Letter to NYS Mandate Relief Redesign Team

May 12, 2011

Lawrence Schwartz, Chair

Governor’s Mandate Relief Redesign Team

Executive Chamber

NYS State Capitol

Albany, NY 12224

RE: Mandate relief proposals

Dear Mr. Schwartz:

I write on behalf of Unshackle Upstate, a bipartisan coalition of more than 80 business and trade

organizations representing a growing group of 70,000 companies and employing upwards of 1.5

million people.

We commend Governor Cuomo and his staff for your efforts in the state’s adoption of an on-time

budget that closes the estimated $10 billion deficit without raising taxes or increasing borrowing.

Unshackle Upstate and our member organizations believe that this budget sends a powerful

message that New York is on the road to recovery.

With that important first step taken, we believe that addressing unfunded mandates is an

essential step towards reviving Upstate New York’s economy and creating an economic

environment that enables private sector job creation.

We ask the Mandate Relief Redesign Team to consider the recommendations described below,

which are intended to provide the Governor and the Legislature with the means to address the

myriad of well-meaning, but costly, unfunded mandates the state government has imposed.

This package of proposals represents the first steps toward addressing New York's massive

“unfunded mandate” problem. If they are enacted, New York's local governments and school

districts will be able to move forward on the path toward fiscal responsibility and solvency.

May 12, 2011 – Letter to Mandate Relief Redesign Team page 2

We propose that the Mandate Relief Redesign Team consider the following proposals, each of

which will be described in greater detail:

• Enact the Unfunded Mandate Reform Act;

• Limit the ability of the state to impose future unfunded mandates;

• Authorize local governments to “opt-out” of certain unfunded mandates;

• Require all local government and school district employees and retirees to make minimum

contributions to their health insurance;

• Create a new defined contribution pension tier for all state and local employees;

• Establish and empower the Health Care Quality and Cost Containment Commission;

• Raise the Wicks Law threshold and make it uniform statewide;

• End the state’s “project labor agreement” mandate; and

• Expand Court of Claims jurisdiction to include claims against local governments.

Enact the Unfunded Mandate Reform Act

We propose that the Governor advance legislation, modeled on the SAGE Commission, to provide

a vehicle to eliminate existing unfunded mandates.

Under the Unfunded Mandate Reform Act, the Governor would be authorized to submit to the

Legislature once each legislative session a plan to repeal or revise unfunded mandates, and such

plan would have to be approved or rejected by the Legislature within 30 days of its submission.

Draft legislation that would achieve this is attached as Appendix A.

Limit Future Unfunded Mandates

We support enactment of legislation that would make it more difficult for the state to impose new

unfunded mandates on local governments and school districts.

We support legislation that would:

- define unfunded mandates during the legislative process (before they are acted on by the

Legislature);

- require a public hearing on proposed unfunded mandates so that legislators will

understand the impact of their actions; and

- require a 2/3 super-majority vote of both houses of the Legislature in order for the state to

impose any new unfunded mandates on local governments and school districts.

Similar legislation has been proposed by Assemblywoman Galef and Senator Martins

(A.1592/S.3211). We note that their bill would require only a 3/5 (60%) majority vote in order for


the Legislature to impose any new unfunded mandates. We urge that a higher threshold for new

unfunded mandates be placed into law.

Authorize Local Governments to “Opt-Out” of Certain Unfunded Mandates

We support enactment of legislation that would allow local governments and school districts to

opt-out of the Triborough Amendment to the Taylor Law.

Allowing local government to “opt out” of the Triborough Amendment would enable local

governments and school districts to freeze salaries when a contract expires. Under current law,

employees get step increases based on their years of service and pay increases based on

educational attainment. We believe that changing the law in this manner will give employee

bargaining units a greater incentive to re-negotiate contracts.

While we continue to support overall repeal of the Triborough Amendment and the Taylor Law as

those laws applies to all public employers in the state, this proposal would provide immediate

relief to those local governments and school districts that choose to opt-out of these unfunded

mandates.

Draft legislation that would achieve this is attached as Appendix B.

Require All Local Government and School District Employees and Retirees to Make Minimum

Contributions to their Health Insurance

We support legislation to establish statewide minimum health care contributions for public

employees -- 10% for individual coverage and 25% for family coverage, as well a 25% contribution

from covered retirees.

This proposal would align public employee health care costs with those of other states and the

private sector by requiring employees and retirees to pay the remainder of the total premium.

This change could save local governments and school districts as thousands of dollars per

employee and retiree.

