2009-2010 Executive Budget – Briefing Book
State Workforce
I. Overview
State employees manage a range of facilities, services, and provider networks, and oversee and administer billions of dollars in program funding and capital projects. This requires a diverse, but stable, workforce, the size of which must be balanced between public need and fiscal responsibility.
State employees receive an average compensation of $62,453 plus generous fringe benefits.
Many employees (approximately 33 percent) are involved with protecting the health and safety of New Yorkers. Some of these individuals work in institutional settings such as psychiatric hospitals, drug treatment centers and correctional facilities, and others work in a variety of law enforcement capacities, including the State Police, the Division of Parole, the park police, and other bodies. The largest state employers are:
| Agency | Workforce (3/31/09 Estimate) |
|---|---|
| State University of New York | 40,632 |
| Department of Correctional Services | 31,673 |
| Office of Mental Retardation and Developmental Disabilities | 22,503 |
| Office of Mental Health | 17,071 |
| City University of New York | 11,455 |
II. History/Context
The state projects to end the 2008-09 fiscal year with 199,400 state employees, a reduction of 354 positions compared to 2007-08 and 1,770 fewer than projected at the beginning of the 2008-09 fiscal year. This downward trend was influenced by several actions including the implementation of a hiring freeze and mandated state agency spending reductions, both of which Governor Paterson ordered in response to the state’s deteriorating fiscal condition. Compared to 2003-04, however, the size of the 2008-09 workforce represents an increase of 12,035, or 6.4 percent.
Since 2003-04, the vast majority of state employee salaries have increased by over 23 percent through negotiated bargaining agreements. Over the four years of the current contract alone, ending in 2010-11, salaries are projected to increase by 14 percent.
III. Proposed 2009-10 Budget Actions
The Executive Budget advances proposals to reduce spending for state employees in a way that will minimize layoffs during a time of economic distress and avoid service disruptions in critically important programs. These measures include partnering with state employee unions to modify compensation arrangements so as to reduce costs. The size of the state workforce will also decline based on facility closures, agency mergers, and continued management of employee hiring.
IV. Workforce Summary
| Category | 2008-09 (millions) |
2009-10 (millions) |
Change | |
|---|---|---|---|---|
| Dollar (in millions) |
Percent | |||
| State Workforce Personnel Costs (including salaries and fringe benefits) |
17,565 | 17,875 | 310 | 1.7% |
| Category | 2008-09 (millions) | 2009-10 (millions) | Change | |
|---|---|---|---|---|
| Dollar (in millions) |
Percent | |||
| State Workforce | 199,400 | 196,292 | (3,108) | (1.6%) |
By the end of 2009-10, the state workforce is projected to total 196,292, a net decrease of 3,108 positions. This reflects 4,205 attritions (1,500 of which are not assigned to specific agencies and reflect the continuation of the hiring freeze), 521 layoffs, and 1,618 essential hires. The size of the state workforce would still represent an 8,917 increase compared to the size of the state workforce in 2003-04, or 4.7 percent.
Agencies expected to experience the most significant workforce changes during 2009-10 include:
- The Department of Correctional Services (DOCS) (-1,342).
- The Department of Taxation and Finance (+300).
- The Office of Children and Family Services (OCFS) (-288).
- The Department of Economic Development (-200).
- The Office of Mental Retardation and Developmental Disabilities (OMRDD) (-53).
V. Major Initiatives
Gap Closing Actions
| Proposal | 2009-10 ($ in millions) |
2010-11 ($ in millions) |
|---|---|---|
| Implement Five Day Salary Deferral | 121 | 0 |
| Eliminate Scheduled 2009-10 Salary Increases | 180 | 180 |
| Advance Tier 5 Pension Proposal | 10 | 30 |
| Modify Future Retiree Contributions for Health Care | 8 | 17 |
| Require Medicare Part B Premiums Contributions | 30 | 30 |
| Achieve Fringe Benefit Savings | 7 | 16 |
| Reduce Court of Claims Interest Proposal | 3 | 3 |
| Reduce Taxes on State Owned Lands/PILOT Proposal | 9 | 16 |
| Total | 368 | 292 |
Governor Paterson will seek to partner with state employee unions to help reduce salary costs by $301 million in 2009-10 and $180 million in 2010-11 including a salary deferment and elimination of a salary increase scheduled for 2009.
- Implement Salary Deferral. Defer 5 days of salary payments in 2009-10 until an employee leaves state service or the fiscal crisis is declared to be ended (whichever comes first). At such time, employees will be entitled to a lump sum payment based upon the rate of basic annual salary then in effect. In no event will the lump sum payment be less than the amount of salary originally withheld. A 5-day salary deferral was previously implemented during the 1990-91 fiscal crisis. (2009-10 Savings: $121 million; 2010-11 savings: $0)
- Eliminate Scheduled 2009-10 Salary Increases. Eliminate salary increases scheduled for 2009-10. These increases were negotiated during better fiscal times. Even after this action, over the four-year life of their contract most workers would still receive a salary increase of 10 percent (3 percent in 2007-08, 3 percent in 2008-09, 4 percent in 2010-11). (2009-10 Savings: $180 million; 2010-11 Savings: $180 million)
A number of actions are recommended to reduce fringe benefit costs. These actions will save $55 million in 2009-10, increasing to $93 million in 2010-11.
