How Good Budget News Was Bad for Bloomberg

When a deal was reached Feb. 11 on the Federal stimulus package that ultimately gave the city a sizable share of the nearly $25 billion in aid going to the state, Mayor Bloomberg was of two minds.

As one labor leader put it last week, "He holds a press conference at the airport saying we got a boatload of money, and the same day he tells [Labor Relations Commissioner Jim] Hanley to tell the MLC that he's raising his demand from $200 million to $550 million."

He was referring to the Mayor's goal for labor concessions presented to the Municipal Labor Committee, which is currently negotiating with Mr. Hanley on possible changes in health coverage for city workers.

 

 

PRESSURE REDUCED FOR UNION CONCESSIONS: State Sen. Diane Savino (left), who has been criticized by Mayor Bloomberg and tabloid editorial writers for opposing a less-generous pension plan for future workers, said the city could make a more-compelling argument that its workers should shoulder a portion of their health-costs, just as their state counterparts do. But Detectives Endowment Association President Mike Palladino said the significant aid to the city from the stimulus bill gives the unions the latitude to try to 'save the city money without affecting our members.'

Found Money, Lost Leverage

The paradox of the Mayor's upping the ante on union concessions was that he did it at the same time that the Federal Government had patched some ugly holes in Mr. Bloomberg's proposed budget. And in doing so through targeted spending, which among other things prevented massive Teacher layoffs and required additional police hiring, the Feds took away much of the Mayor's leverage in negotiating with the unions.

Aside from the Department of Education layoffs which have gone by the wayside, the proposed city budget planned about threequarters of the other 8,000-plus job cuts to be accomplished by attrition. The couple of thousand layoffs that still loom would be unsettling for District Council 37, which figured to be hardest-hit, but it was tough to figure how they would create enough urgency among the unions as a whole to result in major concessions on health benefits.

That may have been why, Detectives Endowment Association President Mike Palladino said, "there was a sense of urgency on the city's part to get a deal done" before the stimulus money was determined.

"It was the perfect storm for the city, but a big part of that storm has blown out to sea," he said Feb. 19.

"When the city was coming with an empty bucket asking for the unions to fill it," he continued, "my feeling was, let's see how much the bucket is going to be filled by the stimulus. The validity of [the city's] argument has lost a little bit of its steam."

Mr. Bloomberg has proposed two big-ticket items, although one of them, a reduced pension plan for all future workers, offers virtually no immediate savings to the city and the largest share of its long-term benefit would come a decade or more down the road. The other plank in his platform would provide immediate as well as recurring savings: the requirement that employees pay 10 percent of their health premiums.

"He's effectively pitting the public sector outside the city against the municipal unions," said State Sen. Diane Savino, the chair of her body's Civil Service and Pensions Committee. Although she has lately been involved in a running battle with the Bloomberg administration on its Tier 5 pension proposal, she said it was likely that a healthbenefits change was the Mayor's primary objective, and for reasons that went beyond short-term budget relief.

Primary among them is that the pension issue has little resonance for state lawmakers, no matter how much the tabloids have flogged it over the past couple of weeks.

Fire Disability Rise Overblown

On Feb. 8, the Post reported that 72 percent of the 2,219 Fire Department retirees since 2004 had been granted disability pensions, compared to just 19 percent of the NYPD retirees covering the same period. Although the discrepancy seemed shocking, it isn't. As the article noted, in 2000, 62 percent of those firefighters who retired qualified for disability pensions, and the relatively small rise since then was no surprise given the number of them who logged long hours at Ground Zero on 9/11 and the months that followed.

As Uniformed Firefighters Association President Steve Cassidy noted in a Feb. 15 letter to the Post responding to that article and a follow-up editorial entitled "Inside Pension Bloat," the New England Journal of Medicine reported that more than 10,000 firefighters "lost, on average, 12 years of lung capacity as a result of the rescue and recovery operation at the World Trade Center… Being a New York City firefighter continues to be one of the most dangerous jobs in America."

The Daily News editorial page has focused its offensive on Senator Savino, making her the centerpiece of two editorials on the pension issue, the second one entitled, "Union maid."

However sneering the tone of them was, given that Ms. Savino's Staten Island/western Brooklyn district is chock full of civil servants, the editorials offered the kind of positive political advertising she never could have achieved through campaign ads.

