By Ken Girardin

Fellow, Empire Center for Public Policy

The size and composition of state and local workforces is a major contributor to the exceptionally high cost of New York’s public sector. The fiscal challenges faced by state and local governments, along with many operational challenges, stem directly from made-in-Albany public employment policies.

New York has more state and local government employees per capita (55 per 1,000 residents) than any other large state, and more than the nationwide average (45 per 1,000), as shown in Figure 1. In 2021, about 1.2 million of payroll jobs in New York—one in every seven—were in state and local government.1Quarterly Census of Employment and Wages, U.S. Bureau of Labor Statistics About half of these public employees work for one of three entities: the City of New York, the State of New York, or the Metropolitan Transportation Authority (MTA). Measured by program category, public elementary and secondary schools accounted for close to half of New York’s public payroll jobs (504,000).

The rules around public employment affect more than just the cost or quality of services. Organized labor’s political power in New York is rooted in extensive unionization of the public sector, both in isolation and as a share of the total.

Twenty-four percent of all public and private payroll jobs in New York were covered by collective bargaining agreements in 2021—more than all but one state, and double the national union coverage rate of roughly 12 percent.2New York’s sole union coverage rival among all states was Hawaii, whose travel and leisure sector is heavily unionized. Hawaii’s union coverage rate of 24.1 percent was statistically indistinguishable from New York’s 24 percent. Fully half of New York’s unionized jobs were in the public sector, including many middle-management and supervisory titles.

Nearly 71 percent of all public-sector jobs in New York were unionized, more than double the national median of 28 percent. The resulting flow of taxpayer-supported union dues nourishes a political apparat­us that champions both increased government spending and expanded intervention in the private economy. But this situation is not irreversible. Legislative and administrative remedies exist that would allow New York’s governor to meaningfully reduce both the cost of government—and labor’s stranglehold on the Empire State.

THE STATUS QUO

Personnel costs are the single biggest expense at nearly every level of government—with the exception of the state government, whose operating expenditures consist largely of support for Medicaid and aid to school districts (which, in turn, spend mostly on salaries and benefits). For local governments outside New York City, the average share of expenditures covering employee wages, salaries and benefits range from just over one-third for counties to nearly two-thirds of total budgets for school districts (Table 1).

Subject to federal and state mandates, local officials get to decide how much they spend for services, but the bang-for-buck quotient is ultimately shaped by the state Civil Service Law, including provisions governing unionization and collective bargaining law.

The New York State Constitution requires most government jobs be assigned based on “merit and fitness,”3NYS Constitution, Article V, Section 6 underpinning civil service rules that require the use of written exams to measure qualifications, set hiring and layoff procedures, and give due-process rights in discipline matters. State civil service law applies to most employees of state agencies, public authorities, local governments, and school districts. K-12 teachers and administrators and state university professors are covered by separate but similar rules.

The civil service system, which dates to the late 19th century, has been slow to adapt to 20th and 21st century needs. Prior to major reforms under the Pataki administration in the 1990s, state agencies struggled to modify or eliminate positions without having to also lay off employees. More recently, the drawn-out hiring process complicated recruitment amid the tighter labor market as exam-takers moved on to other employment and would-be applicants were skeptical about taking a job from which they might be fired if three other people outperformed them on a future exam.

An appreciation of this system is necessary because it represents the baseline on which union agreements (discussed in detail below) are made. With few exceptions, New York public employees enjoy greater job security and safeguards than any of their private-sector peers–and this is without considering the protections that have been layered on top by union contracts.

Beyond pressing for more favorable contract terms, public employee unions are regularly pushing for advantageous changes to the civil service law. Because such changes raise the floor from which they negotiate. For instance, a 2020 proposal would have required almost any public employee facing discipline to be put on paid leave while charges were pending, unless the union contract required otherwise.

While the civil service law is a complex and important system, it does not affect public employment to nearly the same extent as the collective-bargaining regime the Legislature has grafted on top of it.

