The Chief
April 25, 2003

Razzle Dazzle

Bloomberg Boxes Himself In

By Richard Steier

In describing the city’s dependency on Albany as he outlined its budget dilemma April 15, Mayor Bloomberg remarked, “There’s an old saying: You take the king’s shilling, you become the king’s man. We take money from Albany, and with that we give up control.”

The real problem, of course, is that the city doesn’t get back nearly as much from Albany in aid as it hands the state in taxes. In another time, under another overbearing ruler named George, such an imbalance was tinder for the Revolutionary War.

Unlike some businessman-leaders of that era, however, Mr. Bloomberg is not a firebrand. And so the remark served as just a passing observation rather than a call to arms against the Troy in the Governor’s Mansion. Instead, the Mayor vented his spleen against the labor leaders who are less powerful and less vengeful than Mr. Pataki, and United Federation of Teachers President Randi Weingarten – who also has good reason to regret her support of the Governor’s re-election – responded in kind.

Second-Hand Kool Aid Victims

Both the Mayor and the unions are under siege, faced with untenable choices while the Governor clings to a stance against taxes for no discernible reason other than it being the same Kool Aid that President Bush is drinking.

In a press conference at which she responded to the Mayor’s remarks on behalf of the Municipal Labor Committee, Ms. Weingarten seemed unusually agitated as she charged, “The Mayor needs to have enemies, and he needs to make the unions enemies.”

Referring to Mr. Bloomberg’s denunciation of union suggestions for producing $600 million in savings as worth only $20 million in real economies, she said, “He spent more time deriding the proposal today than he did actually talking to us about it. These are exactly the kind of things the union movement was applauded for doing during the ‘70s fiscal crisis.”

The Mayor insisted that a different approach was needed this time around, pointing out that the city is still paying a half-billion dollars each year to retire the debt it owes to the Municipal Assistance Corporation, which was created as both a financing mechanism and a watchdog over city spending in 1975. “We can’t postpone the problem to our children,” he said last week.

He cited several additional reasons for departing from the ’70s blueprint other than the fact that Mr. Pataki lacks the inclination and the resources to help the city to the extent that Governor Hugh Carey did more than a quarter-century ago.

That was also, the Mayor noted, the period when an Emergency Financial Control Board was created, which imposed work force cuts that were intended to spread the pain evenly among agencies but in the process badly damaged the quality of life in the city.

Twenty percent of the city’s cops, firefighters and sanitation workers were laid off in 1975, Mr. Bloomberg noted. “They laid off 20 percent of the Teachers, they closed 20 or 30 hospitals… we lost control of the streets.”

Priorities Limit His Leverage

He was a bit high on the hospital closings, but other cuts did in fact happen. The Mayor has sought to protect to the extent that he can key services like education, police and fire, although the contingency budget he has proposed would gouge each of those work forces, if only through attrition.

But in setting out his priorities in that fashion – reflecting both his personal belief and public sentiment that those are the municipal jobs that matter most – Mr. Bloomberg has undercut his ability to gain the sort of union cooperation that he is demanding.

It is no coincidence that the two labor leaders who have been most vocal about not supporting a commuter tax – Peter Gorman representing fire officers and John Driscoll of the NYPD Captains’ union – are the ones whose members are least likely to be laid off no matter how bad the budget picture gets.

Norman Seabrook, the Correction Officers’ Benevolent Association president whose less-senior members could lose their jobs, is working outside MLC channels on two fronts, lobbying top Republican officials in Albany for help while also negotiating directly with Correction Commissioner Martin Horn on alternatives to layoffs.

Mr. Bloomberg has suggested labor leaders are being selfish, putting city employees’ jobs at risk because politically that is more palatable than having their entire memberships angry because they made concessions. But his assessment of the situation skates past two hard facts. One is that the union officials are making the same sort of raw political calculation that Mr. Pataki has, and the other is that his own decision to minimize the potential impact on key employee groups has compromised his hopes of getting the union leaders to all sacrifice for the common good.

Took Heat Off Some

“Given the way that Bloomberg has handled this, where he’s basically exempted certain groups from layoffs, where’s their compulsion to do anything?” said Al Viani, who was District Council 37’s chief negotiator during the 1970’s fiscal crisis.

A valid case can be made that among the labor leaders with the most to lose if massive layoffs are imposed, there has been a vast drop-off in talent: the heads of DC 37 and Teamsters Local 237, Lillian Roberts and Carl Haynes, are nowhere near as dynamic as their counterparts of that era, Victor Gotbaum and Barry Feinstein.

But those who lament that today’s municipal union leaders lack the statesmanship of their predecessors are remembering the fiscal crisis through a gauzy lens, as if it were the final frame of “Casablanca” where Humphrey Bogart and Claude Rains marched off into the desert with “La Marseillaise” accompanying them.

A check of this newspaper’s files shows that in the early days of the fiscal crisis, it wasn’t simply a case of convincing the less-affected unions to sacrifice to help those facing the most wrenching hits. More senior employees in the same job were sometimes reluctant to give up anything to help their newer colleagues.

Left Rookies Hanging

In March 1975, the Transit Patrolmen’s Benevolent Association initially voted against a city proposal to have its members work an additional five tours over a 15-month period to avert the layoff of 80 rookie transit cops.

