(You may have read about the Westchester County Association breakfast on March 2, where the leadership of the Westchester Board of Legislators spoke. See Phil Reisman’s column:
Here are the notes from my presentation. I did modify this speech as I spoke at the breakfast, but this is most of my speech.)
Good morning. Thanks for inviting us to join you this morning and thanks to the Westchester County Association for the important work you do in our county.
Peggy Noonan (the former Reagan speechwriter) wrote a column this past weekend wondering if elected officials are still capable of taking the word “crisis” seriously – or have they been so bombarded by events labeled “crisis” over prior decades, that our leaders are now just jaded and avoid genuinely confronting a real “crisis.”
We must wonder about this as we watch the New York State government deal with a $10 billion deficit for this year’s budget after years of excessive spending. In prior years, many analysts were calling for fiscal restraint to avoid the pending budget crisis, but they did nothing to address it. And remarkably, it did not matter in the 2010 election, when the very legislators that ran up this incredible deficit were mostly re-elected.
Well, I am here today to tell you that the Westchester County government is still facing a fiscal crisis, and I am here to advocate that my colleagues on the Board of Legislators need to be more aggressive in reforming the county government and reducing spending in the county budget.
And I also believe that Westchester’s local governments and schools districts are facing the same crisis.
Yes, much of this problem is forced upon our county by unfunded mandates from New York State.
But, much is also our own fault for spending too much money over the past decade.
I have served on the Board of Legislators for 14 years and in every budget in my first 13 years, we raised spending. Yes, we raised spending every year until this past December, when we reduced taxes and spending in a bipartisan manner. I voted against many of these prior budgets because they were fiscally irresponsible, but unfortunately, they were passed by the majority. (Note, I believe I have the record for the longest serving Westchester county legislator in history to never have served in the majority!)
We know pension and health care benefits are a problem for all municipal budgets – just watch the battle in Wisconsin and other states on TV or listen to speeches by our new Governor Cuomo or County Executive Astorino.
Let me point out that I don’t wish to blame all the budgetary problems on our government workers, police, firefighters and teachers. We know how hard they work for all of us each day, and we have a terrific work force in the county government, but we cannot deny the exploding numbers we face for pension and health benefits. The exploding costs in our budget must be addressed, and unfortunately our government workers must take part in the shared sacrifice.
For example, the average cost of a county worker in 2010 with all the benefits included was $110,000, and this year in 2011 it is now up to $117,000. We cannot possibly handle such $7,000 increases every year.
So let’s look at some hard numbers (I promise not to bombard you with too many statistics). You should all look at a report on internet called “New York’s Exploding Pension Costs” by the Empire Center for New York State Policy – you can easily find it on Google.
This report shows that:
— State and local employer contributions to New York State and Local Retirement Systems (covering most of our county workers) will more than double over the next five years.
— Taxpayer contributions to New York State Teachers Retirement System could more than quadruple by 2016. Yes, I said quadruple in about 5 years. The projected increase is equivalent to 18 percent in school property tax increases.
Of course, the taxpayers will need to make up the resulting pension shortfalls in the various budgets – since the existing funds in the pension system cannot possible pay for these increases.
What does this mean for the Westchester County government:
The pension cost in 2011 budget – $46 million
The pension cost in 2012 budget – $57 million
The pension cost in 2015 budget – $105 million
Based on those numbers, we already have an $11 million deficit for next year’s budget, and in 2015 the pension cost is more than double 2011 – pretty powerful numbers.
And here is the kicker – there is nothing we can do about these exploding pension numbers for existing workers. All the current government workers in New York State have guaranteed pension plans pursuant to New York State law. We have to pay for them and we cannot modify them. We can make changes for future workers, but we need state legislation for that (and better reforms than the creation of the recent Tier 5).
So upon any objective review, these pension numbers are pretty scary.
Now let’s look at cost of health benefits in Westchester’s budget:
2010 – $111 million
2011 – $117 million
In 2011, we had to pay $6 million more than prior year – that is quite an increase.