Create a New Defined Contribution Pension Tier for all State and Local Employees

We support legislation such as S.4524 (Ranzenhofer) that would authorize local governments and

school districts (at local option) to offer an optional retirement program to new employees.

The increasing costs related to retirement system contributions are a growing problem for local

governments and school districts. Local government and school district officials are unable to


effectively plan for future costs because the amount that must be contributed varies from year to

year.

The city of Syracuse, for example, is facing a 40% increase in its pension costs over last year. Many

other municipalities across the state are facing similar or larger increases in their pension costs.

This legislation would allow municipalities to continue to participate in the current defined benefit

program, to offer a choice to employees of either a defined benefit program or a fully portable

defined contribution program, or to elect to offer only the defined contribution program.

Establish and Empower the Health Care Quality and Cost Containment Commission

In 2007 the Legislature created the Health Care Quality and Cost Containment Commission

(Chapter 57 of the Laws of 2007, Part L).

The Commission was put in law to conduct a comprehensive review of all currently mandated

benefits and proposed mandates, and to provide an objective cost-benefit analysis of proposed

health insurance benefit mandates prior to legislative action.

The Health Care Quality and Cost Containment Commission does not appear to have met since its

creation in 2007.

We urge the Governor to appoint the members of this Commission as soon as possible. The

creation of this entity can be an important t step toward ensuring that future health care

mandates be fully and appropriately considered before legislative action is taken on them, and will

also provide a forum within which existing health care mandates can be reviewed.

End the “Project Labor Agreement” Mandate

We support legislation such as S.4121 (Ranzenhofer) that would provide that a contractor bidding

on a request for proposal (“RFP”) issued by a state or municipal entity for public work and which

offers an optional project labor agreement (“PLA”) may submit a bid that does not include a PLA.

Further, the RFP must be awarded to the contractor with the low bid regardless of whether a PLA

was included in a contractor's bid proposal.

Legislation of this nature would enable the State and municipalities to save millions of dollars in

project costs since an open, competitive and fair bidding process would ensure the lowest price for

public works projects.


Raise the Wicks Law Threshold and Make it Uniform Statewide

Unshackle Upstate supports the elimination of the onerous Wicks Law mandate for all public

projects. This mandate requires that separate specifications be prepared and separate contracts

be awarded for the plumbing, electrical, and HVAC components of public construction projects

when the total project cost exceeds $3 million in New York City, $1 million in the downstate

suburban counties, and $500,000 in the remainder of the state.

In order to provide immediate mandate reform to local governments and school districts, we

recommend increasing the Wicks Law threshold to $5 million statewide until a full repeal is

possible.

The Wicks Law mandate substantially drives up capital construction costs for schools and local

governments. Increasing the “Wicks Law” threshold will enable local governments and school

districts throughout the state to better manage their capital construction costs.

Draft legislation that would achieve this is attached as Appendix C.

Expand Court of Claims Jurisdiction to Include Claims Against Local Governments

This constitutional amendment would require that all tort claims against local governments and

local government employees be brought before the Court of Claims, where tort claims against the

state are currently heard. Moving the forum for all tort claims made against local governments

and their employees to the Court of Claims will fairly protect the rights of injured individuals while

would providing local governments throughout the state with significant savings at no cost to the

State. Legislation that would achieve this was introduced in 2005 (S2817, Little).

In closing, Unshackle Upstate’s view is that it is critically important that the Governor and

Legislature provide local governments and school districts with real mandate relief this legislative

session.

I am available to discuss these proposals at your convenience, and look forward to the opportunity

to work with you and the Mandate Relief Redesign Team to implement these solutions to provide

real relief from unfunded mandates to local governments.

Thank you for your attention to this important issue.

Sincerely,

Brian Sampson, Executive Director

Unshackle Upstate


APPENDIX A

AN ACT to amend the executive law and the legisla tive law, in relation to enacting the unfunded mandate reform act of 2011 Section 1. The executive law is amended by adding a new article 5-A to read as follows: ARTICLE 5-A

