May 27, 2016

Razzle Dazzle

Bloomberg’s Parting ‘Gifts’ Limit PBA and De Blasio


Michael Friang
TORN BETWEEN TWO MAYORS: Patrolmen’s Benevolent Association President Pat Lynch came to City Hall seeking a home-rule message from the City Council for an upgraded disability bill for more-recent hires, saying, ‘It’s a right-and-wrong issue, not a dollars-and-cents issue.’ His task was complicated, however, by his inability to get a commitment on the bill from Mayor de Blasio (top right) due to an ongoing contract dispute. That conflict is partly the result of ex-Mayor Michael Bloomberg’s decision to cut off meaningful contract talks for his third term, and he is also suspected of playing a key role in then-Gov. David Paterson’s decision to veto a bill that would have continued the kind of disability coverage for newer members that the PBA is now seeking.

The Patrolmen’s Benevolent Association brought about 100 of its members to City Hall last week, handing out leaflets and post-card-sized pitches at both the east and west gates to passers-by while looking to buttonhole City Council Members about the case for upgraded disability coverage for newer members.

The need to get a home-rule message through the Council within the next two weeks in order to trigger action in Albany on a disability measure for officers hired after 2009 was what brought them there, but the post-card-sized flyers listed “competitive pay” first in the appeal to the public.

And while Mayor de Blasio is the current obstacle to those objectives, a case could be made that both problems are legacies of Michael Bloomberg’s tenure and his obsessive desire to get employee costs under control, particularly where cops and firefighters were concerned.

The Man Behind Paterson’s Veto?

The wholly inadequate disability pension for members of both those groups who were hired during the past seven years is one of the consequences of then-Gov. David Paterson’s veto in June 2009 of a Tier 2 extender bill that had routinely been approved in Albany going back to the early 1980s and continued a practice that took root in the summer of 1976, when city cops and firefighters were the only municipal workers not moved from Tier 2 of the pension system to the less-costly Tier 3 when it was adopted by the State Legislature and then signed into law by Gov. Hugh Carey.

Mr. Bloomberg, who at the time of Mr. Paterson’s veto had launched his first unsuccessful bid to eliminate or limit the Variable Supplements Fund payments for retired cops and firefighters, never publicly campaigned for a veto of the Tier 2 extender, which had the effect of moving those hired from Jan. 1, 2010 forward into Tier 3 and diminishing their pension benefits in several key respects, while also making them work two years longer in order to qualify for a full pension.

But beyond any suspicions the unions entertained about his role in the then-Governor’s action, there are both state and city officials who are convinced Mr. Bloomberg at the very least influenced it, even if they’re relying largely on circumstantial evidence.

One of the more-stunning aspects of Mr. Paterson’s veto was that he gave no indication to Democrats in the Assembly and State Senate, both of which they controlled at the time, that he intended to disrupt what had become a routine re-authorization of Tier 2 status for cops and firefighters.

Normally the uniformed unions would have marshaled their lobbying forces, called in old chits and got the veto overridden, but there was a complicating factor: the brief defection of two Democratic Senators—the odious Pedro Espada and Hiram Monserrate—to the Republican conference, followed by Mr. Monserrate’s hasty return to his party’s caucus. Both those moves had the effect of creating gridlock at the key point in the annual legislative process, stymieing action on most bills that were awaiting passage. And the Governor’s efforts to return the Democrats to a majority in the Senate—where he had served for an extended period as Minority Leader until he was elected Lieutenant Governor in 2006 on a ticket with Eliot Spitzer, who resigned because of a hooker scandal in early 2008—made his old colleagues particularly reluctant to embarrass him with an override at a time when he was hoping to build momentum as he prepared to seek a full term as Governor the following year.

Prelude to State Trade-Off

The veto came at a time when Mr. Paterson was negotiating with the two-largest state-employee unions to implement a less-costly pension system for their future members, and three days after he acted, he persuaded the Civil Service Employees Association and the Public Employees Federation to accept the less-generous Tier 5 (by that time most state and city employees coming into the job were enrolled in Tier 4) in return for his guarantee that he would not lay off more than 7,000 workers to cope with a state budget deficit.

