A small story this weekend in the New York Post spells out New York State’s big problem.  City municipal unions are waiting out Mayor Bloomberg’s term to renegotiate their contracts.  They would rather wait for a union-friendly Democrat than deal with independent Bloomberg.

Some of the unions are without contract now.  So how can they wait until 2013-’14 for a new one?  Don’t their members lose all negotiated guarantees?

The answer is no.  Not in New York State.  And therein lies the problem.

Under New York’s Taylor Law – specifically its Triborough Amendment – the benefits provided in public service union contracts remain in place until a new contract is signed.  Even after a contract expires.  That includes “step” salary increases.

So why on earth would union leaders negotiate for anything less than what they already have? They should always hold out for more, which is what they do.  It’s why we have exorbitant benefit packages – like cosmetic surgery for Buffalo teachers – and pension rules that allow workers to calculate final-year overtime in retirement pay.  Every time contracts are renewed, the benefits gets sweeter, and there is no law – rather it is illegal under current law – to claw them back.

These rules apply not just to state workers, but to county and municipal workers in towns and villages across the state.  The municipalities have to pay and pay – with pension costs being the most expensive element – and their only recourse heretofore has been to raise taxes.  But now, with a citizenry taxed to the max, they are forced to cut — waste at first, but eventually programs that people have come to rely upon.

Taxing the “rich” will not cure this spiral.  The “rich” are only so rich — even if you robbed them they wouldn’t have enough money to fix the problem — and besides, they can move to different states, which many have. New labor contract rules are the answer.  It is a necessity. Because today’s system is rigged.