- Advance Tier 5 Pension Proposal. The Executive Budget proposes a new tier of pension benefits be enacted for newly hired state and local government employees. This plan, known as Tier 5, will largely return pension benefits to the levels prior to recent benefit enhancements. These changes include reinstituting 3 percent employee pension contributions past ten years of service, returning the minimum retirement age from 55 to 62, and several other cost saving adjustments. This newly created pension tier will significantly reduce future state and local government pension liabilities. It is expected that the pension contribution rate to be billed against new employee salaries will decrease by approximately 2.5 percent. This will result in immediate cost savings that will grow over time as existing employees leave the payroll and more new employees are hired. (2009-10 Savings: $10 million; 2010-11 Savings: $30 million)
- Modify Future Retiree Contributions for Health Care. The state’s contributions for future retired state employees health insurance premiums would be provided on a sliding scale based on the retiree’s years of service. Currently, the state pays 90 percent of premiums for all employees (75 percent for dependents) who retire with at least 10 years of service. Under this proposal, the state would pay a minimum of 50 percent of premiums for individual coverage and 35 percent for dependent coverage for employees who retire with 10 years of service. The state’s contribution would increase by 2 percent of premium for each additional year of service up to a maximum contribution of 90 percent for individual coverage and 75 percent for dependent coverage for employees who retire with 30 or more years of service. (2009-10 Savings: $8 million; 2010-11 Savings: $17 million)
- Require State Employees and Retirees to Contribute to Medicare Part B Premiums. The state currently pays 100 percent of the Medicare Part B premium for employees and retirees. Requiring employees and retirees to contribute towards Medicare Part B premiums would increase annual premium costs to employees and retirees by approximately $20-30 for individual coverage and $80 for family coverage. (2009-10 Savings: $30 million; 2010-11 Savings: $30 million)
- Fringe Benefit Savings. Various workforce actions will achieve fringe benefit savings. (2009-10 Savings: $7 million; 2010-11 Savings: $16 million)
Other actions are proposed that will impact the general state charges budget:
- Reduce Interest Paid on Judgments Against the State. Under current law, the state is statutorily mandated to pay an interest rate of 9 percent on all judgments against the state in the Court of Claims, resulting in unnecessarily high litigation costs. The Executive Budget proposes to tie the interest rate to be paid to a market-based rate, resulting in cost savings to the state. (2009-10 Savings: $3 million; 2010-11 Savings: $3 million)
- Reduce State Payments in Lieu of Taxes and Taxes on State-Owned Lands. The state pays taxes on certain state-owned lands pursuant to various sections of Real Property Tax Law and makes payments in lieu of taxes (PILOTs) on other lands pursuant to various sections of Public Lands Law. The Executive Budget proposes to maintain tax payments made by the state on various state lands at 2008-09 amounts and reduce scheduled 2009- 10 PILOTs by six percent. (2009-10 Savings: $9 million; 2010-11 Savings: $16 million)
Other Workforce Actions
- Department of Correctional Services: Camp and Annex Closures. Staff reductions are anticipated from the closure of correctional camps at Pharsalia, Gabriels, Georgetown, and Mt. McGregor in response to a decline in the number of minimum-security inmates and a shift from the camp model of rehabilitation (-322 attritions). Further reductions are anticipated from the closure of several annexes due to excess capacity at certain correctional facilities (-232 attritions).
- Office of Children and Family Services: Facility Closures and Downsizing. Close or downsize 5 Non-Secure and Limited Secure youth facilities, 1 reception center, 2 Community Residential Homes, and 3 underutilized Evening Reporting Centers (-128 attritions and -127 abolitions) because of high vacancy rates.
- Sentencing and Parole Reforms: The budget advances preliminary recommendations of the Commission on Sentencing Reform regarding merit time credits, intensive rehabilitation programs coupled with early release, graduated sanctions for parolees, and the use of a risk and needs assessment tool to increase an offenders chance for success in the community. These proposals, together with continued population declines, are expected to reduce the prison population by 1,600 inmates by January 2010. As a result, the workforce can be reduced by 750 positions in the final quarter of the fiscal year, entirely through attrition.
- Department of Correctional Services and Office of Mental Health: Adjusted Staffing Needs for the Sex Offender Management and Treatment Act (SOMTA). Adjust staff needed to effectively operate the sex offender treatment program as mandated by the SOMTA legislation (-28 attritions at DOCS and -172 attritions and -45 abolitions at OMH), achieved in part through the elimination of funded vacancies.
- Restructure the State’s Economic Development Delivery Structure. To streamline and improve the delivery of economic development services, NYSTAR will be eliminated and its functions transferred to ESDC. Further efficiencies and coordination will be achieved through enhanced integration of activities between DED and ESDC (-109 abolitions, -117 attritions).
- Merge Select State Entities. To produce efficiencies and cost-savings, several state
agencies or public benefit corporations will be merged:
- The State Employment Relations Board is abolished, and the Public Employment Relations Board absorbs their responsibilities. (-3 abolitions, -12 attritions);
- The Office of the Welfare Inspector General (10 staff) would merge with the Medicaid Inspector General;
- Northeastern Queens Nature and Historical Preserve Commission and the Hudson River Valley Greenway Communities Council and Conservancy would merge into the Department of State. (-4 abolitions, -1 attrition); and
- The New York State Theatre Institute would merge with the Empire State Plaza Performing Arts Center Corporation (no staff impact).