Mr. Bloomberg instantly sought to persuade city unions to accept a version of Tier 5, and just as quickly they brushed off his overture. What was interesting, though, was what one of his spokesmen said about the veto of the Tier 2 extender, calling it “a bold, gutsy step that put Tier 5 at the forefront of the conversation.”

There was no reason for the municipal unions to embrace that cheaper pension system, although several months la­ter then-United Federation of Teachers President Randi Weingarten negotiated a variation of it that was kinder to her future members than the state version. But one Albany official who was involved in the discussions on pension legislation back then, asked to what degree he thought Mr. Bloomberg had persuaded Mr. Paterson to drop the first shoe with the extender veto, said last week, “I think there was an influence, yes.”

‘Did Nothing for State’

Speaking conditioned on anonymity, he continued, “I see no other reason why Pat­erson would have done some­thing like that. It did nothing for the state. Everyone was shocked when he [vetoed the extender].” (Mr. Paterson him­self said last year that he regretted that the disability benefit provided under Tier 2 was eliminated for future workers as a result of the veto.)

Initially, there wasn’t much urgency to gain a modification for the PBA and the Uniformed Firefighters Association. While they were both unhappy about Tier 3 forcing new members to work an additional two years to qualify for a full pension—and for three years beyond that in order to qualify for cost-of-living adjustments to their retirement allowances—it seemed obvious that they wouldn’t be able to regain the traditional 20-year pension right for newer members. There was too much concern about rising pension costs due to employees living longer that had been an issue even before the 2008 national recession severely strained the finances of both the city and state.

The biggest loss that they could realistically hope to rescind pertained to disability benefits. Tier 3 didn’t have any of the “presumptions” that were included in Tier 2 for cops and firefighters, under which if they were forced to retire due to disabling illnesses related to hearts or lungs, it was presumed that these conditions were the result of their jobs, entitling them to tax-free disability pensions equal to three-quarters of final average salary.

No Real Benefit

An arguably greater loss was that Tier 3 didn’t have a meaningful disability provision: those under it who suffered injuries or illnesses that left them unable to return to work received a standard pension equal to half of final average salary, and those pensions were subject to a Social Security offset that would shave their allowances further based on disability pay they were receiving from the Federal Government.

Cops traditionally have significantly lower job-related disability rates than firefighters, with one official last week estimating that no more than 20 percent of them qualified while close to 70 percent of firefighters in recent years have been earning disability pensions due to the after-effects of their labors at the toxic World Trade Center site in the wake of 9/11. This would have placed greater pressure on the UFA to rectify the situation, except that from 2010 through most of 2012, the Fire Department was doing no hiring of Firefighters because of a job-discrimination suit that was playing out in Federal District Court in Brooklyn.

The hiring that’s occurred since that case was settled served as a prod for the UFA as new members were saddled with the inferior disability benefit. And PBA President Pat Lynch noted last week at the west gate of City Hall that he now has 11,000 members—nearly half his 24,000-member union—who are under Tier 3, with its inadequate disability provisions.

Adding Insult to Injury

He lamented that unlike the Tier 2 disability provision, which permits those who are physically able to perform jobs that are less taxing than that of a police officer to take other employment outside city service with no reduction in their pensions, that Tier 3 recipients who find other work could wind up having their allowances wiped out if their income exceeded a certain level. The message implicit in that, he told reporters, is, “You served us, you were injured but now you’re fired.”

The most-extreme illustration of the dilemma created by the inferior pension is Rosa Rod­riguez, who was severely injured while responding to an April 2014 fire in a Coney Island housing development that killed her partner, Dennis Guerra. Though she has expressed a desire to return to full duty, her injuries have made that a questionable proposition, although she remains on the police force with light-duty status.

“Her lungs and voice-box are scarred,” Mr. Lynch said. “She has four children, she lives in Howard Beach, and now they’re asking her to live on $30,000 a year.”

