The Chief
February 22, 2002

Budget Spreads Pain and Steers Clear of Layoffs

Mayor to Cut 6,000 Jobs With Aid of Buyout Plan

By Deidre McFadyen

Mayor Bloomberg Feb. 13 unveiled a $41.4 billion budget proposal that closes a projected $4.8 billion deficit primarily through agency cuts of up to 20 percent and $1.5 in new borrowing. Promising no layoffs through July 2003, he said that the city would trim up to 6,000 workers from its payroll through attrition and an early retirement program.

While libraries, cultural institutions parks, and health and human service agencies absorbed the deepest cuts, the Police Department, the Fire Department and the Board of Education were not shielded from the knife.

NYPD Down 1,600

The NYPD will not replace the 1,600 cops it has lost to attrition in recent months, reducing its headcount to 39,100 but will hire a class of 1,000 recruits in July to replace officers it anticipates losing by the end of the fiscal year June 30. To maximize the police presence on city streets, 800 administrative and clerical positions now filled by cops will be civilianized, using either attrition or the reassignment of officers to patrol duty.

The city's capital budget was also cut by 20 percent. The Correction Department lost 29.7 percent of its capital funds, Correction Commissioner William Fraser said. School officials said that the Board of Ed. will have to delay building eight schools as a result of its smaller capital allotment.

"The budget we are going to show you hurts everybody. We don't think it hurts anybody fatally," said Mr. Bloomberg in a dynamic 80-minute presentation at City Hall, where he authoritatively took the audience through a series of complex charts without any notes. "It's a spread-your-pain, no-sacred-cow kind of solution."

DC 37: Cutting Too Much

Municipal labor unions pledged to work with the Mayor in crafting the final budget, but balked at the severity of many of the cuts. "We are concerned that the size and scope of the service reductions called for by Mayor Bloomberg.are too large for the citizens of New York to absorb," said District Council 37 Administrator Lee Saunders, whose union represents 125,000 workers.

The Mayor's spending plan also banks on $800 million in help from the state and Federal governments, either through additional aid or by giving the city more discretion in spending or the go-ahead to raise certain fees and taxes.

From Albany, the city is looking for approval to increase the cigarette tax by $1.42 a pack and to hike parking fines. Mr. Bloomberg is asking the Federal Government for more flexibility on how the city spends welfare and community development funds, plus higher reimbursement for Medicaid and protecting foreign dignitaries.

The city is also hoping to save $500 million from fringe benefits for city employees, reductions that need union approval. The city will ask Albany to stretch out from five to ten years its payments to the pension systems to pay for a two-year-old law granting retirees an automatic cost-of-living increase. The change will not affect retirees' benefits.

Council to Weigh In

The Mayor's budget proposal serves as the starting point for negotiations with the City Council, which will hold budget hearings starting in mid-March. The Mayor will put forward an amended budget following those talks. The city is obligated by law to pass a balanced budget by June 1.

Mr. Bloomberg said he was not wedded to every cut and revenue enhancement proposal in his plan. "But I have said to the City Council that if they want to change something, I'm perfectly willing to listen to other ideas, he said. "All they have to do is show me if they want to restore a cut where we cut someplace else."

City Council Speaker Gifford Miller applauded the Mayor for avoiding layoffs and civilianizing some of the proposed cuts. "We are committed to going over this budget line by line to ensure that we maintain important services," he said.

'Must Face Reality'

Mr. Bloomberg insisted that painful cuts and new borrowing were necessary if the city was going to dig its way out of the massive hole created by the Sept. 11 attacks and the downturn in the economy. "We have to face reality," he said. "Anybody that thinks that gimmickry or a Hail Mary pass is going to bail us out is just being so totally unrealistic."

The one measure that Mr. Bloomberg refused to consider was raising taxes. "If you raise taxes in this city, you are going to drive people out," he said.

The Mayor scoffed at a proposal floated by mayoral candidate Alan G. Hevesi last fall to impose an income surcharge on the city's millionaires. "It's very tempting to say, 'There's where the money is. Let's grab it now,'" said the billionaire media mogul. "But the effect of that is to destroy the ability to balance the budget in '04, '05, '06. We need to get people to come to the city, to bring jobs and work here. We don't need anything that sends them out."