The Taylor Law

New York routinely ranks among the most unionized states, in no small part because of the size, and extensive unionization, of its public-sector workforce. Relative to population, as shown in Figure 2 below, New York has significantly more total state and local employees than any of the nation’s largest states, and is well above the national average.

Virtually all public school teachers, approximately 94 percent of New York state government employees,4New York State Workforce Management Report,” NYS Dept. of Civil Service, p.2. cs.ny.gov/businessuite/docs/workforceplans/2022.pdf and 95 percent of New York City employees5“FY 2019 New York City government Workforce Profile Report,” NYC DCAS, P.15. nyc.gov/assets/dcas/downloads/pdf/reports/workforce_provile_report_fy_2019.pdf are unionized, with nearly all the remaining workers in positions that make them ineligible. Police officers, corrections officers, and paid firefighters are almost universally unionized, as are the general municipal employees in most cities and counties. All told, about 71 percent of all public employees in New York are represented by a labor union.6Hirsch, Barry and David Macpherson, “Union Membership, Coverage, and Earnings from the CPS,” UnionStats.com

While federal law controls labor relations in the private sector, New York’s state and local public employees bargain under its public-sector collective bargaining law, the Taylor Law. (Most New York City employees are covered by the city’s own bargaining rules, with the city’s teachers being the most notable exception subject to the Taylor Law).

The difference between public- and private-sector union relations, particularly in New York, cannot be overstated. Public employee unions in many cases arrived at the bargaining table in the 1960s and 1970s far ahead of their private-sector peers, already enjoying job security, retiree healthcare, and defined-benefit pensions, among other things.

While the right of private-sector workers to form and join labor unions was guaranteed by the state constitution in 1938, New York State law over two decades following World War II did not establish any guidelines for dealing with the burgeoning union movement in government. It allowed managers to fire strikers, and stripped strikers of any tenure protections and barred them from getting any immediate financial benefit from the strike. This made settlements more difficult.

In 1958, then-Mayor Robert Wagner issued an executive order granting collective bargaining rights to New York City employees — although the order did not initially cover teachers, whose newly formed union won the same rights after staging a walkout in 1960.  The city’s crippling transit strike of 1966, staged by a union that had organized subway workers when much of the system was still privately controlled, was cited by Governor Rockefeller as justification for rethinking state laws on public-sector collective bargaining.

Under Rockefeller’s prodding, the Legislature in 1967 adopted the Public Employees’ Fair Employment Act (Article 14 of the Civil Service Law). The state’s previous draconian strike penalties were eased (though strikes remained illegal), and a system was created for holding elections and recognizing employee unions, requiring public employers to negotiate with them, and for resolving disputes. The law became known as the Taylor Law, after Wharton professor George Taylor, who helped craft it.

The Taylor Law obligates employers to deduct union dues from the paychecks of workers covered by union contracts.7CSL §208(1)(b) In recent years, these deductions have totaled about $700 million annually. The Taylor Law framers viewed dues privileges as a lucrative incentive to discourage strikes. The money collected under the Taylor Law feeds a continual cycle in which the unions use political influence (and money) to win more favorable provisions from the Legislature, which in turn gives them more influence and resources.

As explained below, instead of requiring employers to bargain specifically over wages and benefits, the Taylor Law treated union negotiations as an open-ended proposition—anything that wasn’t expressly determined by state law was figuratively on the table, in hopes of keeping talks from breaking down. With little by way of legal guardrails, New York’s elected leaders were free to trade away their managerial authority in the name of “labor peace.”

The regulatory structure

The Taylor Law created the state Public Employment Relations Board (PERB) to regulate the negotiation process, oversee unionization elections, and provide mediation services. PERB’s three members, appointed by the governor subject to Senate confirmation, serve six-year terms. The governor designates one board member as the PERB chairperson, who acts as chief executive of an agency staff of about 30.

PERB’s most important function is arguably its ability to decide which terms and conditions of employment must be negotiated, may be negotiated, or may not be negotiated, the last case being when such negotiations would conflict with another section of state law.