The PBA’s efforts to gain an improved disability benefit for Officer Rodriguez and others with similar plights are complicated by its fitful dealings with the de Blasio administration on wage contracts. Last year, the UFA was able to secure a pledge from the city to support a bill that would give post-2009 Firefighter hires the tax-free, 75-percent of final-average-salary benefit. Originally it was expected that in order to even out the city’s costs, those Firefighters would have to contribute 6 percent of their salaries to the Fire Pension Fund, compared to 3 percent for those who joined the department in 2009 or earlier, but Assemblyman Peter Abbate said last week that the cost has been cut slightly, to 5 percent of salary.

PBA Took Different Route

No similar deal on legislative backing by the city has been reached by the PBA, however. Mr. Lynch balked at accepting the wage terms that became standard for the UFA and other uniformed unions: raises totaling 11 percent over a seven-year period. His fire-union counterpart, Steve Cassidy, when he reached his deal nine months ago, expressed disdain for the pay raises, which he no­ted didn’t figure to keep pace with inflation, but said the value of the improved disability benefit and a city agreement to guarantee a portion of engine-company staffing that Mr. Bloomberg discontinued five years ago were substantial-enough gains to live with the meager raises.

Mr. Lynch has been unwilling to make similar tradeoffs, and went into arbitration in an attempt to do better than the other uniformed unions. He was unsuccessful, with an arbitrator last November awarding the PBA 1-percent raises in each of two years—the longest the contract could be without both sides agreeing to extend it—and no commitment by the city to support improved disability coverage.

The sub-inflation pay hikes are another byproduct of Mr. Bloomberg’s determination to play hardball with the unions once the city’s economic condition worsened as the national economy tanked. In this case, however, he did so in the middle of a bargaining round. Most city unions, including the PBA and the UFA, by the summer of 2008 had negotiated two 4-percent raises for their rank and files. A conspicuous exception was the UFT, which was working under a contract that didn’t expire until Nov. 1, 2009.

Bloomberg’s Changed Tune

Rather than follow through on the pattern—notwithstanding his insistence in previous arbitrations with the PBA that requiring all unions to abide by the terms established early on was the key to maintaining bargaining stability—Mr. Bloomberg insisted he could not give the UFT and unions representing school supervisors and nurses those raises; in fact couldn’t offer them anything at all. At one point he tried to sell Mike Mulgrew, Ms. Weingarten’s successor at the UFT once she left it to devote all her energies to running the American Federation of Teachers, that he was offering him something of equal value by not laying off any Teachers to keep the budget manageable. Mr. Mulgrew wasn’t buying, and a stalemate was born.

Entering his third term, Mr. Bloomberg upped the ante: any unions that wanted raises would have to find ways to pay for them. And those unions which succeeded in doing that would do so without the benefit of the retroactivity attached to overdue contracts that had been even more prevalent than firm contract patterns over the previous 45 years of city bargaining.

These were the moves of a man who in his private business had not had to deal with unions and could act on whims and what he considered to be the market price for talent. When Mr. Lynch had pointed to higher salaries for cops in neighboring departments whose jobs weren’t as demanding and sought a “market” rate, however, Mr. Bloomberg always balked, citing the importance of patterns being honored and then, in his last term, insisting the money simply wasn’t there.

Spent Labor Reserve

The unions collectively made a decision to wait for a new Mayor to step in, expecting it would be a Democrat and someone not as hostile to labor as Mr. Bloomberg had become. But the lack of any new contracts being reached during his final four years in office enabled him to spend the money available in the budget on other things, with a minimal amount left in the city’s labor reserve even as its finances grew steadily stronger.

When he left office, Mr. Bloomberg pointed to a surplus that existed for the last six months of fiscal 2014, coinciding with the advent of the new administration, and boasted that he had left his successor with a sound economic base from which to begin. This was an assumption built in sand, however: it was predicated on the departing Mayor’s stance that any new raises had to be paid for by union givebacks or productivity initiatives.

From a practical standpoint, this was a lie of Trump-like proportions. Even if Bill de Blasio had been a man after his own flinty heart, the UFT was entitled to a form of arbitration that, while nonbinding, had in the past strongly influenced the settlements that were ultimately negotiated. It was also widely conceded among arbitrators that it would be hard to deny the UFT retroactivity for whatever raises it negotiated, based on close to five decades of past practice.

