Unions Muster Up After Pension Bushwhacking

Unions Muster Up After Pension Bushwhacking

Peter Abbate was among those caught by surprise when Governor Paterson June 2 vetoed what seemed a routine extension of Tier 2 pension benefits to future cops and firefighters statewide.

"That shocked me," the Chairman of the Assembly Government Employees Committee said during a June 10 interview from Albany, and he called a member of Mr. Paterson's staff seeking an explanation for the lack of a heads-up.

"I didn't get an answer," Mr. Abbate said, which led him to ask whether the Governor had at least notified the unions whose future members would be directly affected.

He said the Paterson aide, whom he would not identify, replied, 'No. That might've been a good idea.' ''

A Collaboration With Mayor

Which perhaps puts some of last week's battle royal over control of the State Senate in context. If anarchy seemed to have taken hold in the state capital, it may have been a byproduct of the scrapping of normal protocols by those viewed as the grown-ups in the room—the Governor, and the man who more than a few union officials believe was his alltoo eager partner in the pension ambush, Mayor Bloomberg.

The Chief-Leader/Adrienne Haywood-James 'SET US BACK DECADES': Uniformed Firefighters Association President Steve Cassidy, flanked by Uniformed Sanitationmen's Association President Harry Nespoli (left) and Patrolmen's Benevolent Association leader Pat Lynch, criticizes Governor Paterson's veto of a Tier 2 extender bill that he said would hurt recruitment and public safety and could leave cops' and firefighters' survivors without death benefits.

One of them, who spoke on condition that he not be identified, voiced doubts that it was a coincidence that the veto was issued just a few hours after the press conference in which the Mayor and city union leaders announced a deal that is expected to produce $1 billion in health-benefit savings over the next six years. That accord included a provision under which 1,000 layoffs scheduled for July 1 were put on hold at least through the end of September.

The police and fire unions were under no pressure to agree to the new hospital co-pays as a way of averting layoffs, since their members' jobs were not on the line—in fact it is expected that as many as 750 new cops will be entering the Police Academy next month. And so it was with them particularly in mind that Municipal Labor Committee Chairman Harry Nespoli spoke during the settlement press conference at District Council 37 headquarters about how pleased he was with the sense of "unity" that produced the deal and at least postponed the layoffs.

Those same union officials couldn't be blamed for feeling sandbagged when they learned that evening that with their consent for the health deal tucked neatly away, the Governor had just taken a bite out of the pension rights of their future members, and been praised by Mr. Bloomberg for a "gutsy decision."

Amid the tumult that followed, there was confusion about what the pension status would be for those soon-to-be new hires if the Legislature didn't override the veto.

Some union officials protested that new members would be stuck without a pension tier. One veteran official said that this wasn't true—that new cops and firefighters would merely be placed in the old Tier 3 system. But Assemblyman Abbate said it was his understanding that this would be true only "on the state level; we're not sure on the city level."

It was not clear why the law creating Tier 3 33 years ago or the series of Tier 2 extension bills that had been passed every two years beginning in 1981 would make a distinction between cops and firefighters employed by the city and those employed by the state and other municipalities—if in fact it does.

Still Lose Key Rights

But even if new city cops and firefighters could be placed under Tier 3, rather than being subject to the Tier 5 legislation that Mr. Paterson is seeking to extend to employees beyond those represented by the two largest state-employee unions, it would be a downgrade from Tier 2.

Instead of retaining the long-held right to retire after 20 years at half-pay, cops and firefighters if placed under Tier 3 would have to work for 22 years to qualify for a full pension. They would also not be entitled to the automatic cost-of-living adjustment granted to other city and state pensioners unless they worked for 25 years, in which case they would wind up with a more-generous COLA than anyone else, since it would be based on their full retirement allowance, rather than the first $18,000 of that amount.

A shift to Tier 3 would also cause a reduction in the accidental death-benefit rights of police and fire surviving spouses, which currently gives them, combined with Social Security benefits, the equivalent of their spouse's final salary each year for the rest of their lives. And cops and firefighters under Tier 3 who sought disability pensions would have to sign away their rights to any additional benefits for which they would have been eligible if it was later found that they had ailments—including cancers, heart and lung disease or the AIDS virus—that could be presumed to have been contracted as part of their work.

Those reductions, of course, aren't even the worst of what's looming. The Mayor means business about getting a Tier 5 bill for all new city workers—and the one city union whose layoff worries approach those that led the Civil Service Employees Association and the Public Employees Federation to make their pension deal with Mr. Paterson, DC 37, doesn't offer anywhere near the long-term sav- ings that could be gotten if future cops and firefighters were included in the legislation.

Not Worried About Recruitment

He also seems convinced that the rollback in pension rights this would entail—most notably, requiring them to work at least 25 years and be at least 50 to collect a full pension—will not create the kind of recruiting nightmares the NYPD encountered after starting salary for Police Officers was cut to $25,000 four years ago.

It might be argued that Uniformed Firefighters Association President Steve Cassidy was speaking from selfinterest June 11 when he said at a rally outside a birthday fund-raiser for Mr. Paterson, "The Governor with the stroke of a pen has set firefighters and police officers back decades."

But the recent past history in the NYPD suggests that Mr. Cassidy and PBA President Pat Lynch are taking a longer, wiser view than the Mayor and the Governor. It was at Mr. Bloomberg's insistence that an arbitrator in June 2005 sharply reduced the cost to the city of relatively generous raises to incumbent cops by slashing the pay scale so that new hires would start at just $25,000 and over their first six years on the job receive $48,000 less in salary than they would have previously.