'Tier 5 Won't Close Gap'

"They're effectively using the editorial boards, which have always had an animosity toward the public sector," she said. "But while we're going to have to make some really difficult [budget] decisions no matter what, in spite of the stimulus money from the Federal Government, Tier 5 doesn't get you there."

Spokespersons for the two largest state employee unions, the Civil Service Employees Association and the Public Employees Federation, said state officials have not pushed the pension change hard in recent discussions, and they would not be receptive if they did.

"Our position hasn't changed," said PEF spokeswoman Darcy Wells. "We're not going to re-open contracts or agree to a giveback like [Tier 5]."

Her counterpart at CSEA, Steve Madarasz, said of Governor Paterson's negotiators, "I think it's hard to tell where their priorities lie at this stage."

Health-Benefits Disparity Real

If the proposal is not making headway with state unions, it's hard to see how a bill covering city workers alone would gather any momentum. The place where Mr. Bloomberg, as Ms. Savino alluded to, could make an equity argument is in the area of health benefits.

CSEA and PEF members in nearly all cases pay 10 percent of their health-care premiums for individual coverage, and 25 percent for family packages. In contrast, city workers pay none of their basic health-care costs. That was why the agreement by Transport Workers Union Local 100 in 2006 to have members pay 1.5 percent of their earnings toward health coverage sent shock waves through the municipal labor movement. The opening of that door invited the Mayor to make the case that city workers should not be the only hold-outs among public employees statewide, given the rise in health-care costs and the city's budget woes.

MLC Chairman Harry Nespoli is supposed to meet with Mr. Bloomberg personally on how much aid the city is likely to receive from the state and Federal Governments Feb. 25 and then resume health-benefit negotiations with Mr. Hanley the following day. "It's our job to come up with something that will generate savings and relieve the City of New York of some of their obligations," he said last week, but declined to be more specific.

'Save Money, Don't Hurt Members'

Mr. Palladino surmised, "I think we'll come up with something that can save the city money without affecting our members," which seemed to rule out employee health-care contributions.

One possibility is to agree to the Mayor's push for an elimination of permanent health-care coverage for those with at least 10 years in government, a Giuliani administration measure that primarily benefits political appointees rather than career civil servants. But that doesn't offer nearly the savings Mr. Bloomberg has set as his goal from union "contributions."

On the other hand, there's not much he can hold over the unions' heads, aside from some pungent newspaper editorials if they don't knuckle under. The stimulus money removed the scent of disaster around the bend and rendered the budget proposal he released less than a month ago obsolete.

At the same time, another political reality has come into focus: Mr. Bloomberg's re-election bid is looking like something other than a slamdunk, even as he tries to corner the market on campaign consultants. Even before a Marist College poll released Feb. 20 showed the Mayor's approval rating was just 52 percent- down about 20 points from a short time earlier—it was reported that he was having trouble getting city Republicans to allow him to run as their standard-bearer. There was left-over bitterness from when he cast his lot as an independent two years ago while leaving them parched in their thirst for patronage over the preceding five years.

Tough Spot for Unpopular Moves

He faces a backlash among a significant segment of the population over the high-handed way that he nullified two previous referendums on term limits to gain the right to seek a third term. And he is asking City Council Members, whose necks are alongside his on the block and lack his money to buy their way back into the voters' good graces, to approve such sure-fire vote-getters as disbanding a dozen fire companies and discontinuing night tours at four others.

All those factors explain why the unions seem no more unsettled by the prospect of unflattering editorials than Ms. Savino has been. Mr. Palladino put it this way: "It's unfair to be coming after labor when Wall Street was still paying those huge bonuses even with the stock market down 30 percent in the last year."

If the stimulus package hadn't been so generous to New York, the budget situation would have been desperate enough that the fear of massive layoffs could have broken down union convictions that they shouldn't be taking the greatest weight for the financial industry meltdown. But the Obama Administration, with the guidance of the city's congressional delegation, has paid its first big dividend for public workers here by removing the urgency for their unions to capitulate.

Mr. Bloomberg is likely to come away with something, but with the city off the critical list, it's unlikely the unions will be donating any major organs.

Editor's "Razzle Dazzle" Column RSS feed