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LifestyleColumnistsDan Janison

De Blasio likely to keep labor strategy opaque in budget

New York City Mayor Bill de Blasio speaks

New York City Mayor Bill de Blasio speaks at the National Action Network's Annual King Day Public Policy Forum in Manhattan. (Jan. 20, 2014) Photo Credit: Charles Eckert

New York City Mayor Bill de Blasio Tuesday described the problem of backlogged municipal labor contracts as belonging to "the great unknown."

And plenty of mystery is bound to remain -- even after de Blasio presents his first $70-billion-plus annual budget proposal next week.

"At this point we don't know where the labor negotiations will lead us," he said in a City Hall news conference when questioned about the projected cost of his pre-K expansion plans. "And we don't know even the timeline on which they'll be settled."

But some things are fairly certain -- in broad theme if not in detail, said seasoned budget wonks who didn't want to be quoted by name.

The issue is clear. Mayor Michael Bloomberg left behind some 150 open labor contracts. Under state law, the terms of expired contracts continue until replaced.

Falling more than four years behind in the contract-negotiation cycle is indeed "virgin territory," said a former city budget official. Unions refused demands to surrender their famous premium-free health care coverage, and Bloomberg, barred from seeking re-election, evidently lost interest in granting raises.

Traditionally, the city has kept a labor "reserve" for future contracts. Before disbanding, the Bloomberg administration budgeted for first- and second-year raises going forward of 1.25 percent each Hundreds of millions of dollars is believed available for future wage hikes -- though none for retroactive pay.

A onetime reserve that might have been used for wage hikes was disbursed instead for other purposes amid the economic crisis five years ago. Now, since full retroactive increases across the sprawling municipal workforce would cost an estimated $8 billion, de Blasio has deemed it unaffordable.

So it appears likely that any grants of retroactive pay would have be way more modest and take the form of lump sums, or bonuses. "For one thing, it doesn't add to pension costs," said a city analyst. "And also, it doesn't add to the base for future years."

In negotiating with unions, officials try to keep vague the amount of money available for a contract. "There are places the budget office can sock away money, in agency budgets," said the former city official.

One veteran of government and municipal labor expresses doubt that unions "have a great hand to play."

"None of the unions really supported de Blasio in the [Democratic] primary," the source said, adding that Robert Linn -- the labor director brought back by de Blasio who served in the Koch administration -- "was known as a hard man to bargain with."

Speaking at City Hall after introducing Richard Buery as his fourth and last deputy-mayor appointment, de Blasio said of the union talks: "We've said we want to try to get an aggressive start on them, and we hope to achieve some real cost-savings in the bargain."

"But that is the great unknown, and we're going to be talking a lot about this in the coming days . . . This is an unprecedented dynamic, and we're going to have a huge fiscal challenge ahead, and one that should not have been handed to us . . . by the previous administration."

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