For instance, an employer must negotiate when it wants to change a unionized employee’s rate of pay. An employer may negotiate how overtime is assigned. And an employer may not negotiate over pension benefits, which since the early 1970s have been determined solely by state law. (A separate agency, the New York City Office of Collective Bargaining, performs a subset of PERB’s duties for New York City unions).

PERB for its entire history has taken a position that more negotiation is better than less, leaving management with less discretion. Over the course of 55 years, the Taylor Law has been expanded beyond anything its framers had in mind. What follows is a description of some areas in which the playing field has tilted most decisively to favor unions and against the interests of management and taxpayers.

  • Disciplinary proceduresUnion contracts are allowed to have disciplinary matters decided by unelected arbitrators instead of elected officials, going far beyond the already-strong due process protections granted by the civil service law. A 2011 New York Times investigation of state homes for the developmentally disabled found the state’s arbitration rules had prevented officials from firing employees in 99 out of 129 reviewed cases.8Hakim, Danny, “At State-Run Homes, Abuse and Impunity,” New York Times, 12 Mar 11 nytimes.com/2011/03/13/nyregion/13homes.html More recently, union records revealed that arbitration had prevented termination of workers who had forged time records, violently attacked a resident in a state-run home, viewed pornographic material at work, and committed other serious offenses.9Girardin, Ken, “Double Insulation,” Empire Center, 2020. empirecenter.org/publications/double-insulation Disciplinary arbitrations can be slow and extremely costly, prompting officials to avoid trying to terminate bad actors altogether. While state courts have affirmed that elected officials and their appointees, not contract provisions, have the last word in police discipline cases in the City of New York and some municipalities, state agencies would face arbitration in attempting to terminate many if not most employees.
  • “Unit work”—PERB has given unions veto power over any effort that would transfer work done exclusively by members of a particular public-sector union to a private contractor or even other public employees who are not represented by the same union. This means even if an employee retires, employers often must hire a new union-represented person rather than shift responsibilities to other employees or vendors. The New York City Transit Authority, which operates the city subway, had to get permission from the Transport Workers Union merely to have stations deep-cleaned by a contractor. PERB has explicitly ruled that “improved service” does not justify taking away work from unionized employees.1025 PERB ¶3081 (1992)
  • Minimum staffing—Union contracts, particularly for police and fire employees, sometimes require municipalities to employ a minimum number of uniformed employees or to have a minimum number working at any time. This is an especially costly requirement for municipalities where the need for fire protection has changed as populations have declined and building standards have improved.
  • Union privileges—PERB (enabled by the state Legislature) has gone far beyond allowing unions to negotiate for employee benefits by allowing unions to demand—and friendly officials to grant—benefits for the union itself. PERB allows contracts to require paid union release time for union officers and their designees, allowing them to perform union work (or campaign for political candidates) during work hours without having to reimburse the employer. Other contract provisions force employers to deduct and remit funds to union political action committees, meaning taxpayers absorb the administrative cost of their political fundraising.

In addition, PERB has held that an employer must continue providing a benefit, even if that benefit was being conferred improperly or without legal authorization, if employees have a reasonable expectation that it will continue. Moreover, both PERB and state courts have together developed a complex patchwork of instances when policies affecting retired government workers must be negotiated. Applying union contracts to former employees presents myriad practical issues: retirees, for one thing, don’t vote on the deals.

The Legislature excluded pension benefits from union negotiations in 1973, but PERB has ruled unions and employers can still negotiate over retiree health benefits—an open-ended proposition with costs far outlasting any one contract.

Pushbacks and poor data

New York’s adversarial approach to public-employee labor relations is fundamentally biased against smaller local governments, which lack the resources to adequately challenge the state’s worst rules. When a local government pushes back and tries to assert management’s rights on a particular issue, it must assume the legal costs, and risks, of rolling the dice on challenging PERB in court. Officials must go it alone, even if other municipalities would benefit if they prevail. But when local disputes arise, large parent unions have an interest in pushing for more favorable precedents that can benefit hundreds of bargaining units all at once.

