Mayor Bill de Blasio's proposed budget lowballs the cost of settling more than 150 expired labor contracts and relies on a risky assumption that Albany will approve a $530 million tax for universal prekindergarten and after-school programs, the city comptroller's office said Wednesday..
Comptroller Scott Stringer said that the $73.7 billion budget's projection of annual growth for salaries and wages at 1 percent is the budget's "Achilles' heel" and the labor cost issue is the "big elephant in the room."
"It does not provide or adequately anticipate the resolution of some 150 outstanding labor contracts," Stringer said.
The budget, unveiled Feb. 12, also assumes the state will green-light de Blasio's plan to raise the tax rate for incomes over $500,000 for the pre-K and after-school plan. The idea is opposed by Republican lawmakers and Gov. Andrew M. Cuomo.
"I support the mayor's call for universal pre-K, and as comptroller I appreciate that he's also proposed a way to pay for it," Stringer said. "But if Albany fails to deliver the taxing authority, the state will need to find a dedicated source of revenue to pay for this important priority."
A comptroller's office official who spoke on condition of not being identified elaborated to point to the budget's inclusion of pre-K tax revenue as a risky assumption, along with the labor contracts cost estimate.
Stringer also urged the administration to settle the labor deals by the end of the current fiscal year, June 30, to make sure next year's budget accounts for the real costs.
The unions, representing most of the city's 300,000-strong workforce, have been without contracts for years and are clamoring for back pay, which the Bloomberg administration said last year could cost the city $7.8 billion if awarded.
There is about $1.3 billion in reserves de Blasio's budget that can be used for labor contracts, Stringer said, though the mayor hasn't explicitly said so. Stringer did not provide an alternative estimate for the likely costs, but he cited the retroactive pay demands and how long ago many contracts expired as question marks.
In a statement, mayoral spokesman Phil Walzak defended the administration's proposal as a "progressive, fiscally responsible budget" and the approach "sound."
"All other considerations are hypothetical at this point," Walzak said.
He said it would be "irresponsible" not to have put the pre-K tax revenue into the budget.