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February
7, 2003
Razzle Dazzle
Unions Face the Whirlwind
By Mark Daly
While the presumption was that Governor Pataki’s proposed
budget steered away from tax hikes to endear him to President Bush,
two theories made the rounds last week about a plan generally regarded
as a disaster not just for the city but its neighboring suburbs.
One is that by prescribing huge cuts in education and health funding,
Mr. Pataki may stir reluctant Republican State Senators to join
with Assembly Democrats in approving tax increases as an alternative.
This would allow the Governor to deflect blame for tax hikes that
he knew all along were preferable to gutting services to deal with
the mountainous $12 billion deficit.
“That would be the smart move, wouldn’t it?" said
Captains’ Endowment Association President John Driscoll, who
noted that while Mr. Pataki’s budget plan is consistent with
the Bush administration’s, “It’s got even some
Republicans shakin’ their heads.”
Making It Up As He Goes?
The other, more cynical theory, is that Mr. Pataki doesn’t
know for sure that Senate Majority Leader Joe Bruno will opt to
support tax hikes, but figures whatever happens is better than taking
the heat – either from the public or national Republican leaders
– for coming forth with a more realistic mix of tax hikes
and service cuts.
A day earlier, Mayor Bloomberg offered up just that kind of mix
in a city-spending plan that leans heavily on Albany, Washington,
D.C. and the municipal unions for help. Within 24 hours, Mr. Bush’s
State of the Union address and Mr. Pataki’s budget presentation
made increasingly clear their unwillingness to give him what he
is asking.
This would seem to put even more pressure on city labor leaders,
since Mr. Bloomberg can do far more to make life difficult for their
members than he can to the state or Federal governments. But even
as Municipal Labor Committee head Randi Weingarten was offering
reminders of the unions’ cooperation in the past when the
city was in fiscal trouble, she and other labor leaders made clear
they were not about to be reasonable when none of the other potential
saviors of the city was stepping forward.
Reacting to Mr. Bloomberg’s budget position that the unions
would have to offer up $600 million worth of productivity savings
before he would consider wage raises that would be based on additional
productivity, Ms. Weingarten told an interviewer on New York 1,
“We are not a bank that you come in and say, ‘Okay,
give us some concessions.’”
Another union official, who did not want to be identified, said
that anything the unions gave Mr. Bloomberg “has gotta be
in the context of a contract. Nobody’s gonna give him $600
million. It’s like he’s coming to the unions and saying,
I’ve got needs. Satisfy my needs, and then see if you can
satisfy your needs.’”
Even District Council 37, whose members are particularly vulnerable
to layoffs if productivity changes don’t provide the money
the Mayor is seeking, does not seem inclined to cooperate on those
terms. It isn’t just that DC 37 Executive Director Lillian
Roberts seems less concerned about layoffs than she is about getting
pay raises that will allow her members to keep pace with the cost
of living. There are questions as to whether the heads of DC 37’s
key locals would abide making such a deal simply to avoid layoffs.
Case for Layoffs Over Givebacks
Barry Feinstein, the former Teamsters Local 237 president, used
to argue that for a labor leader, layoffs were preferable to givebacks
for reasons that went beyond the obvious one: that members who gave
up benefits but kept their jobs are in a position to vote out of
office the union leader who made those concessions.
The city, he explained, was never willing, at a time when its finances
were bad enough to make layoffs a real possibility, to guarantee
that if the unions made concessions, there would not come a point
six or 12 months later when officials would return and say, “We
need more help.” Absent such an assurance, Mr. Feinstein contended,
it was foolish to hurt your entire membership to provide reprieves
to some of them that might turn out to be short lived anyway.
In recent years, city requests for concessions have generally focused
on two areas: having employees shoulder a greater portion of the
health-care costs or extend their workweeks.
The health-care argument is particularly popular among editorial
writers and even an occasional liberal columnist who ought to know
better: that the city offers more generous coverage than most employers,
with workers belonging to the Health Insurance Plan of Greater New
York not having to make any contributions at all for basic coverage.
The fact that imposing additional charges would leave employees
no worse off than many private-sector workers might make such a
change easier to rationalize, but it doesn’t make it any less
of an intrusion on employee compensation.
‘Like a Pay Cut’
That’s basically taking a pay cut,” Captain Driscoll
said. City labor leaders, guided by advisers like Jack Bigel and
Bill Scott in the early days of collective bargaining, had the foresight
to put a high value on good health coverage long before medical
costs headed into the stratosphere. They are unlikely to diminish
that coverage at a time when union members fully grasp its importance.