For example, in 2007, former Mayor Brian Stratton of Schenectady (population 67,000) launched what would become a decade-long battle to reclaim disciplinary powers over the city’s troubled police department. Forced to keep several suspended officers on the payroll while the dispute was litigated in state courts, the city’s eventual victory at the Court of Appeals came at a price of well over $1 million in combined payroll and legal costs. And the small city of Watertown (population 25,000) spent four years and more than $850,000 in legal costs fighting to overturn a contract provision that required the city to have 15 firefighters on duty.11nny360.com/city-attorney-will-soon-part-ways-in-fire-department-case/article_f5b56f7d-788d-5132-8110-3d85cfb6981e.html The city ultimately had to pay an additional $130,000 penalty.12Higgins, Oniqua, “Watertown and Fire Union Staffing Battles End,” Spectrum News, 14 Nov 19. spectrumlocalnews.com/nys/buffalo/news/2019/11/14/watertown-fire-department-settlement-

PERB’s discretion is quite broad. Any effort to make either the state workforce or New York’s public sector in general more efficient runs through PERB. The PERB chair, a gubernatorial designee, has significant discretion over the agency’s staff and operations.13As of the fall of 2022, it appeared all three members of PERB had “holdover” status, meaning they have not been confirmed by the Senate to full terms. The last Senate confirmation of a PERB member appears to have taken place in June 2016, when former NYSUT attorney John Wirenius was confirmed as board chair.

Besides making rulings about the Taylor Law, PERB has a statutory responsibility to “make studies and analyses of, and act as a clearinghouse of information relating to, conditions of employment of public employees throughout the state.”14CSL §205(5)(e) But in recent years it increasingly has failed to live up to this mandate.

PERB’s budget in fiscal 2023, just under $3.8 million, is more than 33 percent below its fiscal 1999 level on an inflation-adjusted basis—even though, in that time, the board has absorbed the responsibilities of a smaller agency that adjudicates private-sector labor matters, increasing its workload without a commensurate increase in resources. Under former Chair Michael Cuevas, who left the post in late 2006, PERB reviewed contracts and identified trends, giving public employers a better read on the reasonableness of union demands. But the board ceased compiling and releasing such information; indeed, its research capabilities are so diminished that the agency presently cannot say how many unions in New York are covered by the Taylor Law.15A statistical table on the agency’s own website, which presented complete numbers for negotiating units and negotiable contracts as recently as 2018-19, has the notation “data not provided by public employers and employee organizations” for the last three years.  https://perb.ny.gov/perb-by-the-numbers/

The lack of data and transparency at the state level puts municipalities at a disadvantage. About half of the state’s roughly 5,300 union contracts in force today were negotiated by local chapters of two large unions, CSEA and NYSUT. This means union negotiators arrive at the bargaining table already possessing necessary information about regional trends and emerging issues.

PERB regulations require employers to submit ratified agreements to the board within 15 working days. Yet out of more than 1,000 contracts that appear to have been ratified during 2021, PERB has so far added just two to its online contract database.

Triborough Trouble

PERB in 1972 held that the Triborough Bridge and Tunnel Authority could not suspend or change mandatory subjects of bargaining, such as pay and benefit levels, after a contract expired.165 PERB ¶3037 (1972) This became known as “Triborough doctrine.”

With favorable contract provisions effectively locked in place, the Triborough doctrine meant unions no longer had an incentive to come to the table before a deal expired. However, a crucial portion of the administrative finding was rolled back under a 1977 ruling by the state Court of Appeals, which held that employers could not be required to pay longevity-based raises, sometimes known as “step increases” or “increments,” after expiration of a contract.