A month later, UFT President Al Shanker – today remembered as one of the labor “giants” who put together the deal to have the pension funds rescue the city from bankruptcy, declared that he would resist any attempt by the city to gain productivity by increasing the hours worked by Teachers, and demanded a 21-percent raise. At just about the same time, the Patrolmen’s Benevolent Association was undertaking its latest attempt to shatter the bargaining relationship that existed with Sanitation men, prompting the latter union’s president, John DeLury, to brand the PBA a “crybaby union that has ridden the backs of the Sanmen for years.”

A Caustic Response

In mid-May, Mayor Abe Beame said that the prospect of getting little or no aid from the state and Federal governments had forced him to nearly quadruple the number of layoffs called for under his budget, from 13,782 to 51,768. When the Mayor suggested many of the layoffs could be averted if the unions agreed to have their members work one less day and be paid accordingly, Mr. Gotbaum – the man justifiably remembered as the union leader whose cooperation was the most important in making the deal that would bail out the city – responded caustically, “The Mayor has a right to discuss a four-day week. Let him discuss it as a monologue.”

On June 30, 1975, more than 15,000 employees were laid off; a day later, 26 fire companies were disbanded, including several that later reopened but are on Mr. Bloomberg’s chopping block now. But toward the end of July, Mr. Gotbaum, Mr. Shanker and PBA President Ken McFeeley were still balking at Mr. Beame’s demand for a wage freeze, with Mr. Shanker and Mr. McFeeley saying they would rather let the city go bankrupt.

PBA, UFA Holdouts

By the end of the month, the key civilian unions agreed to defer wage increases that were due them, but the PBA and the Uniformed Firefighters’ Association balked. Newly elected UFA President Mickey Maye took exception to some comments Fire Commissioner John O’Hagan made about his members during the talks and threatened to “knock his head off his shoulders” if he persisted.

In September, Mr. Shanker led a one-week strike by the UFT before agreeing to settle his contract. By October he was accusing Mr. Beame of being “in bed with the bankers,” and Mr. Feinstein was calling for a general strike. But by then the layoff numbers had mounted to nearly 45,000, although thousands of employees were called back to work using Federal funds under the Comprehensive Employment and Training Act. When President Ford refused to approve Federal loan guarantees, prompting the immortal Daily News headline, “Ford to City: Drop Dead,” the unions stepped into the breach, pledging to use pension fund money to buy $2.5 billion worth of city bonds.

“It wasn’t so easy to get these unions to work together, even under compulsion and the threat of action by the [Emergency] Financial Control Board,” Mr. Viani recalled last week, “Our approach was, ‘Is [the financial crisis] real?’ When we discovered the magnitude of it, we determined that we had to come up to the plate along with everybody else. We were worried about bankruptcy or that all the collective bargaining laws would be suspended by the Legislature.

“Even so,” he continued, “the cops never did agree to the [wage] deferral and they took massive layoffs. Finally people fell into line because there wasn’t much choice – the fact is that the unions had to comply with the provisions of the [Emergency Financial Control] Act and the Control Board had to approve any pay raise.”

‘Wall Street Wants Blood’

Mr. Viani shares the skepticism of several current labor leaders about the Mayor’s professed reasons for imposing layoffs. “Wall Street wants body counts – they’re rather crude about it when it comes to determining whether the city is doing anything to save real dollars long-term,” he said.

But one current civilian union insisted on anonymity, said the similarities between then and now regarding key union leaders not being inclined to sacrifice unless forced to should not give the current crop immunity to continue in stance.

“If we just stand pat, I don’t know what that does for us,” this official said. “I think the unions should determine what they’re trying to accomplish and whether they’re going to deal with Bloomberg. You need to have a partner when and if the economy turns around. People haven’t been listening to each other; they don’t want to hear. The Mayor capsulized the problem with the uniformed forces: they don’t see themselves as part of this.”

But, this official continued, Ms. Weingarten may be right in her assessment that the Mayor’s background as a CEO who did not deal with a unionized work force has contributed to his frustration with the MLC. From a businessman’s standpoint, he said, “the unions represent a liability as opposed to a potential creditor.” That may explain why Mr. Bloomberg rejected the MLC offer to stretch out city pension payments to cover half of his $600 million “contribution” just a year after he agreed to a similar savings involving the amortizing of liability for additional cost-of-living pension payments over 10 years instead of five.

“Debt service and pension costs are continuing to increase, and revenues don’t look like they’re going to keep pace with that,” the union official said. “The problem is, while he’s talking about concessions, he’s not talking about giving the unions anything in exchange that could help their members keep up with inflation, and they need that.”

He questioned Ms. Weingarten’s assertion that the Mayor wanted mass layoffs to establish his toughness, noting that in running the financial information corporation that bears his name, Mr. Bloomberg had always looked to improve efficiency rather than resorting to the common business tactic of laying off employees.

‘The Layoffs Bother Him’

“I think these layoffs are really bothering him,” the union official said. “I think it bothers him that the unions didn’t step up to the plate.”

But with battles still to be fought in the City Council and in Albany, the level of desperation needed to propel the unions into accommodating the Mayor doesn’t yet exist. It may never reach that point for people like Mr. Seabrook at COBA and PBA President Pat Lynch, and they certainly aren’t going to do anything that would subject them to internal criticism until after they get past re-election battles later this spring.

For that matter Ms. Roberts at DC 37, whose members face the biggest cut under the Mayor’s doomsday plan, has held firm to her insistence that she won’t sacrifice benefits to protect jobs – and her election battle isn’t until November.

And so, our anonymous labor official said, the urgency that could produce a deal is not there among the key labor leaders, because “the cruise missile hasn’t hit yet and blown out your next-door neighbor’s windows.