Shortly after that settlement was announced, Deputy Mayor Marc Shaw was asked whether the administration was worried about being able to recruit candidates for the first police class that would be affected by the marked-down pay plan in January 2006.

"We'll see in January," Mr. Shaw said with a shrug.

Saw With a Vengeance

Come January, however, he had left the administration, and the NYPD found itself with a major recruiting problem, one it didn't solve until last year, when the city finally brought starting pay up to $40,000. It offset the cost of doing so by reducing benefits in other areas, the kind that don't get mentioned in tabloid headlines or editorials. And so maybe Mr. Bloomberg believes potential recruits won't figure out that under Tier 5 their pension benefits would get trimmed six ways to Sunday, from the loss of $12,000 a year in Variable Supplements money and cost-of-living adjustments to the requirement that they work five years longer and be at least 50 to collect a full retirement allowance.

Mayoral spokesman Marc La- Vorgna said June 9, "Tier 5 we do believe is extremely needed, but even with the change in [pension] benefits the total package would far outpace anything you'd find in the private sector."

He continued, "What the Governor did was a bold, gutsy step that put Tier 5 at the forefront of the conversation."

But as with the 2005 PBA arbitration and the scuttled deal for a West Side football stadium that did not include plans for a single additional parking space, the administration may be confusing its hopes and needs with reality.

Override Looks Unrealistic

The police and fire unions didn't have that luxury, and so even as they furiously lobbied state legislators about a possible override of the Tier 2 veto, several of them conceded that the best they could likely expect was to get a different piece of legislation that chipped around the edges of the Tier 2 plan to minimize the impact on future members.

"We're not asking for anything more," Detectives Endowment Association President Mike Palladino said at the rally outside the Governor's fundraiser in the Mandarin Oriental Hotel. "We just wanna keep what we have."

The series of meetings that more than 40 police and fire union leaders had with legislative leaders and Paterson counsel Peter Kiernan last week, coupled with the rally, he said, were meant to spark "the genesis of some type of reasonable thinking."

Something along the lines of whether long-term changes with potentially dramatic impact on recruitment are an appropriate response to what may be a short-term financial problem, for the pension systems as well as the local economy. As UFA Manhattan Trustee Dan Murphy put it, "If Wall Street wasn't broke, we wouldn't be here now."

From a bargaining standpoint, Mr. Paterson's veto of the Tier 2 extender probably seemed smart: if he wanted to convince people he was serious about Tier 5 for the entire workforce, he couldn't simply give a pass to the police and fire unions.

Layoff Worries Tipped Balance

But the only part of the labor movement that is willing to stick its future members with an inferior retirement plan consists of unions which consider that a lesser poison than accepting thousands of layoffs. There is talk that the New York State Correctional Officers and Police Benevolent Association, about 2,000 of whose members could lose their jobs next month, is discussing signing on, but in return for $30,000 buyouts rather than the $20,000 negotiated by the two largest state unions.

City union officials, who have coped with both layoffs and the threat of them far more often than their state counterparts, are more inclined to call management's bluff rather than signing away the future of their "unborn."

"If they threaten you with layoffs, go ahead and lay them off," said one veteran official whose union is wrestling with that question. "The people who are gonna suffer are the politicians making the layoffs—the public isn't going to stand for the cutback in services."

Bill Henning, a vice president of Communications Workers of America Local 1180, said that beyond the pragmatic aspects of the issue—which include the fact that those who are laid off can't vote their leaders out of office while those whose benefits are cut can—is something more fundamental to the labor movement.

'If We Cave, Who Needs Union?'

"We are caretakers, presumably handing down a better set of conditions to the next generation," he said. "The more we capitulate, the more we call into question, 'Why bother with the union?' ''

And Mr. Henning's union is among those that could have to deal with layoffs. The police and fire unions know that isn't going to be an issue for them, which means both the Governor and the Mayor have minimal leverage in trying to get them to accept Tier 5. It is primarily the looming loss of Tier 2 for their new members, and the provision that would place them into the all-but-forgotten Tier 3 of the system (most members of that tier were transferred into Tier 4 more than a quartercentury ago as a result of a Social Security related change) that has them seeking a more-palatable alternative.

The chances of overriding the Governor's veto were never great, several union officials said, given the reluctance of Democratic legislators to embarrass Mr. Paterson on an issue that has been one of the few where his actions have drawn editorial praise. Republicans in the State Senate, with whom the police and fire unions have historically had warm relations, would have been likely allies in such an effort, but their seizing control of that body last week almost certainly scuttled any hope of a bipartisan push to muster the two-thirds majority needed.

Can Governor Take Step Back?

Ironically, though, the harsh words that tabloid editorial writers heaped on Mr. Paterson for not being able to head off or resolve the Senate free-forall served as a reminder to him that his pension derring-do was not going to make him their model of a modern major Governor. And so, by extension, there is not that much to be lost if he can work out some kind of compromise with the unions that offers meaningful change without cutting the guts out of a retirement package that is one of the best recruiting tools police and fire departments throughout the state have at their disposal.

As one union official put it, if the Governor vetoed the extender thinking it would force the police and fire unions to fall into line on Tier 5, "They didn't think it through. The only thing they got was firefighters and cops throughout the state outraged. I think they're looking for a way out, and they don't know which way to go yet."