Today a Federal Judge ruled that Governor Paterson's furlough plan for state workers was unconstitutional. So, it's back to the drawing board for Paterson as he tries to close the massive state budget gap.
A federal judge on Friday halted attempts by New York's governor to impose furloughs on about 100,000 state workers and withhold their raises.
U.S. District Judge Lawrence Kahn had temporarily blocked the furloughs two weeks ago. His new preliminary injunction bars Gov. David Paterson and lawmakers from submitting or enacting short-term funding bills with those provisions.
The unions went to court, arguing the cost-saving moves changed the terms of their negotiated contracts in violation of the U.S. Constitution. One-day-a-week furloughs were part of one emergency spending bill approved by the Legislature, though the Senate also passed a resolution criticizing the plan. Raises have been withheld in several of the emergency bills, which are being used each week to keep the state running until a budget is finalized.
New York's budget was due April 1, but Paterson and lawmakers have been at odds trying to close a projected $9.2 billion deficit. Paterson said furloughs would save $30 million a week.
Lawyers for the Paterson administration told Kahn there would be no irreparable harm since the furloughs would be used for eight weeks and the 4 percent raises would be paid out later, once a budget is enacted.
Gov. David Paterson expressed disappointment in the ruling. But he also pointed out that Khan recognized the state's dire fiscal situation.
"In his ruling, however, the judge did not agree with the unions' position that the State is not experiencing a fiscal crisis," Paterson said in a statement. "The State is facing severe cash flow difficulties, and I have withheld or delayed payments to schools, non-profits, contractors and others in order to prevent the State from running out of cash.
But Kahn said union lawyers showed workers would be harmed by the 20 percent loss of wages from furloughs, even for a limited time, and from failure to pay raises negotiated years earlier and which workers were relying on. He said there was no such harm from the short-term lack of state payments to union benefit funds.
He said in his order Friday that he is not saying the state can't take steps to address a fiscal crisis, but he doesn't believe these particular measures would be upheld.
"That the state's current financial situation is precarious ... is not doubted," Kahn wrote. He acknowledged that fiscal emergency constitutes a legitimate public interest that could warrant contract impairments, but the steps have to be both reasonable and necessary. These were not, he ruled.
"The court cannot ignore the conspicuous absence of a record showing that options were actually considered and compared, and that the conclusion was then reached that only the enacted provisions would suffice," Kahn wrote. The administration failed to show it considered alternatives that don't require the extraordinary step of breaking contracts, he said.