UNFUNDED MANDATE REFORM ACT Section 75. Short title. 76. Duty of governor to examine agencies; legislative purpose. 77. Definitions. 78. Findings by governor; issuance of unf unded mandate reform plan. 79. Contents of unfunded mandate reform p lan. 80. Effective date of unfunded mandate re form plan. 81. Programs and services that shall not be the subject of an unfunded mandate reform plan. 82. Severability. § 75. Short title. This article shall be known and may be cited as the "unfunded mandate reform act”. § 76. Duty of governor to examine unfunded mand ates; legislative purpose. The governor, from time to time, shall examine thos e mandates imposed by the state on local governments and school districts tha t the state does not provide adequate funding to support, and shall determine wh ich changes are necessary to reduce the burden of these unfunded mandates on pol itical subdivisions. § 77. Definitions. As used in this article, the f ollowing terms shall have the following meanings: 1. "Political subdivision" means any county, ci ty, town, village, school district or special district. 2. "Assembly" means the New York state assembly . 3. "Governor" means the governor of the state o f New York. 4. "Legislature" means the legislature of the s tate of New York. 5. "Senate" means the New York state senate. 6. “Unfunded mandate” means any program or serv ice requirement imposed by the state through statute, regulation or other dire ctive that has a direct financial impact on any political subdivision in ex cess of ten thousand dollars per year, or on two or more political subdivisions collectively or on a city with a population of one million or more in excess of one hundred thousand dollars per year. 7. "Unfunded mandate reform plan” or "plan" sha ll mean the bill prepared by the governor, and submitted to the legislature as a program bill, that contains the terms and information regarding the repeal or r evision of unfunded mandates upon political subdivisions. § 78. Findings by governor; issuance of unfunded mandate reform plan. 1. Whenever the governor finds it to be in the public interest, he or she may submit to the legislature an unfunded mandate refor m plan. 2. Nothing in this article shall prohibit or limit the authority of the governor or legislature to repeal, revise or provid e funding for unfunded mandates pursuant to any other lawful process.

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§ 79. Contents of unfunded mandate reform plan. 1 . An unfunded mandate reform plan shall: (a) set forth as findings in such plan, a descr iption of the nature and purposes of the unfunded mandate reform plan, toget her with an explanation of the advantages that will result from its implementa tion, including the anticipated savings and costs associated with each repeal or revision of an unfunded mandate; (b) describe in detail other actions, if any, n ecessary implement that plan; (c) any preliminary actions which have been take n in implementing the plan; and (d) provide a projected timetable for completion of the implementation process. § 80. Effective date of unfunded mandate reform p lan. 1. An unfunded mandate reform plan shall be voted on by each house of the legislature, without amendment as submitted by the governor, within thirty days after such submission. The governor may submit only one such p lan annually and may amend that plan one time within such thirty day period. Both houses of the legislature shall then have thirty days from the submission of such amendment to vote on the amended unfunded mandate reform plan. Without the c onsent of both houses of the legislature, neither a plan nor an amendme nt may be submitted by the governor after the thirtieth day of May in any year . 2. Under provisions contained in an unfunded man date reform plan, a provision of the plan may be effective at a time later than t he date on which the plan otherwise is effective. § 81. Programs and services that shall not be the subject of an unfunded mandate reform plan. 1. Notwithstanding any other provision in this section to the contrary, the following categories of programs and services shall not be considered unfunded mandates: (a) those which are required to comply with federa l laws or rules or to meet eligibility standards for federal entitlements, so long as such mandates are not broader than federal eligibility standards; (b) those which are imposed on both government and non-government entities in the same or substantially similar circumstances; (c) those which permit, establish or enable only o ptional programs or services; (d) those which repeal, revise, or ease an existin g mandate or requirement, or which reapportion the costs of activities between b oards of education, counties and municipalities; (e) those which arise from a ruling by a court of competent jurisdiction; (f) those which are enacted after a public hearing , held after public notice that unfunded mandates will be considered, for whic h a fiscal impact note as defined in section 51 of this article is available at the time of the public hearing and which, in addition to complying with al l other requirements with regard to the enactment of a law, are passed by a t wo-thirds vote of both the senate and assembly; and (g) those which are the result of the passage of a home rule message whereby a local government requests authority to implement th e program or service specified in the statute, and the statute imposes c osts only upon that local government which requests the authority to impose t he program or service. § 82. Severability. If any clause, sentence, p aragraph, subdivision, section or part of this article shall be adjudged b y any court of competent jurisdiction to be invalid, such judgment shall n ot affect, impair, or invalidate the remainder thereof, but shall be con fined in its operation to the clause, sentence, paragraph, subdivision, section or part thereof directly

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involved in the controversy in which such judgment shall have been rendered. It is hereby declared to be the intent of the legisla ture that this article would have been enacted even if such invalid provisions h ad not been included in this section. § 2. The legislative law is amended by adding a new section 54-c to read as follows: § 54-c. Unfunded mandate reform plan. The legis lature may by concurrent resolution prescribe rules for the consideration an d disposition of an unfunded mandate reform plan, as defined in article five-A o f the executive law. § 3. This act shall take effect immediately.