The dilemma this posed for the new Mayor was daunting: he would have to account for the 50-month period in which the UFT got no raises from Mr. Bloomberg while other city workers were, while under a wage freeze, at least enjoying the fruits of those two 4-percent hikes Mr. Bloomberg had given out while the city seemed able to afford them. The cost of the retroactive money that UFT members would be eligible for if the established pattern was honored was generally estimated in the neighborhood of $4 billion or higher; in fact, during the mayoral campaign, Mr. de Blasio’s Republican opponent, Joe Lhota, had estimated it might go as high as $10 billion.

Aides Threaded Needle

Taking on that sort of obligation at the start of his administration would have severely hampered Mr. de Blasio’s ability to maintain a balanced budget, never mind expand spending in areas like an ambitious pre-kindergarten initiative. He was fortunate to have chosen as his chief negotiator and Budget Director two resourceful government veterans, Bob Linn and Dean Fuleihan, and a package was put together that gave the UFT its two four-percent raises and full retroactivity.

That was the good news for Mr. Mulgrew and his members. The downside was that, in addition to having to accept the retroactive money on a long installment plan in which the bulk of the payouts would not be implemented until the final three years of this decade, the union would have to take raises totaling just 10 percent for the seven-year period that would follow the make-up for the two “lost” years.

The principles that were upheld under the deal concerning bargaining patterns and retroactivity were vital, and the four-percent raises solid enough to convince Mr. Mulgrew it was worth it to sign on to the longest deal in municipal bargaining history, with a big chunk of it covering a period in which raises were unlikely to keep up with the cost of living. Part of the genius of the plan for ladling out the retroactive money was that those lump-sum installments were hearty enough to offset the less-than-stellar raises on the back end of the deal.

Less-Palatable to Others

This worked for Mr. Mulgrew, but the framework of those final seven years lacked any similar incentives for the rest of the workforce. Many unions gritted their teeth and made what they could of openings in areas beyond wages, as exemplified by Mr. Cassidy and the UFA. Mr. Lynch has been unwilling to join the crowd, however, and six months after the arbitration award that so angered him, he said last week, “We’ve had no realistic conversations with the city” that could produce a negotiated contract anytime in the near future. The most-likely scenario is another trip to arbitration, but the PBA would face the same disadvantage of a strong­ly-fortified bargaining pattern that frustrated it last year if it took that route.

And meantime, while the UFA disability bill has a good shot of being approved by the Legislature in the next couple of weeks, the PBA can’t even be certain of getting a home-rule message for its bill from the Council that would be a pre-condition for it making it through the State Assembly. (Governor Cuomo and the State Senate majority, neither of whom would exactly flinch at acting against Mr. de Blasio’s interests, have indicated their willingness to approve an improved disability benefit for city cops if given the chance.)

Daneek Miller, the Chairman of the City Council’s Civil Service and Labor Committee, spoke briefly with cops outside the City Hall gate about the disability upgrade. Asked a couple of hours later about the chan­ces of gaining a home-rule message, he said, “I think we’re going to really have to pay attention to this issue. At the end of the conversation, we’re going to have to have some results. We want to make sure [disabled cops] have the same standard of living as they did” prior to their afflictions.

Timing a Problem

But when pressed on wheth­er this could happen in time for the measure to move before June 16, when the Legislature is expected to adjourn for the year, Mr. Miller replied, “It’ll be very difficult, especially considering we’re dealing with two bodies of government, both here and in Albany.”

His counterpart in the State Assembly, Mr. Abbate, who heads the Committee on Government Employees, was emphatic about whether the PBA bill could still move this session. “It will get done with a [Council] home-rule message,” he said in a phone interview. “Without a home-rule message, no.”

Which leaves Mr. Lynch potentially stymied on two fronts with Mr. de Blasio, in both instances because of actions taken or most likely influenced by Mr. Bloomberg.

It brings to mind that eulogy which Shakespeare had Mark Antony give on behalf of the Bloomberg of his day, Julius Caesar. The one about the bad stuff that men do living after them.