Road To Municipal Labor Settlements Paved With Uncertainty

There was a distinct edge to Mayor Bill de Blasio’s voice when he said during his budget presentation, “The previous administration was given an artificially high level of credit for management.”

He was referring to the labor-contract mess he inherited when Michael Bloomberg left office after a third term in which he created a negotiating logjam. Following his 2009 re-election Bloomberg insisted that the city could not afford to honor a bargaining pattern he had set the previous two years, under which more than half the city’s workforce had already received two annual 4 percent pay raises. It seemed out of character for a man accustomed to criticizing other government officials who postponed tough decisions by “kicking the can down the road,” but it’s his successor’s problem now.

And for the moment, neither de Blasio nor most union leaders can do very much about it. A binding arbitration proceeding involving the New York State Nurses Association is likely to produce an award sometime this spring that will produce the 4 percent raises also being pursued by the United Federation of Teachers; it will also affect unions for those smaller employee groups that didn’t get contracts before Bloomberg closed the pay window.

Much less certain is whether those raises will be applied with full retroactivity dating back to the end of previous union contracts. In the case of the UFT, that would mean back pay dating to Nov. 1, 2009, and totaling $3.2 billion. Throw the other unions into that situation and the tab rises to about $4 billion.

Until that issue is decided—plus a key issue as to whether the city can legally defer part of the payment or must dole it out in its entirety in the fiscal year that begins July 1—there’s no way to know how much money will be available for the entire municipal union universe, most of which is working under contracts that expired during the latter half of 2010.

The amount of money available to settle the labor contracts doesn’t figure to be much, especially considering the likelihood that the UFT and NYSNA won’t get shut out completely on retroactivity, given its being a component of city wage deals and arbitration awards for close to a half-century. And even if the city’s budget surplus continues rising between now and the end of June, de Blasio cannot afford to be overly generous in that “new” old round of bargaining. He has to be mindful of another pattern covering the same round: the three-year wage freeze Gov. Andrew Cuomo strong-armed the state’s unions into accepting between 2011 and 2014 in return for a commitment not to lay off up to 10,000 workers.

The city doesn’t face the kind of financial problems Cuomo confronted when he took office, and its unions are sure to make that point when they go to the bargaining table. There has also never been a clear linkage between state and city contracts. But de Blasio—who in his bruising battle with Cuomo over prekindergarten funding has already gotten a taste of what happens when you tug on Superman’s cape—doesn’t figure to want to further antagonize him by granting raises in the neighborhood of 4 percent in this round. It would make it too easy for the governor to argue that the city must not need future state aid if it has all that money to throw around.

That’s why during the budget speech de Blasio sounded more than a bit like his predecessor in talking about the need for unions to offset the cost of raises by finding equivalent savings. The most likely place would be in the area of health benefits: Unlike state workers, who now pay 16 percent of their health premiums after the Cuomo shakedown, and transit workers, who pay a much smaller share, municipal workers pay nothing toward their basic coverage.

They are likely to resist starting now. But because Bloomberg deferred dealing with a bargaining problem that grew with time, and due to the lack of earlier action to offset the cost of those leftover raises, de Blasio has little choice but to try to pull them across that particular line in the sand.

Richard Steier is editor of The Chief, a civil service newspaper, and the author of the recently published Enough Blame to Go Around, about the struggles of New York City’s public employee unions.