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MEMORANDUM IN SUPPORT OF LEGISLATION

BILL NUMBER: SPONSOR: TITLE OF BILL : AN ACT to amend the executive law, in relation t o enacting the unfunded mandate reform act of 2011 PURPOSE: To authorize the Governor to submit to the Legislat ure once each legislative session a plan to repeal or revise unfunded mandate s, and to require such plan to be voted on by the Legislature within 30 days of its submission. SUMMARY OF PROVISIONS: Section 1 adds a news Executive Law article 5-A, en titled the Unfunded Mandate Reform Act. This new article authorizes the Governor to submit to the Legislature annually an unfunded mandate reform plan, which the Legislat ure must approve or reject within 30 days of its submission by the Governor. New Executive Law § 75 sets forth a short title, th e Unfunded Mandate Reform Act. New Executive Law § 76 states that it is the respon sibility of the Governor to periodically review unfunded mandates imposed by th e state on local governments and school districts. New Executive Law § 77 defines key terms used in th e article, including “unfunded mandate” and “unfunded mandate reform pla n.” New Executive Law § 78 authorizes the Governor to s ubmit to the Legislature an unfunded mandate reform plan, and provides that not hing in this article prohibits or limits the authority of the governor o r legislature to repeal, revise or provide funding for unfunded mandates pur suant to any other lawful process. New Executive Law § 79 provides that an unfunded ma ndate reform plan shall set forth the Governor’s findings, a description of the unfunded mandates that he or she proposes to repeal or revise, a projection of t he anticipated costs and savings resulting from the plan, any other pertinen t information relating to the implementation of the plan, and a projected timetab le for the plan’s implementation. New Executive Law § 80 provides that the Governor m ay submit an unfunded mandate reform plan once each year no later than May 30 th , and that such plan must be voted on by the Legislature within 30 days.

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New Executive Law § 81 provides that certain progra ms and services shall not be considered unfunded mandates for the purposes of th is article. These include those programs and services: - that are required to comply with federal laws or rules or to meet eligibility standards for federal entitlements, so long as such mandates are not broader than federal eligibility standards; - that are imposed on both government and non-gover nment entities in the same or substantially similar circumstances; - which permit, establish or enable only optional p rograms or services; - which stem from failure to comply with previously enacted laws, or rules or regulations issued pursuant to a law; - which arise from a ruling by a court of competent jurisdiction; - which arise from an executive order of the govern or exercising his or her emergency powers; - which implement provisions of the State Constitut ion; - which are passed by a two-thirds vote of both the senate and assembly after a public hearing process; and - which are requested by a local government. New Executive Law § 82 is a severability provision. Section 2 adds a new Legislation Law § 54-c, which authorizes the Legislature to prescribe rules for the consideration and dispositi on of an unfunded mandate reform plan, as defined in Executive Law Article 5- A, by concurrent resolution. Section 3 is the effective date. JUSTIFICATIONS : Modeled on the Spending and Government Efficiency ( SAGE) Commission that was enacted into law as part of the 2011-12 state budge t (Chapter 62 of the Laws of 2011, Part E), this legislation creates a similar m echanism that would enable the Governor to propose the repeal or revision of u nfunded mandates that are imposed on local governments and school districts. Current and future state budget deficits have force d Albany to cut funding for education and health care, while local governments and school district face similar funding problems. In order to avoid property tax increases, it is cri tically important that the Governor and Legislature provide local governments and school districts with real mandate relief. This legislation provides a mechanism to enable the Governor to propose and the Legislature to consider real and substantial unfund ed mandate relief to local governments and school districts. LEGISLATIVE HISTORY : New bill. FISCAL IMPLICATIONS :

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No fiscal implications to the state. LOCAL FISCAL IMPLICATIONS : This legislation could have significant local fisca l implications by enabling the repeal or revision of unfunded mandates. EFFECTIVE DATE: Immediately upon enactment.

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APPENDIX B

AN ACT to amend the civil service law, in relatio n to authorizing local governments and school district to choose not to be subject to a certain state law The People of the State of New York, represented in Senate and Assembly, do enact as follows: Section 1. The civil service law is amended by ad ding a new section 209-b to read as follows: § 209-b. Collective bargaining; local option. (1) The legislature hereby gives and grants to ev ery local government and school district the right, power and authority to o pt not to be subject to paragraph (e) of subdivision 1 of section 209-a of the civil service law. (2) Any local government or school district may, by resolution duly adopted and filed with the secretary of state and the state civil service commission, determine that such local government or school dist rict shall not be subject to paragraph (e) of subdivision 1 of section 209-a of the civil service law. (3) Any such resolution adopted by a local govern ment or school district may be repealed in the same manner as it was adopted, a nd such repeal shall become effective upon filing with the secretary of state a nd the state civil service commission. § 2. This act shall take effect immediately.