“To say that the status quo must be maintained during negotiations is one thing; to say that the status quo includes a change and means automatic increases in salary is another,” Chief Judge Lawrence Cooke wrote for a unanimous court.17Board of Cooperative Educational Services v. New York State Public Employment Relations Board, 41 N.Y.2d 753, 363 N.E.2d 1174, 395 N.Y.S.2d 439 (N.Y. 1977) Cooke’s opinion also warned that “in times of escalating costs and diminishing tax bases, many public employers simply may not be able in good faith to continue to pay automatic increments to their employees.”18Board of Cooperative Educational Services v. New York State Public Employment Relations Board, 41 N.Y.2d 753, 363 N.E.2d 1174, 395 N.Y.S.2d 439 (N.Y. 1977)

In 1982, however, following heavy lobbying by public employee unions, the state enacted what became known as the Triborough Amendment to the Taylor Law, requiring employers to continue all terms and conditions of expired contracts, including seniority-based raises.19CSL §209-a(1)(e) The amendment weakened union incentives to settle on new contracts before the expiration of an existing agreement—especially in the case of teachers’ unions, whose contracts typically include 20 or more years of longevity-based step increases of two to four percent in addition to any negotiated base pay increases. (See Figure 3, below.)

The Triborough Amendment gives public employees an incentive to hold out when management is seeking contract concessions. As one state worker put it when his union was asked to ratify contract givebacks in 2011: “We have Triborough … [so] why do this to yourself?”20“PEF Deal Matches CSEA’s, To Dismay of Its Mem­bers,” The Chief, Aug. 1, 2011, p. 1. In Buffalo, for example, public school teachers enjoyed raises for over a decade during a prolonged contract impasse between 2004 and 2016—holding out, among other things, against demands that they give up their free elective cosmetic surgery benefit. Thanks to step increases and other contract provisions, Buffalo educators (primarily unionized teachers, with a smaller group of administrators) had pay increases averaging 33 percent between 2007-08 and 2015-16—even though their contract had expired.21Girardin, Ken, “Buffalo’s Murky Teacher Pact,” Empire Center, 18 Oct 16. empirecenter.org/publications/buffalos-murky-teacher-pact When a successor deal was ratified in 2016, teachers got between $2,000 and $9,000 in backpay as well as immediate 10 percent raises.22Lankes, Tiffany and Jay Rey, “Teacher contract boosts pay, ends cosmetic rider,” The Buffalo News, 17 Oct 16. buffalonews.com/news/local/education/teacher-contract-boosts-pay-ends-cosmetic-rider/article_a9661016-ab84-5f19-991e-a7bfce898cb7.html

Binding arbitration

Beginning in 1974, in “temporary” statutory provisions that have been renewed every few years since, the Legislature authorized unions representing police, firefighters, New York City transit workers and certain corrections officers the right to seek binding “interest arbitration” to settle contract impasses.23CSL §209(4) and (5). The Taylor Law did not originally provide for compulsory binding arbitration of contract impasses. The panel of labor experts who drafted the original law said that “would be detrimental to the cause of developing effective collective negotiations,” and predicted: “The temptation in such situations is simply to disagree and let the arbitrator decide.” (See State of New York, Governor’s Committee on Public Employee Relations, Final Report, March 31, 1966, as reprinted in Jerome Lefkowitz, Melvin H. Osterman and Rosemary A. Townley, eds, Public Sector Labor and Employment Law, Second Edition, New York State Bar Association (1998), 60.

Binding arbitration, like the Triborough Law, gives unions added reason to hold out for more in negotiations. The result: pay for uniformed police and fire employees increased at roughly three times the rate of other general government employees in the 38 years after they received arbitration privileges.24McMahon, EJ and Michael Wright, “Police and Fire Pay Keep Rising, Benefits Sticky Under Arbitration,” Empire Center, 9 May 13

Arbitration chairs—whose livelihood depends on the willingness of unions to go along with their selection—have discretion in choosing the “comparables” against which each municipality’s terms and conditions are evaluated. Unions naturally seek to have their contracts compared with the most generous terms found in other jurisdictions. This led to a ratcheting-up effect, especially in downstate suburbs where town and village police departments are more numerous. Long Island departments, in particular, face constant cost pressures due to such comparisons and the specter of arbitration. Salaries in some years have averaged over $200,000 in a handful of small downstate police departments.