Yet unlike pensions, we can do something about health care benefit costs, and they certainly cannot keep increasing $7 million per year.
How do we do this? Well, collective bargaining is coming up. About 5000 county workers under are under contracts that have expired or will expire soon.
How much do they now contribute for health benefits??? Nothing – they do not contribute anything!
What is national average for local and state governmental workers for contributions to health benefits – it is 25%. And in Westchester they pay zero.
Only non-unionized county workers contribute to heath benefits right now based on a law proposed by the County Executive and passed last year by our Board – with these 400 workers contributing between 10% to 20% on a sliding scale based in income.
County Executive Astorino will no doubt present a strong front in these collective bargaining negotiations and demand that our unionized workers contribute to heath benefits.
We must stand with him. Everyone in this room. And every taxpayer.
And especially the members of the Board of Legislators.
The days of free health benefits must be ended in the Westchester County government.
And I do not want to see my fellow legislators standing in the picket line looking to curry favors with the unions when this battle is waged.
I want my colleagues to take their fiduciary duty to the taxpayers seriously and avoid politics in the epic battle coming soon during Westchester’s collective bargaining process with our unions. Stay tuned for that battle.
Once again, as I said at the start of my comments, we are in a crisis that is getting much worse based on the numbers I have presented to you. And I only have time to discuss the pension and health care exploding costs and could also get into declining funding from state and federal governments, which is also a major concern.
So it is without question – we have no choice but to continue cutting and reforming our county budget and services to deal with the crisis.
Now let my turn to a battle going on in our county legislature right now – that is a test for our legislature. We will see which legislators are taking the crisis seriously.
You probably have read about the CSEA lawsuit. Here is a quick summary:
County Executive Astorino closed our Section 8 office, since it was not a mandated service – it was optional and could be run by a non-profit. And New York State is now doing just that – reviewing proposals for a non-profit to run this program.
The Democratic legislators fought the closure of Section 8 office. My Republican caucus supported the County Executive.
The Astorino 2011 budget eliminated the 38 workers in this office since the contract was ended and there was nothing for them to do. My friends on the other side of the aisle, strangely, restored the jobs in the budget. County Executive Astorino vetoed it, and the Democratic legislators did an override of the veto.
I must say that this was a bizarre override, since we then had 38 county workers showing up for jobs on January 1 that no longer existed – the contract was over.
Now the 38 workers have brought a lawsuit against the county and County Executive, and also named the Board of Legislators as a necessary party.
This a remarkable lawsuit by the way, because if the judge orders that the jobs are restored, these workers still have nothing to do when they come back because the contract is still over and not coming back. A non-profit will be running this program very soon – it is a done deal.
My friend Chairman Jenkins, who you just heard from, wants to enter the action on the side of the union. I am totally opposed to this, and we’ve had quite a debate on this issue in prior weeks.
To me, that would be a violation of our fiduciary duty as county legislators. When the county is sued, our first duty is to protect the county and our taxpayers in the litigation.
I am urging my colleagues to order our attorney to oppose this lawsuit and seek to dismiss it. Chairman Jenkins disagrees.
We will be voting on how we will defend this lawsuit in the coming weeks.
I respectfully submit that those legislators that vote to support the union workers against the taxpayers of Westchester County are not taking their fiduciary duty to the taxpayers very seriously.
But more importantly, those legislators are not taking the fiscal crisis facing our county very seriously.
So folks, watch the media on this issue in the coming weeks, and it will tell you a lot about where the Board of Legislators is heading in 2011, and whether we are ready to really tackle the fiscal and budgetary crisis we face in the coming years.
Lastly, what can we be doing better in the county government – communication. The communication between the County Executive and Chairman Jenkins has not been good. Sometimes, as minority leader, I feel like a mediator. The two branches of government need to communicate better in 2011 – if we are to properly face the crisis I have been talking about this morning.
And communication includes everyone in this room. We don’t hear enough from the business community. If you have a question or comment about any issue, please call me and the other legislators. Everyone in this room can be a check and balance on the county legislators.
Thank you for your time and for inviting me to speak today.