Paterson announces 8,900 state layoffs
By Joseph Spector • Albany Bureau • March 25, 2009
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ALBANY - Gov. David Paterson announced yesterday plans to lay off 8,900 state workers amid a state budget deficit that has soared by an additional $2.2 billion because of a declining economy.
The decision by Paterson would likely hit every state agency that is under the governor's control, such as transportation workers, prison guards and nurses.
The layoffs represent nearly 5 percent of the state's roughly 200,000 workforce and are another blow to the state where new unemployment claims have reached a staggering 39,000 per week, an increase of more than 20,000 compared to a year ago.
In a memo to agency commissioners, Director of State Operations Dennis Whalen wrote that concessions from labor unions could not be reached, so layoffs will be needed.
Paterson had proposed that workers forego a planned 3 percent pay increase in April and a week's pay next year, as well as some pension and health-insurance cuts.
"Unfortunately, the labor organizations representing state employees have rejected all of the savings options put forward by the Paterson administration," Whalen wrote in a memo to agency heads. "As a result, the state is left with no other option to achieve needed savings other than implementing a workforce reduction plan."It's unclear what agencies would be affected most, but it will take several months to carry out the layoffs, officials said.
Also, it's unknown how many jobs can be eliminated through attrition, but most are expected to be layoffs, aides said. Each agency will have to submit a list of potential cuts.
State budget officials said the layoffs would save the state about $480 million over two years.
Agencies that are not under the governor's direct control - such as state colleges and universities as well as the attorney general's office, comptroller and public authorities - would not be affected. Of the 200,000 state jobs, 141,000 are under the governor's control.
Public-employee unions railed against the move. Unions have been battling Paterson over proposed health-care and education cuts in his 2009-10 budget proposal.
"We've been trying to give him the benefit of the doubt, but if Gov. Paterson really believes putting nearly 9,000 New Yorkers out of work is a good idea, he really is out of touch with life on Main Street," said CSEA President Danny Donohue.
Ken Brynien, president of the Public Employees Federation, said unions offered ways to cut the state's deficit, such as reducing the state's use of consultants and overtime costs.
"There is absolutely no need to do layoffs. It will not save the money that the governor thinks it will," he said. "PEF's position is clear and unchanged. We will not agree to any changes in our contract that reduce compensation."
Paterson's announcement came just hours after state officials announced the budget deficit grew by another $2.2 billion, bringing the funding gap to an unprecedented $16.2 billion.
Paterson and legislative leaders said the state's weak economy is lowering revenue projections for the 2009-10 fiscal year, which starts April 1.
The loss of additional revenue complicates leaders' efforts to pass a state budget by the April 1 deadline.
"I will take whatever actions are necessary to get our fiscal house in order and eliminate this deficit," Paterson said in a statement.
Paterson, whose popularity is at record lows in recent polls, did not take questions from the media after his only public event yesterday at the Capitol.
E.J. McMahon, director of the Manhattan Institute's Empire Center for New York State Policy, said the layoffs are an appropriate step but should have been started earlier in the year. He said layoffs would need to be conducted by seniority, so the newest workers would be the first to lose their jobs.
"If he was going to seriously threaten this, the machinery should have been in motion by the beginning of the year," McMahon said. "Now it just sort of comes out of the blue."
Legislative leaders and Paterson met behind closed doors again yesterday for budget talks.
The growing deficit and the layoffs add to the likelihood that lawmakers and Paterson may decide to increase income taxes on the wealthy, a move sought by the unions and education groups.
Assembly Speaker Sheldon Silver, D-Manhattan, ruled out increasing the state's 4 percent sales tax.
"I would not consider it," he said of increasing sales taxes, calling it a "regressive tax."
State officials attribute New York's budget woes largely to declining tax revenues.
The state is receiving less in personal income taxes due to job losses, less in sales tax due to declining consumption and fewer business taxes, officials said.
Another factor is a loss of $370 million in revenue after a deal faltered to install video-lottery terminals at Aqueduct Racetrack.
Cara Matthews and Jay Gallagher of the Albany Bureau contributed to this report.