Governor Cuomo in 2013 proposed significant reforms for fiscally distressed municipalities that would have capped at two percent the pay raises arbitrators could award, with a similar cap on the employer share of healthcare costs. But the governor ultimately abandoned that proposal, instead settling for token changes to the law including a vague requirement for arbiters to give greater consideration to a municipality’s ability to pay.25McMahon, E.J, “Cuomo backpedals on binding arbitration,” Empire Center, 18 June 13. empirecenter.org/publications/cuomo-backpedals-on-binding-arbitration

The second major problem with binding arbitration is that awards tend to be limited to basic questions on pay and benefits. While managers may be looking to negotiate work rule changes, any union with arbitration privileges can be confident that an impasse will result in raises with little else changing as arbiters avoid being seen as too tough on labor. The binding arbitration provision is set to expire in July 2023 for transit employees and in July 2024 for uniformed police and fire departments employees statewide. Allowing it to expire would give mayors and other local leaders greater power to demand not only fiscal reforms but also improvements to how departments run.

Between Triborough and impasse arbitration, the Legislature has tipped the tables heavily in labor’s favor, making it more difficult for elected officials to efficiently deliver public services.

Cones of silence

Collective bargaining negotiations are conducted behind closed doors, meaning the public is unaware of contract demands, proposals and counter-proposals by either side. Contracts are often ratified before the public can understand or even view them. Employers bringing a tentative agreement to a local legislative body need not provide an estimate of the deal’s added costs. The rush to ratification means officials sometimes make mathematical and other errors in legally binding documents, on which the state places no maximum duration.

A 2005 Suffolk County grand jury, investigating financial irregularities in local districts, found “an abject lack of transparency regarding the issue for which school districts spend the overwhelming majority of their funds—salaries and benefits for their employees.”26Suffolk County Court Special Grand Jury, Sept. 19, 2005 Term IE, CPL Section 190.85(1)(C), Grand Jury Report Dated: June 26, 2006, page 188. The grand jury recommended that state law require that “copies of all proposed school district collective bargaining agreements, employment contracts or amendments to those contracts be placed on the school district web site, if existing, and within the local public libraries and school district offices, at least one month prior to the board of education’s vote upon the contracts or amendments.”27Suffolk County Court Special Grand Jury, Sept. 19, 2005 Term IE, CPL Section 190.85(1)(C), Grand Jury Report Dated: June 26, 2006, page 195.

What’s more, the grievance adjustments and disciplinary determinations that flow from the agreements—and essentially set government policy—are almost never made public. The Taylor Law essentially imposes a second lawmaking process on New York state and local government—without the accountability that comes with elections.

MOVING FORWARD

The Taylor Law and administrative rulings have been major contributors to New York State’s exceptionally high state and local taxes.  Public-sector contracts also stand as a major obstacle to efforts to improve the efficiency and quality of public services. Reform priorities for the governor and Legislature:

  • Make collective bargaining more transparent. Tentative agreements should be published on the internet, along with detailed cost estimates and fiscal impacts, for at least one month before they are ratified. For state government itself, the Office of Employee Relations should promptly publish all documents relating to labor union grievances, past negotiations, and disciplinary disputes.
  • Rejuvenate PERB to focus on the broad public interest. The governor and state lawmakers should insist that the board lives up to its mandate to provide research and analysis that can inform employers and the public. This includes, first and foremost, collecting contracts as its regulations already require.
  • Repeal the Triborough Amendment. Triborough and impasse arbitration make it difficult, if not impossible, for elected officials to make reasonable changes to how government operates. The Triborough Amendment should be repealed to prevent pay raises from taking effect after a contract has expired.
  • Set limits on binding arbitration settlements. Before extending the law past currently scheduled sunsets, the Legislature at a minimum should enact Governor Cuomo’s original 2013 proposal to cap at two percent the cost of pay and compensation increases, which would give unions more incentive to negotiate in good faith.
  • Limit the scope of collective bargaining. New York’s experiment with open-ended bargaining has been not only expensive but has caused contracts to co-opt decisions that should be made by elected officials. Matters that aren’t directly related to wage and benefit levels, including discipline and work rules, should be excluded from bargaining, as pension benefits were in 1973.
APPENDIX
The State Government Workforce

