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New York Governor Plans to Tweak Legislation Relating to Binding Arbitration Agreements for Municipalities

Monday, April, 29, 2013


In an effort to reduce the fiscal problems of a lot of struggling small municipalities, New York Governor Andrew Cuomo is hoping to tweak a bill regarding binding arbitration for situations in which municipalities have contract negotiation stalemates with local police and fire unions.  The changes he hopes to incorporate when the current law expires in June is the opportunity for a municipality’s fiscal situation to be considered before the arbitrator makes a final ruling.  

In a statement in a Manhattan news conference held this past Thursday, Cuomo said, “We have to restructure those local governments so they’re financially solvent.  I have not wanted to subsidize the problem; I actually want to solve the problem.  I’m not going to facilitate the continued insolvency by giving them an annual subsidy so they go from hand to mouth.”

In the newly proposed legislation, the governor plans to include requirements forcing arbitrators to consider a municipality’s “ability to pay” before making a decision regarding awarding pay increases for unionized workers.  He also plans to impose a 2 percent cap on raises if the municipality in question is in a state of being financially distressed.

“Local governments that are in financial distress can come before the board, and this board will work with them to restructure the government so it’s economically viable,” Cuomo stated, “and part of that would be working out the contract with their police and fire department.”  Cuomo reminded mayors of local towns that balancing a municipality’s budget should be first and foremost on their list.  This act of balancing could include moves such as mergers, consolidations and service agreements that are shared between nearby municipalities.  “It’s going to be that kind of outside the box thinking,” Cuomo said.  “And it’s hard, and it makes people uncomfortable, but the status quo doesn’t work.”