Backdated Pay Raise For Unions Continue With New Deal

By Jonathan Zhou, Epoch Times

NEW YORK—The de Blasio administration settled contracts with two more labor unions on Friday, with backdated pay raises and wage gains tilted towards the tail of the budget, similar to the $9 billion deal with the United Federation of Teachers that was ratified in June. 

The city’s deal with SEIU Local 300 and the United Probation Officers Association, which represent forensic experts and probation officers respectively, brings up the fraction of city employees who have renewed their contracts to 60 percent. 

“Today’s tentative agreements with Local 300 and UPOA mean contracts for workers who have been working without them for years—providing raises that are consistent with the established pattern,” de Blasio said in a statement. 

When de Blasio came into office, many of the city’s largest unions were working with expired contracts, having failed to reach an agreement with the Bloomberg administration, which had accused the unions of holding out for a better deal with the next mayor. 

The 7-year and 4-month contracts begin retroactively to 2009 and 2011 respectively, starting off from when the unions’ previous contracts expired. The gross cost of the deal, which affects 1,466 workers, is $32.5 million. 

Local 300 members will receive a 1 percent, 1.5 percent, 2.5 percent, and 3 percent raises in 2014, 2015, 2016, and 2017 respectively. UPOA members can expect raises of 1.5 percent, 2.5 percent, and 3 percent in 2014, 2015, and 2016. Those increases are compounded with retroactive raises of 1 percent per year from 2012–13 for Local 300, and from 2011–13 for UPOA. 

As with previous agreements, the de Blasio administration stressed that no new funding would be required beyond the projected budget for this year, which is required by law to be balanced. 

This is done with a combination of dipping into the surpluses from the Bloomberg years and $3.4 billion in projected savings from healthcare reform. 

The nature of the healthcare savings is opaque, but that doesn’t matter, says de Blasio, because the agreement is enforceable by arbitration, and thus guaranteed to happen. 

Source of Funds

When pressed about where the $3.4 billion would come from, Robert Linn, the city’s labor relations director, told Capital New York that the rising healthcare cost curve could be bent by, among other things, having employees get their medical screening tests centrally and switch to mail-order prescription drug plans instead of going to local pharmacies. 

Moreover, a slowdown in the rise of healthcare costs means that, if the trend continues, the state would spend $1.3 billion less in healthcare by 2018 than projected in the February budget plan, an amount that city officials told the Gotham Gazette would count towards the $3.4 billion. 

In the UFT deal, the billions in backdated raises were spread out in future budgets up to 2020, which has draw criticism that the budget hasn’t actually been balanced. 

“Isn’t the city just borrowing from the teachers rather than from more sophisticated bondholders?” Nicole Gelinas wrote in the New York Post. 

The mayor has also been challenged by the comptroller, Scott Stringer, and had to make a last-minute adjustment to include $725 million of retroactive pay raises in this year’s budget, lest the city violates standard accounting principles.