While not calling outright for tax increases, United Federation of Teachers President Randi Weingarten, who chairs the Municipal Labor Committee, contended that city workers were being asked to bear a disproportionate share of the burden. "Municipal workers have sacrificed in the past when the city needed them," she said. "They will be particularly concerned that this time sacrifices are asked of everyone."

'Spread the Sacrifices'

Glenn Pasanen, associate director of City Project, a budget watchdog group, noted that the new round of proposed cuts for social service agencies comes on top of severe ones imposed during the Giuliani years. "If everybody in the service areas is being asked to sacrifice, it would be a good thing to balance that with people in the upper-income levels," he said.

All in all, the city labor unions did not fare badly in the plan, given the size of the gap. Adopting a markedly different tone than his predecessor, Mayor Bloomberg said that he decided to protect the jobs of city workers because he saw them as part of the solution. "If they can find ways to do things more efficiently, then we'll work hard and cooperate, and think about how the needs of the city change and adapt with it, we will all be great beneficiaries."

Rudy Targeted Unions

Faced with a budget gap of about half the size in his first year in office in 1994, Mr. Giuliani, by contrast, took aim squarely at the public employee unions, saying that the city's underlying problem was that municipal government was too large. He threatened the unions with layoffs if they didn't cough up givebacks in employee health benefits, vacation days and work-rule changes. Using the carrot of early retirements, he sought to trim 18,000 jobs from the city's payroll, with 5,500 jobs eliminated by the third month of his taking office.

After arguing in his State of the City address last month that the city's staffing levels were still too high, Mayor Bloomberg changed his tune in his budget presentation. He again observed that the Federal Government served many more people with fewer workers, but he drew a different conclusion this time. The city is more compassionate," he said. "We do more things for our citizens than any other place, but there is a cost."

The Mayor did not include any money in a labor reserve to cover future raises for workers whose current contracts expire this year. He said that money had been allocated in the budget to pay the same raise to Teachers, Firefighters and Police Officers, who have been working for over a year without contracts, as the rest of the city work force received in the last round of collective bargaining.

Budget officials said they hoped to shed 4,000 to 5,000 jobs by offering an early retirement incentive targeted at particular titles. The spending plan calls for $100 million in annual savings. Giuliani had included $50 million for buyouts in his November budget adjustment, but the program was not implemented by the time he left office. That funding, city officials said, has been rolled over into the next fiscal year.

Pension Sweeteners

Budget officials said they expected that the retirement incentive, which must be passed by the State Legislature, would offer additional service credit that would fatten pensions and a waiver of the penalty incurred by workers who retire before age 55.

The unions are sure to push for the widest range of titles to be included in the incentive. Managerial Employees' Association Executive Director Edward Perlmutter urged the Mayor to include all managerial titles because the city would save the most by shedding its higher-paid workers. "It won't be possible to generate the savings he wants otherwise," he said.

Among the proposed agency cuts, the Department of Housing Preservation and Development took the biggest hit, losing 26 percent of its budget.

The Department of City-wide Administrative Services would absorb a 21-percent reduction, equal to $28 million. The agency's budget for the administration of civil service exams would be spared. "Civil service is not being hurt at all," said an agency spokesman, adding that the city's exam schedule is set by the hiring needs of other city agencies.

The Mayor cut funding for public libraries and cultural institutions by 15 percent. "We are in the process of determining the exact impact a 15-percent cut on the library will have," said New York Public Library spokeswoman Jennifer Bertrand. "But clearly services to the public will be affected."

Ms. Bertrand said that the library would seek to absorb some of the reduction through staff attrition and would avoid layoffs if possible.

The already strapped Parks Department took another 13-percent hit in the Mayor's spending plan. The plan calls for reducing the department's work force by trimming 51 jobs through attrition, cutting 29 Park Enforcement Patrol Officer jobs in Manhattan, and suspending the hiring of six-month seasonal workers.

