Inside the Capitol

Friday, July 24, 2009

7-29 Public Workers Will Fight Another Day

Syndicated Columnist
SANTA FE -- As predicted here early this month, the state's public employees were denied a request for a temporary injunction prohibiting public employers from adding an extra 1.5 percent increase in their retirement contributions.
The 2009 Legislature, early this year, decided to cut public employer contributions to employee retirement and add it on to employee contributions. It will save the state around $43 million this year.
The legislative action affects all 57,000 public employees at the state and local levels of government, including education employees in public schools, colleges and universities. Their pay for next year will be 1.5 percent less.
It seemed evident when the hearing on the temporary injunction was postponed from its June 29 setting that the state district court didn't see a need for temporarily stopping the pay cut that would begin on July 1.
The actual hearing on the merits of the case will be scheduled for a later date. Although the public employee unions involved in the suit can point to some constitutional questions the legislation raises, Judge William F. Lang indicated he feels the proper place to resolve the differences is the Legislature.
That's a good indication of how the hearing on the merits of the case is likely to be decided. Public employees have heard that message and are gearing up for some heavy-duty lobbying of lawmakers.
Don't be surprised to see an effort made to get it on the agenda for the possible special session of the Legislature this fall. The session will be necessary if August revenue projections indicate revenues sagging even more than anticipated during last winter's regular legislative session.
It is widely expected that will happen, however at this point legislative leaders are said to be shying away from a special session, possibly because so many special interest groups are applying pressure to put additional items on the agenda.
A monkey wrench thrown into the works following the hearing on the preliminary injunction has been a news release from the Attorney General's office announcing that Judge Lang granted the attorney general's motion to dismiss the case entirely.
During the two days following the attorney general's announcement, I have been in contact with the office seeking a clarification of the statement.
As of the time this is being written, there has been no clarification or retraction of the announcement. I understand that other news sources are now in contact with the attorney general's office so that may get clarified by the time you read this.
The public employees make the point that they are being subjected to discriminatory treatment because employees in the private sector are not subject to the pay deduction. While that is true, no public employee has been subject to a job loss, furlough, wage cut or loss of benefits as have many private sector workers.
That would seem to put public opinion on the side of the lawmakers who decided on the pay cut. But lawmakers are due some embarrassment themselves. They neglected to cut their own retirement contributions by the state and add it on to their contributions. That's an issue that is likely to arise the next time they meet.
As for the public employee cuts, lawmakers said it is the least painful alternative to find another $40 million to balance the state budget. The state employees' union has constantly advocated that twice as much revenue can be gained from making big out-of-state corporations pay their fair share in taxes to the state.
Because New Mexico doesn't require something called "combined reporting," these companies can hide their New Mexico income by reporting it in states that charge a lower corporate tax.
Maybe docking public employees is less painful than disappointing big corporate lobbyists but it shouldn't be. Local businesses are hurt too. Maybe some of the $80 million the state should be getting from the big boys could be used to lower taxes on local businesses.
WED, 7-29-09

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail)



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