The Chief
April 25, 2003

Bloomberg, Unions Play Blame Game Over Budget Logjam

By Deidre McFadyen

Stung by his failure to extract $600 million in labor concessions, Mayor Bloomberg lashed out at the unions for refusing to do their part to help the city dig itself out from a $3.8 billion deficit.

The fact of the matter is we are all in this together, and we are all going to have to make sacrifices together,” he said in his April 15 budget presentation. “And when somebody says, ‘I’m just not going to participate,” I sort of shake my head and wonder what they are thinking about.”

MLC Head: ‘Tragic’ Error

A furious Randi Weingarten, chair of the Municipal Labor Committee, fired back that Mr. Bloomberg had made a “tragic mistake” by blaming the unions and “deriding” their alternatives ideas for savings.

The sort of givebacks the Mayor wants, she said, would amount to $2,400 per worker, the equivalent for many of one month’s salary. “Maybe its hard for a billionaire to understand that asking people for a month’s pay is real hard to accept, particularly when there are other choices.”

Saying labor leaders were insulted by the Mayor’s attack, Ms. Weingarten said, “He has tremendously hurt any kind of trust that was there beforehand between labor and himself.”

The unions have offered $300 million in savings from a stretch-out in city pension fund contributions, which in essence would allow the city to borrow money from the funds at 8-percent interest. The second component was an early retirement incentive for Teachers and other city workers that the unions calculated would save the city $200 million. Another $100 million could be achieved through reduced health care costs, the unions contended.

Mr. Bloomberg rolled his yes at those proposals. “We’ve asked labor for some help,” he said. “What they’ve come back with, unfortunately, isn’t really very helpful.” He declared that the proposal contained only $20 million in real savings.

In contract to the fiscal crisis of the 1970’s, when the city was hard-pressed to meet payroll, he said, the problem today is that expenses exceed revenues. All the union’s ideas would do, he said, was delay the bill coming due.

‘Reduce, Not Postpone’

“We have plenty of cash in the bank, he said. “The problem is we have to reduce our expenses, not postpone our expenses.”

Mr. Bloomberg pointedly added, “It’s difficult to see how anybody’s going to get a raise for the foreseeable future.”

The Bloomberg administration is seeking work-rule changes and reductions in pensions and fringe benefits for city workers.

Abandoning his usual quiet diplomacy for a sarcasm-tipped arrow, Mr. Bloomberg displayed a slide with the defiant comments of three un-named union officials under the heading, “Expressions of Support,” (His aides later identified two of the speakers as Patrolmen’s Benevolent Association President Patrick J. Lynch and Uniformed Fire Officers’ Association President Peter L. Gorman; the third was quoted anonymously in New York Magazine.)

The Mayor concluded tartly, “While I’m always optimistic we can get people together, we can say the slope is reasonable steep.”

Mr. Bloomberg’s hard line appeared to stiffen the resolve of unions leaders not to accede to his demand for concessions. “I’m not going to be baited into putting my collective-bargaining contract up for sale,” said Mr. Gorman. “My members aren’t giving up hard-earned benefits.”

Several labor leaders cited lessons learned from the fiscal crisis of the mid-1970’s, when the unions agreed to major concessions and then spent decades fighting to regain the lost ground.

‘Been Here Before’

“We’ve been down this path before,” said Communications Workers of America Local 1180 President Arthur Cheliotes. “We’ve struggled too hard to get what we’ve got. We’re not going to give it up.”

John Driscoll, president of the Captains’ Endowment Association, said the unions were loath to accept permanent benefit reductions to weather a temporary economic downturn. Referring to previous hard times when the unions agreed to such givebacks, he said. “They take it away for nothing, and then charge you an arm and a leg to get it back in contract negotiations.”

While drawing that line in the sand, the union leaders bridled at the Mayor’s assertion that they were not doing their part.

Uniformed Firefighters’ Association President Stephen J. Cassidy pointed out that he had proposed raising revenue by marketing FDNY logos and finding corporate sponsors for the eight firehouses targeted for closing. “I’ve personally tried to go out of my way to help out as it pertains to firehouses,” he said. “The Mayor rebuffed me on those issues.”

Mayor Intransigent?

The problem, the union leaders said, was that Mr. Bloomberg was wedded to his own ideas and unwilling to compromise. “It’s the fact he was a CEO of a $4 billion empire and did things his way,” said Mr. Driscoll. “Unfortunately, politics doesn’t work that same way as industry.”

Ms. Weingarten said that previous Mayors in the 1970s and 1990s had snapped up savings ideas similar to those put on the table by the unions this year.

She said that Mr. Bloomberg seemed intent on making the layoffs as painful as possible as he plays a game of chicken with Albany. There’s no public or private employer that I know – not even Jack Welch at GE – who would start laying people off before he put together a severance plan and a retirement plan to try to avert those layoffs,” she said.

District Council 37 Executive Director Lillian Roberts, whose 120,000 – member union has absorbed the lion’s share of layoffs, also blasted Mr. Bloomberg for pulling the trigger too quickly. “So many more steps should be taken before reverting to these extreme measures,” she said.

Despite the exchange of harsh words, Mr. Gorman argued that the talks could still be salvaged. “Let’s sit down and work some numbers,” he said. “You can’t say no and walk away.”

Mr. Cassidy said that the Mayor undercut his own bargaining hand when, in the heat of intense negotiations last month, he said that he would have to lay off workers even if the unions came through with the $600 million. “What is the incentive for us to be cooperative? he asked. When that question is answered clearly, then maybe we will be able to move forward.”

Union officials situated the Mayor’s attack on labor in the context of a budget proposal that they said put the heaviest burden on poorer residents, who would be hardest hit by cuts to day care, homeless services, foster care, senior centers, and public education.

The labor leaders asked why Mr. Bloomberg was not demanding that the city’s wealthy residents and businesses step up to the plate.

‘Ask Rich to Sacrifice’

Invoking a proposal put forward by state labor leaders, Mr. Cheliotes said that the city could raise $611 million by imposing a 1-percent personal income tax surcharge on people earning more than $250,000 a year. “The Mayor hasn’t asked his friends earning a quarter-of-a-million a year to sacrifice.” He said, noting that Mr. Bloomberg’s latest commuter tax proposal would in fact lower their tax burden, from 3.65 percent to 2.85 percent.

The Mayor’s proposed layoffs, said, Ms. Roberts, “will devastate the schools, libraries, hospitals, cultural institutions, and other public services that millions of New Yorkers depend on, especially the poor, minority and immigrant communities.”

Mr. Driscoll said that ‘irresponsible tax cuts” championed by former Mayor Rudy Giuliani were haunting his successor. The city would have $13 billion more in its coffers today, the Police Captains’ leader noted, if not for those tax cuts. While Wall Street workers enjoyed an earnings bonanza in the 1990’s, “city workers didn’t see any of that money,” he said. “Now it’s the unions’ responsibility to bail the city out?