The Chief
November 22, 2002

Mayor: Save Jobs, Do More

By Deidre McFadyen

Mayor Bloomberg Nov. 14 said he intends to steer the city through its worst fiscal crisis since the mid-1970’s without massive layoffs.

But he raised the specter of pink slips if the city labor unions do not cough up $600 million next fiscal year in recurring productivity savings. Possible savings ideas range from having city workers contribute to their health insurance to increasing the length of the workweek.

‘We Need Flexibility’

The city also plans to trim another 8,000 positions from the 250,000-member work force by July 2003, mostly through voluntary departures. A citywide hiring freeze, which was imposed in late October, means that workers who quit or retire are not being replaced.

“Fundamentally, the people who work for this city do work very hard, but we think that if we can have some more flexibility and in some cases work a little bit longer, we can – with the money saved and through attrition, with buyouts and early retirement plans – avoid layoffs and find more money,” Mr. Bloomberg said in an hour-long budget presentation at City Hall.

The Mayor used the occasion to launch the opening salvo in the upcoming round of citywide collective bargaining. He declared that any future wage increases for city employees would have to be funded through productivity enhancements. Since these concessions cannot be enacted retroactively, he noted, the city would not offer retroactive pay hikes in future contracts.

His workforce proposals were part of a quarterly budget modification – which the City Council must approve – to close a gap of $1.1 billion in the current year’s budget that has opened up in the last four months and a projected $6.4 billion gap for the fiscal year starting July 1, 2003. The deficits were triggered by lower-than-expected tax revenues and rising costs outside the city’s control.

The revised financial plan relies heavily on an additional $1.8 billion spending cut and $4.4 billion in tax increases, from a 25-percent hike in the property tax and an overhaul of the personal income tax to shift some of the burden to commuters. The remainder would come from additional state and Federal aid and union givebacks.

Muted Union Reaction

The response of most labor leaders to the new fiscal plan was measured.

United Federation of Teachers President Randi Weingarten, the head of the Municipal Labor Committee, praised Mr. Bloomberg for being “gutsy and creative” in seeking tax increases that she said would allow the city to maintain its quality of life despite fiscal hardships.

Ms. Weingarten signaled her willingness to discuss union concessions with him. “Labor has always shared sacrifice and played a pivotal role in finding solutions during difficult budget periods,” she said in a statement. In a subsequent interview, however she noted, “You have a work force that is less inclined to shared sacrifice than if they had been treated fairly and not forced to wait by the last administration.”

District Council 37 Executive Director Lillian Roberts promised to study Mr. Bloomberg’s proposals. “These decisions will be made with the Municipal Labor Committee,” she said. “We’ll talk about what he wants, and how far we can go with it. We are looking for efficiencies right along with him.”

Communications Workers of America Local 1180 President Arthur Cheliotes saluted Mr. Bloomberg for his grasp of the nexus between an adequate work force and service delivery. “What I like about this man is that he acknowledges that a reduction in the city work force is not in the city’s best interests,” he said. “He seems to be moving away from this crazed notion in the past to get the headcount down at all costs. That’s refreshing.”

The sharpest criticism came from police and fire union leaders, who warned that the proposed staffing reductions in their agencies would make the city less safe.

Every city agency was asked to make further cuts. Totaling $844 million. Through reductions to the uniformed services and schools were less severe. The cuts ran the gamut, from eliminating 2,500 of the city’s 65,000 day-care slots to closing 32 of the city’s 340 senior centers.

‘Won’t Gut Services’

Mr. Bloomberg contended that the city agencies could absorb the additional cuts without provoking the wrenching disruptions to services that occurred in the mid-1970s. “This city will not cut services below where the quality of life would deteriorate,” he pledged. “Squeegee guys are not going go come back to this city.”

But Mr. Bloomberg said that deeper cuts and layoffs were on the horizon if the City Council and the State Legislature do not approve his tax package or the unions fail to offer $270 million in savings left over from the July spending plan and $600 million in annual savings starting July 1, 2003.