State agency headcounts of full-time equivalent employees (FTEs) as measured in mid-calendar year peaked at more than 256,000 under Governor Mario Cuomo in the early 1990s, but declined to just over 224,000 during the first two terms of Governor George Pataki, who took office in 1995. The FTE count began rising again in the final years of Pataki’s third term, and continued increasing under Governors Eliot Spitzer and David Paterson, hitting its most recent peak of 232,000 in 2009, early in a two-year fiscal crisis brought on by the Great Recession.

Taking office in 2011, Governor Andrew Cuomo undertook a credible effort to restructure state agencies and reduce payrolls. Among other things, he consolidated back-office functions performed by separate department-based operations such as travel, accounting, and human resources. Agencies instead became clients of a new Business Service Center at the Office of General Services. A year later Cuomo centralized IT personnel, then scattered across 37 agencies, into the Office of Information Technology Services.28“Testimony of Brian D. Digman, State Chief Information Officer and Director NYS Office of Information Technology Services,” NYS Senate, 6 Feb 13. nysenate.gov/sites/default/files/articles/attachments/6-%20Office%20for%20Technology.pdf The state by 2020 had reduced its I.T. headcount by nine percent and was operating with one- third fewer I.T. managers.29“New York State Workforce Management Report,” NYS Dept. of Civil Service, 2020. cs.ny.gov/businesssuite/docs/workforceplans/2020.pdf#page=101 In the spring of 2020, Cuomo ordered a hiring freeze (with exceptions) that remained in effect until it was suspended by Governor Hochul in September 2021. During the freeze period, FTE headcounts dropped substantially, to a new low of just over 200,000 FTEs in mid-2022, as illustrated below.

Excluding State University, City University and State Police employees, the headcount most directly controlled by the governor hovered around 149,000 for several years, but sank below 142,000 by January 2021 and bottomed out at less than 134,000 a year later. Governor Hochul this year is aiming to add back about 12,000 state employees to these agencies.30“FIRST QUARTERLY UPDATE TO THE FY 2023 ENACTED BUDGET FINANCIAL PLAN,” NYS Division of the Budget, p. 138. budget.ny.gov/pubs/archive/fy23/en/fy23en-fp-q1.pdf#page=138

The biggest employee relations challenges faced by New York’s governor in 2023 will include:

  • Managing remote work. A significant portion of the state’s white-collar workforce continues telecommuting on a part-time basis under rules determined by each agency. It’s unclear how performance is being measured, but given the state’s longstanding challenges with employee discipline, it is likely there are areas that require immediate—and resolute—attention.
  • Ongoing negotiations with unions. Excepting the Civil Service Employees Association and AFSCME Council 82 (senior corrections officers), all state union contracts will have expired by the end of 2023. CSEA secured across-the-board raises of 3 percent for fiscal years 2024 through 2026 in addition to one-time bonuses, and is generally seen as setting the pattern for other unions.
  • Implementing COVID lessons. The inflexibility of the state workforce was on display in the early days of the pandemic as the state struggled to retask employees to urgent matters such as processing unemployment claims. With agency headcounts down, the governor will have an opportunity to further restructure and potentially centralize state functions such as customer-service operations that remain distributed across agencies.

The state workforce is not managed in a vacuum. It is constrained in many ways by the same policies that affect counties, school districts, cities, towns and villages. Any change to the Taylor Law or civil service regulations increase the flexibility of the state workforce would have separate—if not larger—benefits for local officials eager to reduce property taxes and improve service delivery.

Ken Girardin is a fellow at the Empire Center.