The Chief
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.