As part of its plan to cut another $51 million from its $1 billion budget, the Fire Department said eight engine companies were targeted for closing: Engine 204 in Cobble Hill, Brooklyn; Engine 212 in Greenpoint, Brooklyn; Squad 252, which will be relocated from Bushwick, Brooklyn to mid-town Manhattan, where it will replace an existing engine company; Engine 278 in Sunset Park, Brooklyn; Engine 209 in Williamsburg; Engine 261 in Long Island City, Queens; and Engine 293 in Woodhaven, Queens.

The department, by law, must give the affected communities 45 days’ notice. Agency officials said that they are beginning that process.

The FDNY will also reduce staffing on 49 engine companies from five to four firefighters, leaving only 11 of the city’s 212 engine companies with a five-member crew. The department invoked a provision in the Uniformed Firefighters’ Association contract that permits it to reduce staffing when medical leave exceeds 7.5 percent over a one-year period.

Uniformed Fire Officers’ Association President Peter L. Gorman responded that police and fire services should be enhanced, not reduced, in the wake of Sept. 11. He also argued that commuters would be more amenable to paying taxes if they were confident that the city would maintain public services.

Noting that at least two changes had been made in the engine company closing since an earlier list was floated, Mr. Gorman contended that political considerations were driving the choices.

UFA Vice President James Slevin was blunter in his criticism, accusing the city of playing Russian Roulette with people’s lives. The loss of one firefighter from the engine companies, he said, would increase the time it takes to put water on a fire. “We’ll have fires that are larger, and as a result more people are going to get hurt and die,” he said.

‘Sacrifices Penalized’

Noting that medical leave had climbed above 7.5 percent because of the number of firefighters out on long-term-sick leave as a result of Sept. 11, he said, “Firefighters are being penalized for the sacrifices they’ve already made.”

The Police Department will cut its $3 billion budget by 5.7 percent this fiscal year by reducing its July 2003 recruitment class from 2,400 to 500. Another 1,600 uniformed officer positions will be eliminated through attrition, bringing the headcount of the police force down to 37,210 by July 1, 2003.

Mr. Bloomberg contended that those cuts would not impair public safety. “The Police Commissioner’s judgment is with the cuts we proposed, he can continue to keep the streets safe,” he said.

Patrolmen’s Benevolent Association Patrick J. Lynch disagreed. “I think we are at a crossroads with crime and the Mayor is taking a wrong turn,” he said, noting that the recent wave of police retirements coupled with the difficulty in finding new recruits have already created a staffing crunch at the NYPD.

To squeeze another $46 million from its $981 million budget, the Correction Department has canceled the two recruitment classes that it had slated for the current fiscal year. The department will reduce the size of its work force by 756 positions and trim overtime costs through the recent closing of the Queens House of Detention and post reductions throughout the city jail system, said department spokesman Tom Antenen.

The Sanitation Department will whittle another $21.6 million from its $981 million budget through reducing the frequency of basket collections outside Manhattan, reconfiguring collection routes to ensure that all garbage trucks return with a full load, and postponing the capping of the Fresh Kills landfill.

The Department of Education absorbed an additional $200 million cut on top of the $360 million sliced from its $11.7 billion budget in July. But agency officials declared that those reductions would not hurt the classroom. Instead, they would come from eliminating 500 administrative jobs at central headquarters and 100 jobs from district offices. The department plans to offer buyouts of up to $5,000 to back-office staff. Schools Chancellor Joel I. Klein has asked Superintendents to cut their budgets by 10 percent to save $16 million.

CUNY Cuts

The City University of New York must absorb an additional $9.7 million loss in city funding. CUNY Vice Chancellor Jay Hershenson said that the community colleges will lose $6.6 million, the Vallone scholarship program, which provides scholarships to city high school graduates who maintain an average of at least a B, will be chopped by $2.8 million, and the Hunter Campus schools will lose $400,000.

Mr. Hershenson said that the administration was aiming to shield classrooms as much as possible. “Our first priority is to be protective of the instructional staff and our core educational mission,” he said. “So we will be focusing the impact on maintenance, operations and the management side of the operating budget.”

The Parks Department will have an additional $8.7 million budget cut from its $170 million budget. The department will collect $3.4 million in higher fees to soften the blow. The other $5.3 million will come from a reduction in headcount of 157, including 110 employees – mainly City Park Workers and trades people – who took early retirement earlier this fall and 47 more jobs that will be trimmed through attrition by next July, parks officials said.