Change in Seasonals

Motor Vehicle Operators Local 983 President Mark Rosenthal took a dim view of scaling back the PEP officer force, which his union represents. "There should be no reduction in the people who patrol city parks in a time of heightened security," he said.

The seasonal parks jobs - maintaining tennis courts, cleaning beaches and patrolling pools, among other things - would be assumed by former welfare recipients in the one-year-old Parks Opportunity Program, which has provided 3,500 people reaching their welfare time limits temporary jobs with union wages and benefits. Budget officials said that the city would scale back the program to accommodate 2,000 people. Human Resources Administration officials had previously threatened to phase out the program.

Mr. Rosenthal, who led the effort to save the program, said that the former welfare recipients deserved city jobs but the solution proposed by the Bloomberg administration was unacceptable. "The intent of the Federal money is not to displace workers," he said. "Some 800 people won't be hired as a consequence."

Cites Workers' Plight

Seasonal workers are mostly unskilled, minority workers who have worked in city parks for 10 to 25 years in a row, Mr. Rosenthal said. Hiring is done each year by seniority. "They've got families," he said. "They've been surviving on these jobs from year to year. They've never had a chance to get permanent employment in the parks."

Health and human services agencies took double-digit cuts as well in the spending plan: the Department of Youth and Community Development, 19 percent; the Administration for Children's Services, 18 percent; the Department of Homeless Services, 17 percent; the Department for the Aging, 16 percent; and the Health Department, 11 percent.

ACS would save $79.8 million by postponing subsidized day care for thousands of eligible families on a waiting list.

The Police Department was asked to absorb a $212 million cut, which amounts to 7 percent of its budget. To achieve that, the police force will lose 1,600 positions from its recent all-time high of 40,710 members.

NYPD's Status

A surge of retirements coupled with the department's growing trouble finding new recruits have already reduced the current force to 39,100 cops. To maintain staffing at that level after further anticipated attrition, the NYPD plans to train a new class of 1,000 recruits every July, Mayor Bloomberg said.

Some of the slack will be taken up via the civilianization program, with an unspecified number of desk-bound cops returning to patrol as civilian employees replace them.

Noting that the Board of Ed., the NYPD and the Fire Department account for 206,000 of the city's 306,000 workers, Mayor Bloomberg said that it would be virtually impossible to spare them entirely. "It just goes to show you how you can't sit there and have a few big sacred cows because you would take everybody else down to zero, and that's not a practical thing to do," he said.

The Mayor noted that crime had continued to decline despite there being fewer cops in the streets in recent months. "But we are committed to keeping this city safe, and I will authorize the Commissioner to do whatever it takes if crime starts going up," he said.

Kelly, PBA Disagree

Police Commissioner Raymond W. Kelly said that the reduction in personnel would not hamper the department's ability to fight crime.

Patrolmen's Benevolent Association President Patrick J. Lynch was sharply critical of scaling back the police force. "It would put at risk the historic crime reductions and quality-of-life improvements our officers have achieved over the past several years," he said. "It also would threaten the success of our domestic war against terrorism."

Captains' Endowment Association President John F. Driscoll said that, as a practical matter, the reduction in the headcount would have little impact because the department has encountered serious problems retaining and recruiting cops given the low salaries. "If we keep up at this kind of pace, we'll be lucky to have 37,000," he said.

Already Stretched

The cops on the job, Captain Driscoll said, were already feeling squeezed.

The CEA Leader said that he supported bringing in civilians to do jobs that they are suited for. But he was skeptical that the department could boost its patrol strength significantly as a result. "A lot of cops in desk jobs are on restricted duty, and they are not able to be on full duty anyway," he said.

Mayor Bloomberg also called for cutting $63 million, amounting to a 6-percent reduction, from the Fire Department's budget. The proposed cutbacks included eliminating 75 ambulance tours daily and using Firefighters on light duty as Battalion Chief's Aides, who drive commanders around. The department also would hire 73 new Firefighters to reduce overtime spending under the plan.

