May 7, 2005

News of Surplus Has Some Unions Asking, What About Us?

By STEVEN GREENHOUSE

ayor Michael R. Bloomberg's announcement that the city has a $3.3 billion surplus could in theory ease the way to labor contracts with the teachers, police and firefighters, but yesterday the surplus seemed only to stoke angry words.

Leaders of the unions, which are seeking double-digit raises, said they were disappointed that Mr. Bloomberg said on Thursday that the surplus would pay for many things - reducing class sizes, increasing garbage pickups, cutting the sales tax on clothing, extending a property tax rebate - but apparently not for raises above what he has already offered.

"The surplus should ease the way to a settlement, but then I was surprised when the mayor turned to the cameras, and said, 'I'll tell the unions there's no money,' " said Randi Weingarten, president of the United Federation of Teachers. "It shows the mayor's priorities. He can't say there's money for stadiums, for cutting the sales tax, but there's no money for the teachers and other unions."

Patrick J. Lynch, president of the Patrolmen's Benevolent Association, which has rejected the mayor's proposal for a 5 percent raise over three years, also voiced dismay.

"The surplus shows that there's not an inability to pay," he said. "There's an unwillingness to pay."

As the mayoral race heats up, tension is rising between Mr. Bloomberg and the teachers, police and firefighters. They have all signaled that they might make his life uncomfortable through renewed protests unless they have a contract before November. The police and firefighters have not had a contract for nearly three years, while the contract for the 120,000 members of the teachers union expired two years ago.

Neither City Hall officials nor union leaders indicated that the surplus had given momentum to deadlocked contract talks. Both the city and police union officials have said they would like to reach a settlement before a panel of arbitrators, which has heard the city's pay dispute with the police union, issues a binding recommendation, expected within the next few weeks.

On his weekly radio program yesterday, Mr. Bloomberg said fears of future deficits prevented the city from increasing its offer to the unions. Despite the current surplus, the Bloomberg administration forecasts a deficit of $4.5 billion in 2007 and $4.2 billion in 2008.

"She just says what she thinks is useful for her membership or to excite the public," Mr. Bloomberg said, referring to Ms. Weingarten. "So forget about that. The real issue is that we have a surplus in one year, and then a big deficit in the next year, and if you add the two years together, we don't have a surplus."

Elizabeth Lynam, deputy research director for the Citizens Budget Commission, a business-backed research group, said the mayor's budget hinted at more flexibility toward the unions. She cited his decision to include money in future budgets for raises equal to half the inflation rate.

"That may jump-start negotiations because he's acknowledging that there is a labor reserve to cover future raises," she said.

But Ms. Lynam also said the mayor might be digging in against larger raises because he was setting aside $862 million next year for additional pension liabilities.

"Part of his strategy is to say, 'There isn't money for wage increases because pension costs are consuming all the extra funds,' " she said.