De Blasio budget doesn't set price of labor deals

New York City Mayor Bill de Blasio delivers

New York City Mayor Bill de Blasio delivers remarks to clergy during a breakfast in support of his universal pre-K plan at Bethany Baptist Church on Feb. 11, 2014. Photo Credit: Charles Eckert

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Mayor Bill de Blasio's strategy for resolving more than 150 open labor contracts was left opaque Wednesday in his first budget proposal as he described meeting that challenge as "the great unknown."

He presented a sobering fiscal outlook, saying the budget for fiscal year 2015, which begins July 1, is balanced only thanks to leftover resources from previous years. He projected a $1.1 billion deficit for fiscal year 2016.

"We enter this process with a clear vision of the fiscal challenges ahead, including the structural deficits we face each year," he said in unveiling his preliminary financial plan at City Hall.

De Blasio's budget would replenish the retiree health benefits trust fund with $1 billion and increase the general reserve fund from $300 million to $600 million in the coming years. But he sidestepped a question about whether those funds would go toward potential raises or retroactive pay for the city's 300,000 unionized workers and instead accused predecessor Michael Bloomberg of leaving the city in a bind.

"It's money that should have been there already as a matter of fiscal prudence," he said. "The previous administration was given an artificially high level of credit for management . . . You cannot ignore open labor contracts for years on end."

A Bloomberg spokesman declined to comment.

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The introduction of the $73.7 billion blueprint marks the start of a monthslong bargaining process among the mayor, the City Council, lobbyists, labor unions and other interests.

De Blasio and his budget director, Dean Fuleihan, would not detail how the city will answer the unions' demands for salary hikes and about $8 billion in back-pay requests.

"We don't get into the specific numbers because the demands of the negotiation process require discretion," de Blasio said, adding, "We do know we're going to need cost savings and efficiencies to get through this."

The head of a coalition of unions warned that difficult negotiations could be ahead.

"Though it is important that surplus money is being set aside," said Harry Nespoli, head of Municipal Labor Committee, "the actual amount does not reflect any agreement with the city's unions on what is necessary to resolve the more than 150 open labor contracts."

Fuleihan said the plan does not include any new broad-based cuts. It did include an extra $35 million in the current year's budget to cover the high cost of snow removal from an onslaught of storms.

De Blasio said no tax increases are planned beyond the proposed hike on those earning more than $500,000 to fund his universal prekindergarten and after-school initiative.

His budget includes an additional $530 million revenue for the estimated cost of pre-K programs -- even though the city's prospects of winning the state legislative approval necessary to move forward are uncertain.

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De Blasio also restored $59 million to fund 20 fire companies previously cut in the fiscal year 2015 budget.

Maria Doulis, director of city studies at the nonpartisan Citizens Budget Commission, called the $1 billion restoration to the health care fund "very prudent and forward looking."

Council member Mark Weprin (D-Oakland Gardens) stressed the city's challenges.

"To say there's extra money floating around is a misstatement, because built into this budget is the fact that we have to pay our workers," he said. "You can't disrespect the workers and let them work without a contract."

With AP

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