UFA: 'Wrong Message'

Uniformed Firefighter's Association President Kevin Gallagher argued that "cutting services sends the wrong message."

Uniformed Fire Officers' Association President Peter Gorman slammed the proposed cuts to the Fire Department. "The UFOA has promised to work with the Fire Department to close the budget gap, but it cannot be accomplished in one sweeping move," he said. "That would be an invitation to chaos at the command level."

Mr. Gorman took particular issue with the plan to use Firefighters on light duty as Chief's Aides. "There are contractual and fireground safety rules that come into play here," he said. Chief's Aides are active-duty firefighters who are vital members of the team in a serious incident. Eight Chief's Aides died at the World Trade Center."

The Sanitation Department, which took a 13-percent hit in the spending plan, would lose 561 uniformed positions, 82 percent of them as a result of the temporary suspension of the city's metal, glass and plastic recycling program. Mr. Bloomberg questioned the effectiveness of the program, noting that 40 percent of the items collected wind up in the regular trash.

'A Shame to Scrap It'

The Uniformed Sanitationmen's Association saw a possible loss in income for its members who work recycling routes and are eligible for a productivity bonus based on the amount that they collect. Those Sanitation Workers, however, would likely be shifted to refuse collection, where a similar bonus applies, because the tonnage collected would climb if glass, metals and plastics were deposited with other trash.

Still, union officials were reluctant to abandon recycling. "We set up a relationship with the neighborhoods and the community boards; we worked hard to map out the routes. It's just a shame to see all that work go out the window," said USA Vice President Harry Nespoli.

The Department of Correction, which took a 12-percent cut, will close the Brooklyn Correctional Facility, known as The Brig, which has been vacant except for a barebones staff for several years. The department will also shed 511 uniformed jobs through attrition, largely as a result of the decline in the number of inmates in city prisons.

Correction Officers' Benevolent Association President Norman Seabrook voiced support for the Mayor's actions. "The reduction comes into play in areas that are not jeopardizing the safety and security of officers," he said.

Mr. Seabrook, one of the few city labor leaders who endorsed Mr. Bloomberg in the mayoral race, took news of the proposed staff reduction in stride.

The department also absorbed a 29.7 percent cut in its capital budget, according to Correction Commissioner Fraser. Some beds in modular jail units set up in the 1980's to address a surge in the prison population would not be replaced as quickly as a result, he said. All court-mandated capital projects would go forward, he said.

'At Least He Looked'

Mr. Seabrook had scalded mayoral candidate Mark Green for proposing to shift funds from the Correction Department capital budget to build new schools, charging that the deteriorating modular structures had created an unsafe work environment for his members. He declined, however, to criticize Mr. Bloomberg for taking aim at the same kitty, saying that the bleak budget picture had forced the new Mayor to make tough choices.

"Mark Green was doing that prematurely without knowing what the situation was," Mr. Seabrook said. "At least Mike looked at the fiscal situation and what it would cost."

The beleaguered Board of Ed., still reeling from the loss of $400 million in city funding earlier this school year, would lose another $361 million in the Mayor's spending plan. The city's contribution would drop 7 percent, but the Board of Ed.'s funding would actually fall 3 percent because more than half of its $12 billion budget comes from Albany and Washington.

The board's five-year capital budget also was slashed by $692 million. School officials said that the cutback would delay the construction of as many as eight of the 21 new schools in the pipeline.

Schools Chancellor Harold O. Levy said he would try to shield classrooms from the cuts. "My goal will be to absorb as much of the pain as possible at central, in district offices and in school administration," he said.

UFT President Weingarten blamed Mr. Giuliani for leaving the school system in such dire straits for the new Mayor. "Now the city is faced with some very difficult choices, and we sympathize with Mayor Bloomberg's plight. There is little room for any reductions in school spending that don't also reduce services to children."

Mr. Bloomberg also cut City University of New York funding by $13 million, or 5 percent. Budget officials said that CUNY was spared a deeper cut because the city is bound by the state's maintenance-of-effort law to provide the same level of funding as the previous year. CUNY's community colleges receive city funding, while the state finances its senior colleges.