the next governor takes office but that is due in large part to deals made with various unions.

The reason for the delay: the hazy legal status of the "memorandum of understanding" his administration signed last summer with two of the largest state worker unions, CSEA and PEF. The agreement included a no-layoffs pledge through 2010 in exchange for the unions' support for a Tier V pension plan.

The unions argue the memo is a binding agreement; Paterson contends the state fiscal crisis and looming $9.2 billion deficit justifies amending it.

"I don't think the memorandum of understanding is one that could not be changed because of events not within the contemplation of the parties," Paterson said Tuesday at a Manhattan news conference, using legal phrasing appropriate to his recent dealings with union leaders.

"Everybody was saying that the economy would change by the third quarter of 2009. That didn't happen," Paterson said. " ... Obviously if the situation got worse, we would look at perhaps speeding up the (layoff) plan and challenging the memorandum of understanding. But the reality is right now it takes a long period of time to schedule the layoffs, so I want it ready to go on Jan. 1 so that the next governor has this option, should the next governor choose to use it."

Paterson's executive budget proposal included $250 million in state work force cuts. The larger public workers unions have adamantly resisted concessions talks. Instead, union leaders offered suggestions for less overtime and cutting non-union consultants under state contract.

The unions refuse to recognize the financial reality of the state's situation and continue to demand their cut regardless of how much it hurts the state's financial future.

Apparently $9 billion in deficits is not sufficient to get the unions to come to the table - or get the courts to realize that we are indeed talking about a financial emergency that requires furloughs to avoid major layoffs.

Now, we've got a situation where there are not only no furloughs, but no layoffs for the foreseeable future. That means that the state can't close the budget deficit through workplace efficiencies - leaving the door open to more tax hikes and fees to close the gaping deficit.