Unsettled Teacher Contracts Could Raise Cost of Universal Pre-K

During his back-and-forth with the state Legislature's Joint Fiscal Committees on Monday—pitching the merits of his proposed universal preschool and after school programs—Mayor Bill de Blasio listened while state Sen. Diane Savino expressed shock that his predecessor, Michael Bloomberg, left him very little in the way of reserve money to negotiate long-expired municipal labor contracts. When Savino, who chairs the Senate Labor Committee, suggested that de Blasio use the labor contract conundrum to bolster his case for a tax increase on high-earning New Yorkers to pay for the preschool and after school programs, the mayor demurred.

"Some observers have tried to somehow combine this initiative with the challenges we face with the ongoing labor dynamics. These are two ships passing in the night; people who want to have an honest discourse have to acknowledge that," de Blasio said. "What we need to do to invest in education, to build new capacity to bring us into the 21^st century, is entirely separate in the lockbox just for new pre-K and after school capacity. It has no connection by structural architecture to the huge challenge we are dealing with the labor contracts."

While the mayor was correct in his assertion that the proposed tax hike is indeed a dedicated tax to solely fund the universal preschool and after school program, some fiscal experts say there is actually a significant connection between the overall cost of de Blasio's signature policy platform and the labor contract uncertainty.

The mayor's implementation plan for universal preschool states that 13,845 new full-day pre-K seats will be spread across public schools and community-based-organizations contracted with the Department of Education. That influx of new seats could mean a windfall of jobs for unions such as the United Federation of Teachers, the city's teacher's union, and District Council 1707, which represents some of the CBOs that the program would utilize. With those additional jobs come potentially significant salary and fringe benefits increases, dependent on the course of collective bargaining negotiations.

"I don’t think it’s possible to separate the [expired labor contracts and universal preschool]," said Nicole Gelinas, a Manhattan Institute Fellow, who writes about municipal finance, among other topics.

"We really need to know how we’re going to control compensation at the teacher workforce. If we’re not going to control it, we need to know that before we can really budget for pre-K."

The UFT's approximately 80,000 teachers have been working without a contract for the last four years, with salaries frozen since their last contract expired in October 2009. The Department of Education currently spends nearly $192 million annually on its current preschool programs, with roughly 97 percent of that allocation going to salaries and fringe benefits for lead teachers and teaching assistants. The mayor's proposed universal preschool program is budgeted at $340 million—with $97 million dedicated in the first year to start-up infrastructure and "costs required to upgrade program quality"—but his office has yet to provide a full breakdown of the costs, and it is unclear if that assumes that teacher salaries and benefits will remain at 2009 levels.

A spokesman for the mayor disputed the premise that the unsettled teacher contracts could potentially affect the overall cost of the program. The salary and benefits picture becomes even murkier with the teachers and workers at DOE-affiliated CBOs, some of whom are represented by DC 1707, whose contract with the city expired in March 2006, three years prior to the UFT's. Salaries for CBO teachers have fallen dramatically behind their public school counterparts, creating the potential for a raise in contract negotiations, which could further balloon the cost of universal preschool.

"I would think that it’s in everybody’s interest to make sure that the teachers are adequately compensated and that there’s some relationship between the pay for the pre-K teachers and entry-level workers in the school system," said James Parrott, deputy director and chief economist at the Fiscal Policy Institute. "You want to make sure that if you’re really talking about a quality system that these workers have adequate pay and benefits."

Until the mayor's office or Department of Education releases more details on how they plan to staff the universal preschool program and which unions they will pull from to hire teachers, the total cost of the program will remain vague. A UFT spokesperson declined to comment on the mechanics of the mayor's universal preschool program, saying only that they support "high-quality instruction."

Representatives for DC 1707 did not immediately respond to a request for comment. Mayor de Blasio has thus far declined to show his hand as to how he might approach collective bargaining negotiations with the city's unions. Perhaps, as some labor insiders have suggested, the teachers' unions might be inclined to accept lower retroactive raises because of the large number of jobs and new teachers added to their membership. But by firmly declaring his preschool program and the municipal labor situation to be mutually exclusive, de Blasio has potentially opened himself up to criticism if retroactive raises for teachers beget a higher price tag for universal preschool.