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INTRODUCER'S MEMORANDUM IN SUPPORT

BILL NUMBER: SPONSOR: TITLE : AN ACT to amend the civil service law, in relation to authorizing local governments and school district to choose not to be subject to a certain state law PURPOSE OR GENERAL IDEA OF BILL : To allow local governments and school districts to opt-out of the Triborough Amendment. SUMMARY OF SPECIFIC PROVISIONS: Section 1 adds a new Civil Service Law § 209-b, whi ch authorizes any local government or school district to “opt out” of the T riborough Amendment by approving a resolution that effect and filing it wi th the Secretary of state and the State Civil Service Commission. JUSTIFICATION : The 1982 Triborough Amendment to the Taylor Law pro hibits a public employer from altering any provision of an expired labor agreemen t until a new agreement is reached. New York is the only state in the nation t hat imposes such a mandate on its local governments. This legislation authorizes local governments to ch oose to “opt out” of the state's Triborough Amendment. Authorizing local governments to “opt out” of the T riborough Amendment would enable those local governments and school districts that choose to do so to freeze salaries when a contract expires. Under curr ent law, employees get “step increases” based on their years of service and pay increases based on educational attainment. Giving local governments and school districts will give them greater options in dealing with employee bargaining units. PRIOR LEGISLATIVE HISTORY : New bill. FISCAL IMPLICATIONS : None to the state. It should provide savings to lo cal government that choose to “opt out” of the state's “Triborough Amendment” by having the effect of freezing employee salaries when a contract expires, rather t han allowing “step increases” to go into effect. EFFECTIVE DATE: Immediately upon enactment.

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APPENDIX C AN ACT to amend the general municipal law, in rel ation increasing and making uniform the project size over which separate contra cts on public work are required The People of the State of New York, represented i n Senate and Assembly, do enact as follows: § 1. Subdivision 1 of section 101 of the general municipal law, as amended by section 1 of part MM of chapter 57 of the laws of 2 008, is amended to read as follows: 1. Except as otherwise provided in section two hu ndred twenty-two of the labor law, every officer, board or agency of a political subdivision or of any district therein, charged with the duty of preparin g specifications or awarding or entering into contracts for the erection, const ruction, reconstruction or alteration of buildings, when the entire cost of su ch public work shall exceed [three] five million dollars [in the counties of the Bronx, King s, New York, Queens, and Richmond; one million five hundred th ousand dollars in the counties of Nassau, Suffolk and Westchester; and fi ve hundred thousand dollars in all other counties within the state,] shall pre pare separate specifications for the following three subdivisions of the work to be performed: a. Plumbing and gas fitting; b. Steam heating, hot water heating, ventilating and air conditioning apparatus; and c. Electric wiring and standard illuminating fix tures. § 2. This act shall take effect immediately.

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INTRODUCER'S MEMORANDUM IN SUPPORT

BILL NUMBER: SPONSOR: TITLE OF BILL : An act to amend the general municipal law, in relat ion increasing and making uniform the project size over which separate contra cts on public work are required PURPOSE OR GENERAL IDEA OF BILL : This bill amends the Wicks law to increase the thre shold to $5 million for all public construction projects throughout the state. SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends §101, subdivision 1 of the General Municipal Law by increasing and harmonizing the thresholds for public works con tracts across the State. Section 2 sets an immediate effective date. JUSTIFICATION : State law currently requires that separate specific ations be prepared and separate contracts be awarded for the plumbing, ele ctrical, and HVAC components of public construction projects when the total proj ect cost exceeds $3 million in New York City, $1 million in the downstate subur ban counties, and $500,000 in the remainder of the state. This bill would increase the threshold to $5 millio n statewide. The Wicks Law mandate has the effect of substantial ly driving up capital construction costs. Increasing the “Wicks Law” thr eshold will enable local governments and school districts throughout the sta te to better manage their capital construction costs. PRIOR LEGISLATIVE HISTORY : This is a new bill. FISCAL IMPLICATIONS : None to the state. Should provide savings to local governments by providing greater flexibility in options for contracting out public construction projects. EFFECTIVE DATE: Takes effect immediately upon enactment.

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News & Politics

Letter to NYS Mandate Relief Redesign Team