Nonetheless, during a meeting between the MLC and city officials
Jan. 31, Labor Relations Commissioner Jim Hanley proposed eliminating
one extra health benefit that was provided during the last round
of bargaining. Taking advantage of a surplus in the unions’
health stabilization fund, under a deal that allowed the city to
funnel some of the excess into its operating budget, employees gained
the right to free coverage for prescriptions for what became known
as the PICA group: psychotropic, injective, chemotherapy and asthma
drugs. The cost has exceeded city expectations, and Mr. Hanley asked
the unions to forsake the benefit.
Savings by the Hour
The other potential big money-saver involves changes in work hours.
This is an unwieldy matter to negotiate, because the city’s
needs vary based on the employee group involved. Most DC 37 members
work 35 or 37½ hours a week, and so the city wouldn’t
mind extending their workweeks by 2½ hours. But DC 37 –
and other, smaller unions in similar circumstances – would
be unlikely to agree to such extensions without appropriate increases
in compensation. When the city granted Teachers an additional 6-percent
raise (using state money that Mr. Pataki discontinued in last week’s
budget proposal) for working an additional 100 minutes a week, the
purpose was to improve the quality of instruction, not save money.
That would not be the case here, and the city’s reluctance
to pay employees for the extra time worked would make an agreement
more difficult to reach with the civilian unions.
And where the administration would like civilian employees to work
longer hours, it has attempted unsuccessfully to persuade Police
Officers to work shorter hours but more tours, with the reconfigured
shifts making each cop available for 10 extra tours, with the reconfigured
shifts making each cop available for 10 extra tours a year. That
proposal, with an accompanying wage increase of between 4 and 6
percent, was considered by the arbitration panel that decided the
Patrolmen’s Benevolent Association contract, and ultimately
discarded because of objections by PBA President Pat Lynch based
on rank-and-file reaction when details were published prior to the
award.
The police unions would actually prefer extending shifts and working
four 10-hours tours a week rather than remaining on the 8-hour,
35-minute shifts. The guiding force for police schedules statewide
is the requirement under the Public Officers’ Law that cops
be scheduled for 2,088 hours of work per year, with the actual total
decreased once vacation days are figured in.
“It’s like asking for blood from a stone,” Mr.
Driscoll said. “The resentment in the Police Department is
that [city officials] talk about increased productivity, but [cops]
get no credit for the huge decrease in crime. That’s their
productivity – it’s not like Sanitation Workers where
you can measure it in tonnage.
“People aren’t making extravagant salaries,”
he continued. “At the Police Department that’s why people
are just running out the door,” referring to the 4,000 cops
who have either retired or left for other jobs over the past two
years.
As it is, Mr. Driscoll claimed, the lack of effort the city has
made to retain experienced officers contradicts the desire that
Mr. Bloomberg professes for greater productivity. “The bean-counters
don’t consider that you paid $100,000 to train a cop making
$50,000 with someone you’re paying $31,000,” he said.
Won’t Wrap It Early
If the past is any guide, state legislators who are chronically
late reaching agreements on budgets even in good times may still
be wrestling with this bad-times plan beyond the date in late June
when the city; by law must have its budget adopted for the fiscal
year that starts July 1.
When the time approaches, said Richard Wagner, president of Board
of Election Local 1183 of the Communications Workers of America
and the senior municipal labor leader, “We’re all going
to have to get in a room and start thinkin’ and talkin’.”
Mr. Feinstein, who is now a board member of the Metropolitan Transportation
Authority, predicted the room would have to hold other parties besides
government officials and the unions, summoning images of when he
was part of the labor contingent that dealt with prominent bankers
and city and state officials in devising a solution to the mid-1970s
fiscal crisis.
I don’t think that the Governor is duplicitous and cute in
matters such as this,” Mr. Feinstein said. “I think
when he says he intends not to do tax increases, he means exactly
that. I was stunned by the dimension of the cut [in education funding]
– there’s that old belief you don’t mess with
the kids.” Senate Republicans, he said, “are going to
have a difficult time with the Governor’s position on education,”
but they won’t necessarily push through tax hikes as the means
to avert school aid cuts.
Tougher Than in ‘70s?
Mr. Feinstein said that both the size of the budget gap and the
fact that both the city and the state are in deep trouble –
with only remote prospects of Federal help – make this crisis
potentially worse than the one three decades ago. Back in the mid-1970s,
the state’s finances were solid and the Federal Government
under President Jimmy Carter allocated job-training funds that allowed
the city to hire back thousands of the employees it was forced to
lay off.
