The new mayor will have to work fast to confront a looming deficit of $2 billion and
300,000 city workers demanding $7 billion in retroactive pay.
As the first Democratic mayor in 20 years for the nation’s largest city prepares to take office, headaches from the previous administration threaten to make the new mayor’s first days in office cantankerous and problematic.
New York City’s 300,000 municipal workers have been working without a contract for as many as four years and are currently demanding more than $7 billion in retroactive pay for unpaid regular raises. With the city facing a $2 billion deficit next year, the situation is creating a dilemma for Bill de Blasio, who won office last week in a landslide.
Outgoing Mayor Michael Bloomberg rejected calls from the city’s 152 bargaining units to guarantee the raises, which the Bloomberg administration felt was a luxury in light of shrinking municipal reserves. This led to the unions refusing to negotiate with Bloomberg further, opting to wait for the next mayor. But when asked which side actually triggered the stalemate, not surprisingly, both sides blamed the other. The unions assert that Bloomberg gave them a take-it-or-leave-it offer for a multi-year pay freeze; the administration states that the unions made no counteroffer.
“The municipal unions made a decision that they would rather wait for the next mayor than try to resolve their contracts with Mayor Bloomberg,” said Carol Kellermann, president of the Citizens Budget Commission, a business-backed fiscal watchdog. “O.K., now they have their new mayor. They’re asking him for a lot of money, no matter how you slice it, but nobody thinks that amount of money is available.”
The United Federation of Teachers, for example, is requesting more than $3 billion in retroactive pay for the four-percent raise it argues other municipal unions received in 2008. The union has been without a contract since 2009. The Patrolmen’s Benevolent Association is asking for $500 million in back pay.
De Blasio has indicated that paying the full $7 billion is off-the-table, but a negotiated settlement may be possible. “There’s no way in the world to pay out the full amount — that’s estimated as much as $7 to $8 billion, and that’s impossible to find,” de Blasio said in the campaign’s final debate. “If they want to talk about retroactive pay, that’s their right, but they have to show us the cost savings to go with it.”
Many feel that the mayor-elect, who campaigned on income equality, may be more sympathetic to the unions than Bloomberg, who is currently the richest man in the state of New York. In his victory speech — which was transcribed by Democracy Now — de Blasio spoke of the “two New Yorks,” in which the poorest fifth households earned about $9,000, while the wealthiest five percent averaged $437,000.
“The best and the brightest are born in every neighborhood,” de Blasio said. “We all have a shared responsibility and a shared stake in making sure their destiny is defined by how hard they work and how big they dream, and not by their zip code.”
De Blasio went on to call on the city’s wealthiest to pay a “little bit more in taxes” to fund schools and educational programs to ensure every child has equal opportunities.
He also emphasized cooperation between the police and community to provide safety while also respecting civil liberties.
“We are all hungry for an approach that acknowledges we are stronger and safer as a city when police and residents work hand in hand,” he remarked in the speech.
It is uncertain whether de Blasio will be more amenable to the unions than Bloomberg. No municipal union backed him until after he won the Democratic primary, and although de Blasio is viewed as a friend to labor, unions say they don’t expect preferential treatment.
Yet after near-record budget surpluses, the unions feel comfortable asking for back pay, despite the fact that the Bloomberg administration argues the money is unavailable, due to rising pension and health care costs.
“I don’t think anyone expects it to be paid in a one-time payment over the next couple of months,” said David L. Gregory, executive director of the Center for Labor and Employment Law at St. John’s University School of Law. “It will probably be part of some innovative, multi-year arrangement.”