The department’s seasonal budget will also be cut by about a quarter, resulting in fewer seasonal workers being hired next summer, officials said. Seasonal staffing will remain constant, however, at beaches and pools. More savings will be reaped by reducing tree-pruning contracts.

Culture Trims

The Department of Culture Affairs will take a 9.5 percent hit this year, which will be applied across the board to cultural institutions that receive city funding.

Cultural Affairs Commissioner Kate Levin said that she was pleased that her department was not asked to make a greater sacrifice than other agencies. “That’s different than the way that the agency has been treated in the past,” she said, referring to the Giuliani era. “It speaks to the value that this administration places on the agency and the organizations that it funds.”

The only agency spared further spending cuts was the Department of Environmental Protection.

On the revenue side, Mr. Bloomberg called on the City Council to enact a 25-percent hike in the city’s property tax. If the hike is approved before January tax bills go out, it would bring in an estimated $1.1 billion in additional revenue this year and $2.3 billion next year.

Council Speaker Gifford Miller quickly shot down an increase of that magnitude. “I think 25 percent is too high, he said. “We’re going to be in serious discussions with the Mayor and my colleagues in the Council about what is the right level.”

Hit Suburbanites

Mayor Bloomberg also proposed an overhaul of the personal income tax to shift the burden from city residents to suburbanites who commute to the city to work. The reconfiguration would result on a tax cut for city residents, while commuters would be asked to pay up to six times more than they paid under the old commuter tax, which Albany rescinded in 1999.

“What we are trying to do is say that everybody who works in the city benefits from the services, and it is only equitable that everybody pays some share of it,” said Mr. Bloomberg on Nov. 13, when his aides first unveiled that aspect of his financial plan.

Changes in the personal income tax require Albany’s approval, however, and suburban legislators were already calling the tax proposal dead on arrival. Governor Pataki and State Senate Majority Leader Joseph L. Bruno, who both adamantly opposed reinstating the commuter tax, said that they would review the Mayor’s proposal.

Not a Unique Concept

Mr. Bloomberg noted that New York State and many cities, including Yonkers, already tax the income of nonresidents. “All we’re asking the Legislature to do is conform New York City’s tax policy to the state’s,” he said.

Council Speaker Miller indicated that he would not make approval of a property tax increase contingent on winning Albany’s support for personal income tax reform.

The Mayor defended his decision not to increase taxes back in July, when the year’s budget took effect. “The truth of the matter is that we were coming out of 9/11, and everybody was very worried that people, residents, and companies – employers – would leave the city,” he said. “Today, we are 15 months, 14 months after 9/11. New York remains the safest big city. I don’t think it is realistic today to say that people are so worried that they are threatening to move out of the city.”

Labor leaders hailed Mr. Bloomberg for finally adding tax increases to the mix. His first budget was a blend of heavy spending cuts, new borrowing and an array of higher fees.

Roberts: Must Share Pain

Ms. Roberts, who had previously called only for the reinstatement of the commuter tax, said the Mayor was on the right track. “I am in support of them,” she said of the tax proposals. “You can’t get money from the wind. Everybody has to share in this.”

Mr. Cheliotes went even further, calling on Mr. Bloomberg to rescind the billions of dollars in tax cuts instituted during Mayor Giuliani’s eight years in office. “If you look at the Giuliani tax cuts, you’ll know why we are in this mess,” he said.

Both Ms. Roberts and Mr. Gheliotes said that city workers were being unfairly hit twice, asked to pay higher taxes as city residents and then told that they must for-go wage increases that would enable their income to keep pace with the rising cost of living.

“It’s a double tax on city workers,” Mr. Cheliotes said. “They are being taxed once as taxpayers and taxed a second time as city workers.”

Independent Budget Office spokesman Doug Turetsky said that the proposed tax increases seemed prudent given the city’s fiscal straits. He added, however, that the restructuring on the table would make the city more reliant on the property tax without fixing the structural flaw in that tax that results in rental buildings and commercial properties shouldering a disproportionate share of the burden.