Mayor Freezes Hiring
Unions Mixed On Call for Cutbacks

By MEREDITH KOLODNER

Mayor Bloomberg last week imposed a citywide hiring freeze and directed all agencies to cut their current budgets by 2.5 percent and next year's by 5 percent, citing a drop in Wall Street profits.

RAGLAN GEORGE: 'We're prisoners of Wall Street.'

Some union leaders responded to the announcement with a wait-and-see attitude. Others called it "responsible" and still others objected that city workers and residents should not pay for a crisis on Wall Street.

Waiver for Safety Jobs

Commissioners have been asked to submit revised budgets by Nov. 19. Layoffs and cuts to services have not been ruled out. The Mayor has ordered agencies to only fill positions related directly to public health and safety until he approves each agency's cuts.

Most unions have settled contracts that last for another one to three years, but some, such as District Councils 37 and 1707 and the Council of School Supervisors and Administrators, are currently in negotiations.

"I don't understand this, because we've got such a surplus," said DC 1707 Executive Director Raglan George Jr. "We have allowed Wall Street to run our country too much. Maybe the guys making all the money should pay more so working people don't have their services and their jobs cut."

GREGORY FLOYD: Mayor acting responsibly.

The city ended fiscal year 2006 with a record $4.4 billion surplus. The Mayor's budget director reduced revenue projections for this fiscal year, which ends June 30, 2008, by $238 million, growing to $577 million the following year.

'06 a Boom Year

Wall Street was awash in record profits of $20.9 billion in 2006. Firms also paid out record bonuses of more than $24 billion last year, which surpassed a record set the year before of $20.5 billion, according to a report by the State Comptroller's Office.

This year, however, in part due to a nationwide credit crunch, profits on Wall Street are expected to decline to about $14.8 billion. One result is a $250-million decrease in expected city revenue from real-estate transactions and a $100 million reduction from personal income and business taxes this year. The city does, however, expect an extra $100 million it hadn't forecast from hotel and sales taxes.

'237': 'Doing Right Thing'

Teamsters Local 237 President Gregory Floyd asserted that the Mayor was being prudent, especially in the face of the home mortgage crisis. "He's doing the right thing, exercising fiscal responsibility to ensure that New York City is in good financial shape going into the future," he said. "If the sub-prime mortgage situation doesn't affect New York, then he can reinstitute hiring and we can move forward. It's a better-safe-than-sorry approach, which at this point I can't really criticize him for."

Although the city currently has a surplus, officials project a $2.7-billion budget shortfall in fiscal year 2009 if the current tax and revenue picture stays the same. That estimate is almost $1.2 billion more than what they had anticipated during the summer. Even then, before the mortgage crisis hit Wall Street, Mr. Bloomberg warned that while the city would continue to see growth in the outlying years, it would be at a slower pace.

Officials indicated that the current situation was not cause for panic and that they envisioned a slowing of the economy rather than a serious downturn. They noted that Wall Street brought in almost 9 percent of city tax revenues and generated 23 percent of city wages, although it accounted for only 5 percent of the total number of jobs.

DC 37: No Impact Yet

A spokeswoman for District Council 37, which is currently bargaining for a contract that would go into effect next year, said that the union never discusses negotiations in the press. But she added that it was waiting to see the outcome of the cutbacks. "Right now this is a management exercise," said Donna Silberberg. "We have yet to see what comes up. We will monitor this closely, as we always do, on behalf of our members and take appropriate action if and when it's required."

Mr. George said that he hoped that the new conditions would not have an impact on his union's contract negotiations and that the city would live up to its commitment to grant his members the same increases DC 37 received in the last round of bargaining. He argued that in light of the real-estate development projects being built and the new stadium planned for Brooklyn, the city should look into directing more of that revenue towards social services.

"We are still waiting for a Mayor to come along who will say no more cuts to child-care, no more cuts to senior services," Mr. George said. "So far we haven't found one."