New York City Has Agreed To A Contract With No Givebacks - Very Interesting!

Shockingly the Bloomberg administration has agreed to a tentative contract with it's largest union (DC37) that apparently does not contain union givebacks. This development is of extreme importance because it "sets the pattern" for the next contract for the teachers. For people unfamiliar with municipal bargaining in New York City. Once the city agrees with one of the major unions (usually DC37, the largest and weakest) on a contract. All other unions are subject to the parameters of that contract. For teachers to get more than the DC37 pattern, the teachers usually have to give up days and work extra time during the school day. Therefore, lets see what the general outline is of the DC37 contract.

The DC37 contract gives the union a 3.15% raise for 13 months (July 2005 to August 2006), a 2.0% raise for the next 6 months (August 2006 to February 2007) and a 4.0% raise for the last 13 months (February 2007 to March 2008). By compounding the interest it comes out to a 10% raise for a 32 month contract. The extra 2 months were added so that the city could give the union's welfare fund a much-needed cash infusion of 23 million dollars. Interestingly, the union won a very important takeback, the right to live in the New York State suburbs, as long as they pay the New York City Income Tax. This takeback (given up in 1987) is based upon the reality that the average DC37 employee (annual salary of $28,000) cannot afford to live in the big apple.

Why did the city give such a relatively (for them) generous contract to a union that they have used previously to impose a "pattern" on the rest of the unions? Simple, its politics, and the city's ever-growing budget surplus. First, Lillian Roberts is in serious trouble as head of DC37. She is outvoted on the executive board and has made enemies of the other unioms with her approval of a vastly inferior contract that was short on money and long on givebacks, which of course established the "pattern" for all of the other unions. Second, the city's ever growing budget surplus, presently 5 billion dollars! The tentative contract for DC37 was payback by Mayor Bloomberg to Lillian Roberts for saving the city millions of dollars in the previous contract when the city was claiming a budget deficit (it turned out the city had a budget surplus of 1.3 billion dollars). Further, Lillian Roberts is up for a tough reelection campaign later this year and the Mayor is supporting her reelection and this contract will help her immensly. Finally, by comng to a contract with DC37, the city has set the "pattern" before real negotiations with the tougher unions (police & teachers) get going.

What will this contract mean to the New York City teachers? First, the New York City teachers contract expires on October 7, 2007 and the teachers will receive the same 3.15% raise starting on October 7, 2006 that DC37 will get in their first year of their contract. Logically, the city is willing to give a 4% raise to the teachers for the first year (October 2007 to October 2008). This is the "pattern" set by the DC37 contract. Any increase in that number will be associated with givebacks, a situation that is not likely to be receptive to the teachers. Therefore, the 4% value seems to be a reasonable value for the first year.

The problem arises with the second and third years of the contract. Since DC37's contract will be ending and unless other major unions have settled a long-term contract (highly unlikely), the final two years will be based upon the city's financial condition, Randi Weingarten's willingness as leader of the Municipal Labor Council (MLC) to agree to give the city a less generous Tier V pension for the newbies, and/or paying a percentage of the salary (1 - 2%) for health benefits. Obviously, if Randi caves here, all the municipal unions will be getting significant raises (up to 5% if both are implemented) by giving back on the pension and health issues. However, if the MLC refuses to giveback on the pension & health issues the question is how much will the city offer? This is difficult to say. First, it depends on the city budget surplus/deficit. Second, what other givebacks the city wants from the teachers? A sixth period? More time during the day? Less time off? Required coverages? Randi has already said she will no longer exchange time for money and has committed to a three-year, 4 -5% per year contract to try to catch up to the suburbs. Therefore, unless the city is willing to pay the teachers close to what Randi wants without givebacks, the best the teachers can probably do is a 2-3% raise without the givebacks previously mentioned and that's assuming the city has not fallen into a budget deficit.

Personally, I expect one of two scenarios to occur. First, and the most likely scenario, the MLC caves (Randi caves???) and allows the city to start a Tier V pension and/or a 1-2% employee contribution to pay for health benefits, allowing the city to give the unions a 3 - 5% raise, based upon the status of the city budget surplus/deficit. The second scenario is that the MLC does not agree to the pension and health givebacks and the city may just decide (quite likely) to fake negotiating until either Bloomberg's term expires or the State finds the city bargaining in bad faith. In which case look for the city to offer a 2-3% raise with some very minor givebacks to save face.

In conclusion, it would appear that without the city receiving major givebacks in the pension and health area don't look for a contract anytime soon.