Referring to the Governor who helped rescue the city back then
and his successor, Mr. Finstein said, “This is well beyond
the deficits we had with Hugh Carey and later with Mario [Cuomo]
– and those were horror shows. You can’t expect the
work force to carry a serious brunt of that. What is the business
community going to do, what is the real-estate community going to
do? You need to have the players all in a room, with each one being
told what their obligations are.”
Mr. Driscoll, on the other hand, is convinced that the current
crisis is largely a consequence of Republican officeholders –
from President Bush down to Governor Pataki and former Mayor Rudy
Giuliani – making imprudent tax-cutting decisions to curry
favor with big business and wealthy citizens in return for their
political support.
‘Rudy Cost Us $13B’
“If none of the Giuliani tax cuts went into place, the city
would have another $13 billion available right now,” he said.
He expressed doubt that Mr. Pataki was inclined to reverse a trend
under which the rich have gotten richer while “the middle-class
worker is getting killed and so is the civil servant."
But he and Mr. Wagner both said that even concern about layoffs
would not prompt municipal union leaders to make a bad deal just
to save jobs. Mr. Driscoll shares the view of most uniformed union
leaders that they are unlikely to be hit by layoffs, in part because
of his sense that the city makes decisions based on what is good
for business.
“You know what?” he said. “People come to New
York because the city is safe. Businesses are doing business here
because it’s safe.” And so, he suggested, Mr. Bloomberg
would ultimately decide that using layoffs to trim a police force
that is already hard-hit by attrition sent the wrong signal.
‘Sacrificing All Along’
“I was laid off for over three years in the ‘70s,”
said Captain Driscoll, one of several thousand cops who became casualties
of the fiscal crisis. “And my position [on layoffs versus
concessions] is, you don’t wanna pay people what they’re
getting, lay them off. To expect workers to accept less money in
untenable conditions is ridiculous.
“I don’t belittle the fiscal crisis,” he continued.
“I’m not naïve; the financial problem is real.
But the people working for the city are paying taxes and having
trouble making ends meet, and now you’re telling them to make
do with less. You have a wealthy businessmen calling on them to
sacrifice. The workers have been making a sacrifice all along.”
Correction Officers’ Benevolent Association President Norman
Seabrook remarked, “I don’t have layoff worries. Inmates
are inmates, and there are always going to be city jails. But as
part of the MLC, at the end of the day we have to make the best
possible deal not only for our members but for all workers of the
city.”
Even if uniformed employees are unlikely targets for layoffs, they
are unlikely to feel the pinch, however, if their unions cannot
reach an accord with the city. This has already been evidenced in
the Fire Department, where threats of staffing cuts in engine companies,
the closing of some fire units, and the city’s plans to have
firefighters share quarters with Emergency Medical Service personnel
have all been greeted with howls of protest.
Mayoral aides including Budget Director Mark Page have floated
another idea that could save the city huge amounts of money without
harming current employees: a new pension plan that would offer less-generous
benefits than under Tier 4, which has covered most city employees
for the past two decades, or Tier 2, which applies to cops and firefighters
hired after July 1976.
The unions are sure to appose the idea, as they did every pension
plan starting with Tier 2’s advent in 1973. Those plans were
nonetheless adopted in Albany over union protests. Mr. Pataki and
the Legislature might look kindly on such a move because, if applied
statewide, the reduced pension contributions that likely would result
would have an immediate impact on the deficit.
But Mr. Feinstein, who helped lead that opposition 30 years ago,
said it would be foolish for city labor leaders to embrace a lesser
pension tier to meet Mr. Bloomberg’s productivity demand as
a way to at least spare their current members any budgetary pain.
‘Won’t Just Lay Back’
Tier 1 by any measure was a generous pension plan, he noted, and
the scaled-down Tier 2 was still superior to virtually all pension
plans offered by other public and private entities. Tier 4, on the
other hand, Mr. Finstein continued, “is not a particularly
attractive pension plan, so making a new one which would be worse
is not going to play well in the labor house. I don’t think
labor is going to decide this is something they should lay back
and enjoy.”
Traditionally Democratic unions that last year decided in the name
of political expediency to support Mr. Pataki for re-election are
now reaping the whirlwind: a Governor who rather than pressing his
fellow Republicans in Washington for relief is instead following
in their no-tax footsteps despite the obvious harm it will cause
government services statewide. They now resolve not to roll over
to demands for concessions that are fast coming due, but their leverage
over the price their members are forced to pay may have slipped
away in the voting booths last November.
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